Cisco Systems, Inc.

Decent Essays
Company Overview Cisco Systems, Inc. was founded in 1984 and is headquartered in San Jose, California. According to their 2014 Form 10-K Annual Report, Cisco “designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry.” Their main objective is help their customers improve growth and productivity while reducing costs and risks by connecting people, processes, data, and products through strategic business network platforms. Cisco Systems, Inc. has assembled their products into eight categories: Switching; Next-Generation Network (NGN) Routing; Service Provider Video; Collaboration; Data Center; Wireless; Security; and Other Products. They…show more content…
Suppliers depend on companies in the information technology industry, because IT companies are their primary customers. Due to the heavy competition among suppliers in the IT industriy, their bargaining power is low. Employees do not have any supplier power since their abilities are commonly available. Companies can easily lay-off and replace their work force. Sub-contractors also do not have much bargain power due to heavy competition among themselves. Buyer Power: Moderate. Buyers consist mainly of large entities such as mobile service providers, large companies, and governments. These entities purchase products and services in large volumes, and equipment costs form a significant part of their business expenses. Therefore, they can participate in negotiating a lower price, or move on to another competitor’s products and services. Although there are many products and services in the IT industry, there are high switching costs if a buyer decides to switch their IT networks. An entity would need to redesign their entire IT architecture, as these technologies are necessary to the success of businesses. Due to the many different product and service offerings, but high costs of switching, the buyer’s bargaining power is moderate. Threat of Substitutes: Low. There are not many substitutes for the products developed by companies in the information technology
Get Access