DEVELOPING MARKETING

STRATEGIES AND PLANS

Case study on

MALAYSIAN GRADUATE SCHOOL OF ENTERPERENEURSHIP & BUSINESS

Presented by:AZHAR NAIMA MUTLAK p14d487fSHIVAN SALEEM KHALID p15d082fWIJDAN IBRAHIM ABDULHAMEED p15d088fAWS SALAH ABDULLAH p15d085f

submitted to :Dr. Bidin Chee Bin Kifli

Introduction: CISCO SYSTEMS INC. IS THE WORLDWIDE LEADER in networking for the Internet. The company was founded in 1984 by two computer scientists from Stanford University seeking an easier way to connect different types of computer systemsCisco Systems shipped its first product in 1986 and is now a multi-national corporation, with over 35,000 employees in more than 115 countries. Today, Cisco solutions are the networking foundations for service providers, small to medium business and enterprise customers which includes corporations, government agencies, utilities and educational institutions Cisco's networking solutions connect people, computing devices and computer networks, allowing people to access or transfer information without regard to differences in time, place or type of computer system.

Q1: How is building a brand in a business-to-business context different from doing so in the consumer market?

From reviewing the text and in reading the Cisco case study, it seems that business-to-business marketing consists of a more direct approach through very specific channels of distribution. Business-to-business success is centered around more personal relationships between the partner companies. In the Cisco case this was demonstrated by Cisco's business to business relationships it developed with Matsushita, U.S. West, and Sony (Cisco).

In comparison, consumer marketing is targeted at all the major demographic groups. Consumer marketing aims to capture sales through major retailers thus removing the personal connection that is inherent in the business-to-business relationship.

In the Cisco case, it is obvious that throughout the 90's Cisco was extremely successful at working the business-to-business model and focused on technology companies and specific corporations to sale their internet based technologies too. This enabled them to become the largest company in the world in the 90's with over $500 billion in worth, however, they name brand through the consumer market was relatively unknown (Cisco).

Cisco began making acquisitions in the 21st century of companies such as Linksys which began their efforts toward consumer marketing, away from business-to-business marketing. Cisco has continued to change its messaging, focus advertising on customers, and worked hard to make its brand image known throughout the world the same as its competitors Microsoft and Apple (Cisco).

Q 2: Is Cisco's plan to reach out to consumers a viable one? Why or why not?

According to the case study, Cisco achieved a global ranking of 18 in 2008 with revenues of $39.5 billion dollars thus making its consumer based plan a seemingly viable one (Cisco). In reviewing the market conditions of the 90's which were wide open for internet technology and comparing that to the 21st century which has now been saturated with internet technology, Cisco is making a wise strategic move.By transitioning to a consumer based marketing company, Cisco is placing itself up against some very tough competition against Microsoft, Apple, and Dell, however, their continued growth seems to demonstrate they are holding their own with consumers (Cisco). Some of the key transitional actions from business-to-business into consumer based marketing that Cisco has made was to develop a message.

In 2003 the company began pushing the message of "This is the power of the Network", a catchy phrase consumers could relate with. Also, Cisco has consistently used television ads and other media outlets to help push its brand name to consumers and help the company gain market space successfully (Cisco).So, for Cisco, changing its business model to consumer based and making smart marketing decisions is helping the company refocus its efforts on the future

Conclusion:CSCO's revenue growth has slightly outpaced the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.The gross profit margin for CISCO SYSTEMS INC is rather high; currently it is at 65.71%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.92% trails the industry average.Despite currently having a low debt-to-equity ratio of 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.03 is very high and demonstrates very strong liquidity.

Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

You can view the full analysis from the report here: CSCO Ratings Report

Recommendation: "Cisco is in a very strong position Chairman and CEO John Chambers said. "Our vision and strategy are working and we are executing very well in a tough environment, as evidenced in our revenue growth, profitability, strong gross margins and cash generation.

Chambers continued, "We have a tremendous opportunity to extend our lead in the industry, and with Chuck Robbins as the CEO for Cisco's next chapter, we have exactly the right leader to capture that opportunity.""We rate CISCO SYSTEMS INC (CSCO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, attractive valuation levels and increase in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."