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1. Justify the following statement of Cisco's CEO "We are not acquiring current marketshare, but we are acquiring future".

Answer:

"We are not acquiring current market share, but we are acquiring future". Irrespective every

acquisition at Cisco, moreover, must meet Cisco guidelines.

As per the case, we see that the CEO always felt that you should never buy a company whose

values and culture are much different from your own. Nor do you buy a company that is too far

away from your central base of operations. The latter makes a cultural fit less likely and

severely limits the speed a company needs to compete in the new economy.

The CEO simply set one goal for the CISCO team ''If there are no results in 3 to 6 months, people

begin to question the acquisition, if you have good short-term wins, it's a virtuous cycle.''

CISCOs main model for growth is through acquisition and take overs. The main issue with sucha model is that the being acquired company faces a very difficult phase during the take-over.

The entire culture changes for all the employees and the CICSO working patterns need to be

adopted by all.

The primary goals for all ensuring the success of its acquisitions, in order of importance are as

follows:

1. Employee Retention2. Follow-up on new product development3. Return on investment

The statement made by the CEO is major based on the fact that the acquisition strategy for the

growth that CISCO uses builds a huge team of multiple companies from across the Silicon Valley

and brings them together for a very innovative future. CISCO being majorly in networking and

communications of internet based connection CEO Chambers said, More than 1.7 million

pages of information are accessible by employees who use the Cisco network thousands of

times every day. We are, the best example of how the Internet is going to change everything.

This shows the dedication and direction that the company is moving forward in. CISCO by this

time was already the number 2 in the market by volume and capital, so their main motto was

not growth but innovation and sustenance. Behind this was a highly strategized plan divided as

follows:

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1. Order and product flow into CISCO system,2. Recreate the bill and MRP system of CISCO,3. Covert the acquired company to the CISCO

MRP

4.

Covert to Autotest system

5. Evaluate Suppliers6. Covert to CISCOs outsourcing model,7. Determine product Life Cycles,8. Employ an acceptable defect reduction process9.

Adopt CISCOs forecasting technology

The main aim was to develop the networking, human and operational infrastructure very well suited

for an innovative and a highly sustainable future. Now as stated earlier that every acquisition also

had to be profitable, the main strategy was to envelope all the products of the new firm into its

portfolio and start selling them as soon as possible.

Even though there have been several companies in the Silicon Valley, yet there is a less visible but

even more critical danger; the inability to adapt to the speed and turbulence of technological change.

After massive high-tech investments, management is only beginning to make the organizational

changes needed to transform information technology into the potent competitive weapon that it will

need to be in the 21st century. Few companies have grasped the far-reaching importance of the new

technology for management and acquisition better than Cisco Systems Inc.