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Cisco Presentation

  1. 1. International Strategic Alliances Reasons for not exporting abroad Exportation alternatives Anne-Charlotte Bazoud Gabrielle Colombier Franzisca Guehlke Arnaud Katz
  2. 2. Contents <ul><li>Context </li></ul><ul><li>Aims – Objectives </li></ul><ul><li>Reasons for not exporting abroad </li></ul><ul><li>Case study of Cisco Systems </li></ul><ul><li>Conclusion </li></ul><ul><li>Sources </li></ul>
  3. 3. Context <ul><li>Foreign production </li></ul><ul><li>If exporting may not be feasible </li></ul><ul><li>Reasons for Foreign Production </li></ul><ul><li>Cisco Systems: Alternatives to exporting </li></ul><ul><li>and their effects </li></ul>
  4. 4. Aims - Objectives <ul><li>Show why companies might choose not to sell abroad by exporting home country production </li></ul><ul><li>Show the Reasons / Advantages for Foreign Production </li></ul><ul><li>Focus on the alternatives of exporting by Cisco Systems and their effects </li></ul>
  5. 5. III. Reasons for not exporting abroad
  6. 6. <ul><li>Cheaper to produce abroad </li></ul><ul><li>Transportation Costs </li></ul><ul><li>Lack of Domestic Capacity </li></ul><ul><li>Need to Alter Products and Services </li></ul><ul><li>Trade Restrictions </li></ul><ul><li>Country of Origin Effects </li></ul>Reasons for not exporting III Reasons for Foreign Production
  7. 7. <ul><li>Products / Services that costumers abroad would like to buy </li></ul><ul><li>Producing within their home markets may be too expensive </li></ul><ul><li>Companies from abroad can produce at a lower cost </li></ul><ul><li>I.e. Car Production in Turkey </li></ul>Reasons for not exporting 1. Cheaper to produce abroad
  8. 8. <ul><li>Some Products / Services become impractical to export </li></ul><ul><li>Transportation costs relative to production costs </li></ul><ul><li>Impossible to export </li></ul><ul><li>I.e Big Mac </li></ul>Reasons for not exporting 2. Transportation Cost
  9. 9. <ul><li>Excess Capacity: foreign prices on the basis of variable prices </li></ul><ul><li>Companies first produce in one location </li></ul><ul><li>Demand pushes: Companies build a second plant => meet demand & reduce transaction costs </li></ul><ul><li>I.e. Beetle Production in Mexico </li></ul>Reasons for not exporting 3. Lack of Domestic Capacity
  10. 10. <ul><li>Need to alter products to gain sufficient sales in foreign markets </li></ul><ul><li>I.e. electrical voltage </li></ul>Reasons for not exporting 4. Need to Alter Products
  11. 11. <ul><li>Some governments still restrict imports </li></ul><ul><li>Companies must produce in a foreign country </li></ul><ul><li>Market size of the foreign country / market potential </li></ul><ul><li>I.e. Automobile Production in brazil </li></ul>Reasons for not exporting 5. Trade Restrictions
  12. 12. <ul><li>Consumer desire / Nationalism </li></ul><ul><li>A belief that these products are better </li></ul><ul><li>French wine or german beer </li></ul><ul><li>A fear that foreign made goods may not be delivered on time </li></ul>Reasons for not exporting 6. Country of Origin Effects
  13. 13. IV. Case Study of Cisco Systems
  14. 14. Cisco Systems Presentation <ul><li>Founded: 1984 </li></ul><ul><li>Headquarters: San Jose, California, USA </li></ul><ul><li>Chairman: John Chambers </li></ul><ul><li>Products: Technology that facilitates communications </li></ul><ul><li>Slogan: “Welcome to the Human Network” </li></ul><ul><li>Employees: 61,535 worldwide </li></ul><ul><li>The world’s largest supplier of data networking equipment </li></ul><ul><li>The leading global supplier of computer networking solutions </li></ul>Case study : Cisco Systems
  15. 15. Cisco Systems Presentation Geographic composition of Cisco Systems net sales (2004) Case study : Cisco Systems Source : Cisco Systems, Annual Report, 2004, p.21.
  16. 16. Case study : Cisco Systems Growth Strategy Partnerships <ul><li>Strategic alliances </li></ul>Acquisitions Internal growth <ul><li>R&D investment </li></ul><ul><li>(Engineers, </li></ul><ul><li>Labs, Patents) </li></ul>Cisco’s alternatives to exporting
  17. 17. Parnerships Case study : Cisco Systems “ we are more powerful together that we ever could be apart” A Cisco quotation from the report “Strategic Alliances Update”, 2007, p.3 <ul><li>Globalization </li></ul><ul><li>Many partnerships </li></ul><ul><li>Objectives: </li></ul><ul><li>sharing technology </li></ul><ul><li>having goods and components produced </li></ul><ul><li>distributing worldwide </li></ul>
  18. 18. Strategic alliances Case study : Cisco Systems “ An agreement between companies that is of strategic importance to one or both companies’ competitive viability” <ul><li>Alliances help Cisco to achieve several objectives </li></ul><ul><li>Enhancing the competitiveness </li></ul><ul><li>Reducing costs </li></ul><ul><li>Expanding into new markets </li></ul><ul><li>Meeting customer needs worldwide </li></ul><ul><li>Examples </li></ul>
  19. 19. Positive Effects of these alternatives Case study : Cisco Systems <ul><li>To meet customer needs worldwide </li></ul><ul><li>To enhance its competitiveness by focusing on its and partnersips’s core competencies. </li></ul><ul><li>Improve processes </li></ul><ul><li>Reduce its costs </li></ul><ul><li>Enhance productivity </li></ul><ul><li>Provide Cisco a cost-effective means to expand into new markets </li></ul>Alliances enable Cisco :
  20. 20. Negative Effects Case study : Cisco Systems <ul><li>Challenges poses by managing collaborative agreements </li></ul><ul><li>Objectives are not always achieved as they were initially expected </li></ul><ul><li>Management of different organizational and national cultures. </li></ul>
  21. 21. Negative Effects Case study : Cisco Systems <ul><li>Challenges poses by managing collaborative agreements </li></ul><ul><li>Objectives are not always achieved as they were initially expected </li></ul><ul><li>Management of different organizational and national cultures. </li></ul>
  22. 22. Cisco Systems and its alliances Case study : Cisco Systems Setting up of a standard mechanics of partnership agreements which is continuously improve. Despite occasional problems, Cisco has continued strongly using partnership to extend its ability to service customer in more markets around the world.
  23. 23. 2008 Alliances Trends Case study : Cisco Systems <ul><li>Responsive to customer needs </li></ul><ul><li>Continued investment in alliances as differentiator </li></ul><ul><li>Major alliance globalization, encreased emphasis on Asia Pacifique and Emerging Market </li></ul><ul><li>Transform industries using vertical solution, partners in new markets </li></ul>
  24. 24. Conclusion Strategic alliances are a good way to avoid export problems and to succeed in foreign countries.
  25. 25. Sources <ul><li>Cisco Systems’ website : </li></ul><ul><li> </li></ul><ul><li>International Business:  environments and Operations , (11th Edition, 2007), Pearson Prentice Hall, John D. Daniels, Lee H. Radebaugh, Daniel P. Sullivan </li></ul><ul><li>Strategic Alliances Update: Recent developments and a view to the future , 2007, Cisco Systems </li></ul>
  26. 26. Thanks for your attention This presentation can be uploaded online User: « Group4Business »