Cisco has been one of the most renowned tech companies for almost four decades of making. From making a few tech products, they now make nearly every type of product in the industry.
Having solid finance to back the expansion, keeping the global presence, and dominating the market, they are now on the verge of facing new challenges with time, such as supply chain, complex org culture, recessions, etc., which we will know in this cisco swot analysis.
We will get into a detailed discussion. Stay with us to learn more!
Cisco: Company Overview
| Company | Cisco Systems, Inc. |
| Industry | Networking Hardware & Software |
| Founded | 10 December, 1984 |
| Founder | Leonard Bosack, Sandy Lerner |
| Chairman & CEO | Chuck Robbins |
| Headquarter | San Jose, California, U.S. |
| No. of Employees | 83,300+ |
| Annual Revenue | $51.56 billion (FY 2022) |
| Website | cisco.com |
When the founders, Leonard Bosack and Sandy Lerner, husband-wife by relation, faced issues while they were trying to communicate via email but couldn’t due to network connectivity issues. And they invented a multi-protocol router and founded the company two years later in 1984.
They took the name from San Fran”Cisco” and started with only two of them and zero revenue to become one of the most valued companies in the world with more than 80K employees in 100 countries.
With more than $51.56 B in revenue, the most significant market share, an international presence, and more than 7000 channel partners, it is one of the largest companies in the world.
Product & Services of Cisco
Networking Hardwares | Networking Softwares
Cisco Competitors
Juniper | Fortinet | Microsoft | Huawei | NVIDIA | Dell | SonicWall | Barracuda
Did You Know?
To support new and innovative ideas, Cisco has an incubation program that caters to various tech ideas and entrepreneurs. And last year, they spent more than $200M on the program.
Strengths – Cisco SWOT Analysis
International Presence: Cisco has one of the largest and strongest dealer communities and distribution networks in more than one hundred countries worldwide. That not just helped build the brand value, but also reached people and got a firm hold of in consumers’ minds. And backstage, more than 75K people are working continuously to hold the market presence.
Strong R&D Team: In 2022, the company spent more than $1.781B just in the R&D wing. Continuous innovation is the only way to stay ahead in the technology industry. Robust funding, successful innovation, and new products and services coming into the market helped the company become the market leader.
Largest Market Share: Cisco held the industry’s crown with more than 45% market share in 2022. And in a few sectors, it has more than 50% capture, such as 51% in Ethernet and 56% in the ENI sector. And, with the industry growing and continuous innovation, the industry and the market share are growing.
Low-Priced Products: Most tech companies have the strategy of selling products and services at a higher price. But Cisco does precisely the opposite: to sell products and services at the lowest possible price compared to the other competitors, which leads to selling at a large volume and keeping the profit growing.
Healthy Cashflow: To keep the business running, having a healthy cash flow is crucial. One of the significant strengths of Cisco is that its revenue and continuously growing profit are steady. Even during the pandemic, their revenue was $49.301B, which is comparatively very healthy. And in 2022, it was $51.557B.
Positive Brand Recognition: A consumer’s perception of a brand is a game changer and determines many factors. Cisco has positive brand recognition and value, showing in its worth of around $21 B. And, not to mention, it’s in the top 20 brands globally by Forbes.
Weaknesses – Cisco SWOT Analysis
Supply Chain Disruption: Cisco deals with many high-volume orders, which comes at a cost to the supply chain end. The delay in the process is known in the industry, and it’s hampering the overall brand image. But, the CEO said that the disruption is noted, and they are trying to handle it at best as possible.
Downward Market Share: Even though Cisco is still the market leader, the market share is continuously decreasing. In 2022, they lost around 26.77% of the market share to the competitors, which was almost $195.70 B of the market. That was the biggest weakness noticed in the last year for the company.
Complex Organizational Culture: The top to frontline management of the company is very complicated. As a result, it takes time and executes expansion and other decisions in the market, leading to ineffective and inefficient overall operations.
Limited Investment: In the tech industry, investment is part of surviving in the market. Even though the investment amount is higher, that doesn’t seem enough for the future and is not up to the standard industry ratio. And we can see less and less innovation from the company in the last couple of years.
Opportunities – Cisco SWOT Analysis
Cloud Computing & Security: The cloud computing market has grown to more than $30 B and is projected to grow more each year. But Cisco has only a fraction of it in this big industry. With the worldwide network and other inspects, Cisco has the perfect opportunity to grab the market.
Increasing SaaS Products Demand: SaaS products are a hot item in the tech industry this decade. And this year, 2023, is estimated to be a $146 B market. But, in the last year, the revenue from SaaS Products was only $22.4 B, which they can grow into more.
Acquisition: In the last three decades, Cisco has acquired more than 200 small to medium-sized companies and spent more than $70B. As a part of the strategic alliance and growth, instead of spending more on R&D, they acquire more companies that can bring new tech to the market and growth potential.
New Digital Policies: As the world is moving toward more green energy and initiatives, the developed countries in Europe and other continents make the policies more suitable for tech companies. And as Cisco is already practicing these, that makes the process easier, gives them a competitive edge in the market, and increases the brand reputation.
Threats – Cisco SWOT Analysis
High Competition: Even though Cisco remained a dominant player in the tech market, it faces stiff competition from newer companies offering more innovative and specialized products. As a result, it lost a massive chunk of the market share in the last couple of years.
Consistent Market Volatility: Due to its nature, the tech industry is highly unpredictable and volatile. With the new tech products and services coming in every day, it’s always a significant risk. As a result, the revenue decreased, and they had to lay off around four thousand people.
Tons of Lawsuits: Cisco has faced many lawsuits, such as securities patent infringements and even discrimination. Besides, the company has been involved in and met many other allegations of bribery and corruption in countries like Russia and Ukraine.
Recession: Recession is another threat in this highly volatile tech product and service industry. In the 2008-2009 recession, the company’s revenue was affected due to decreased spending on technology. And, with the upcoming recession in 2023 or 2024, the company will face another hit in income.
New Entrants: With little to no barrier in some categories in the tech industry. In 2022, the number of new tech companies was more than five hundred thousand, which is enormous. And more than six thousand of them are from silicon valley, which makes the competition more challenging.
[Bonus Infographic] SWOT Analysis of Cisco
Recommendations for Cisco
The tech industry is growing every year, with new entrants and challenges. Even giants like Cisco must follow through and capture the market to survive in this market.
- They need to work on the supply chain to work more effectively and efficiently.
- The software market is increasing, and the opportunity to grab the market too.
- Prioritizing acquiring new tech companies with more innovative ideas, products, and services should be more effective.
- Removing all the bureaucratic barriers between the frontline and the top management can help implement new ideas and get results faster.
- The investment in the R&D wing should be more to innovate new products. Besides, they need to prioritize the product dev process.
Frequently Asked Questions (FAQs)
Does Google Use Cisco?
Yes, Google does use Cisco. Many tools, such as AI used in the cloud system, are from Cisco.
Does Nasa Use Cisco?
Yes, Nasa does use Cisco in their technology. And, in the future, Nasa’s Artemis mission will be equipped with Cisco’s products.
Final Words on Cisco SWOT Analysis
Cisco has a long history of dominating the industry with solid finance, positive brand recognition, and a robust international presence. But, the company’s poor management and organizational complexity are causing many issues. Besides, with the new entrants and the coming recession, they must stay prepared and strong to survive in the market.
References
- Wikipedia contributors. (n.d.). Cisco. Wikipedia.
- Cisco Research and Development Expenses 2010-2022 | CSCO. (n.d.). MacroTrends.
- Global Cybersecurity Market Analysis Report 2022: A $300 Billion Market by 2027 – Growing Adoption of Disruptive Digital Technologies. (2023, January 23). Yahoo Finance.
- Products, Solutions, and Services. (n.d.). Cisco.
- Cisco Revenue 2010-2022 | CSCO. (n.d.). MacroTrends.
- Cisco Achieves Its Biggest Brand Value Increase Ever. (n.d.). Cisco.
- Quicke, S. (2022, August 18). Supply chain problems are easing, says Cisco. MicroscopeUK.
- Cisco (CSCO) – Market capitalization. (n.d.). CompaniesMarketCap.
- Cisco Systems – Too hierarchical, too bureaucratic, out of touch with times. (n.d.). Glassdoor.
- Wikipedia contributors. (n.d.). List of acquisitions by Cisco. Wikipedia.
- USA: Government files lawsuit against Cisco for alleged discrimination based on Indian caste system. (2020, July 1). Business & Human Rights Resource Centre.
- Conerly, B. (2022, November 1). The Recession Will Begin Late 2023 Or Early 2024. Forbes.
