(Solution Download) 1 Discuss the nature of the market structure and demand

1. Discuss the nature of the market structure and demand for Cisco's products.
2. Given the industries in which Cisco competes, what are the implications for the major types of buying situations?
3. What specific customer benefits likely result from the Cisco products mentioned in the case?
4. Discuss the customer buying process for one of Cisco's products. In what ways does this process differ from the buying process an end user might go through in buying a broadband router for home use?
5. Is the relationship between Cisco's collaborative culture and the products and services it sells something that could work for all companies? Consider this issue for a consumer-products company such as P&G.
Perhaps you've heard of Cisco. It's the company known for those catchy "Human Network" ads. It produces the familiar Linksys wireless Internet routers and owns Pure Digital Technologies, the company that makes the trendy Flip video cameras. But most of what Cisco Systems sells is not for regular consumers like you. Cisco is a tried-and-true business-to-business company. In fact, it earned honors as B to B magazine's 2011 "marketer of the year." Three-quarters of Cisco's sales are in routers, switches, and advanced network technologies-the things that keep the data moving around cyberspace 24/7. But ever since the dot-com bust, Cisco has been pioneering the next generation of networking tools, from cyber-security to set-top boxes to videoconferencing.
This story is about much more than just a tech giant that makes the equipment companies need to run their Internet and intranet activities. It's about a forward-thinking firm that has transitioned from a hardware company to a leadership consultancy. In the process, there is one concept that seems to be the main driver of Cisco's business with other organizations: customer collaboration. Cisco is all about collaborating with its business customers to help them better collaborate internally with employees as well as externally with suppliers, partners, and their customers.
Collaboration Within and Without
John Chambers became the CEO of Cisco way back in 1995, when annual revenues were a mere $1.2 billion. He successfully directed the growth of Cisco as a hardware provider. But following the dot-com bust in the early 2000s, he knew the world had become a different place. In response, he engineered a massive, radical, and often bumpy reorganization of the company. Chambers turned Cisco inside out and created a culture of 71,000 employees that truly thrives on collaboration. As such, Cisco is the perfect laboratory where new products are developed, used, and then sold to external clients. Cisco not only manufactures hardware and software that makes all the sharing activity possible, but is also the expert on how to use it. All this collaboration has helped Cisco's business explode, hitting $43 billion last year.
Perhaps Cisco's advertising campaign, "Human Network Effect," best illustrates the company's philosophy. The campaign highlights the benefits that come to an organization when it utilizes its network of people more effectively. According to Cisco, the pragmatic approach of the campaign helps customers understand how Cisco's technologies can save them money, bring products to market faster, and even have an impact on the environment. This campaign has helped Cisco become the 13th most valuable brand in the world at the same time it has communicated why companies need Cisco's products and services.
Chambers tells the story of how Cisco began its transition from hardware into services. "Our customers literally pulled us kicking and screaming into providing consultancy," says Chambers. Some years ago, the CEO of financial services company USAA asked Chambers to help the company figure out what to do with the Internet. Chambers replied that Cisco wasn't in the Internet consulting business. But when USAA committed to giving all its networking business to Cisco if it would take the job, Chambers proclaimed "We are in that business!" Now, Cisco has both the products and the knowledge to help other companies succeed on the Internet.
A turning point for Chambers in further understanding the impact that Cisco can have on clients was the major earthquake in China in 2008.


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