Cisco Systems

CISCO SYSTEMS

1. Identify what you believe are the most important elements (criteria, processes, specific actions, ect.) of Cisco's approach to selecting and integrating acquisitions. For each of the elements you have identified, describe why it is important (what is its purpose)?

1) Assemble a broad product line in order to provide customers one-stop-shopping for networking solutions.

Cisco's strategy was using acquisitions and partnerships to gain access to new technologies. This strategy was relatively unique in the high-tech world, where many companies viewed looking to the outside for technological help as a sign of weakness. John Chamber believes partnership and acquisitions as the most efficient means of offering customers an end-to-end networking solution and developing next-generation products.

2) Cisco viewed acquisitions as means of introducing new products.

This is important because it more than simply adding to its lists of offerings, Cisco saw product development as a high leverage item, Cisco's goal was to quickly convert newly acquired products to it own NPI process and hopefully reap significant sales volume improvements.

3) Cisco looking for acquisitions to generate a high return on investment.

This is important because "if there are no results in three to six months, people begin to question the acquisition. If you have good short-term results, it's a virtuous cycles." They like to general result quick, Cisco made every attempt to have the acquired company's products appear on Cisco's price list on the day the deal closed so that Cisco's sales force would immediately begin to sell the new products. Effectively leveraging its distribution channels in this manner was one of the key drivers behind the significant growth in Cisco's revenues.

4) Cisco target specific acquisition candidates came directly from Cisco's business units, based on feedback from customers.

The reason they target with these specific company because Cisco already familiar with the company and they have worked with them before. It's easier to convert and fills in a need in to one of Cisco's product line. It can be leverage Cisco's existing infrastructure and resource base to increase overall value

5) Location close to Cisco facility

It is close to Cisco, so they do not have to relocate or have cost to have facility from other places.

2. How would you improve Cisco's acquisition and selection process? What is missing? What would you add or modify?

Cisco's