BU635 Global Operations and Logistics
INDIVIDUAL CASE REPORT
Cisco Systems Inc.: The Viking Challenge
Mr. Dave Swanston
20th March 2013
Cisco Systems Inc. is a $100 B technology company which provides internet networking solution to telecommunication and broadband service provider corporations. Cisco is leader in developing the networking equipment for the industry.
Cisco wants to develop a new generation router Aggregation Services Router (ASR) 9000 to satisfy the growing demands of market for faster and cheaper networking equipment. Cisco realized that to protect its leadership position in …show more content…
Demand of video networking was increasing at faster pace than expected because of YouTube and video-on-demand downloads. Cisco anticipated that within 12 months it needs to meet the demand of internet service providers of more bandwidth at lower prices to maintain its market share.
2.2 The Outsourcing Compulsion
Increased bandwidth was not the only demand in the aggregation router space. Cisco must develop better capacity machine with reduced cost in a competitive and cost-challenged market. Cisco management realized that to get the best quality product at lowest cost possible company not only need to innovate the product design but also need to optimize its supply chain. Maintaining low cost was also important for growth of global business. Developing nations were the fastest growing market for Cisco’s business. Keeping developing countries market in consideration, it is necessary to manufacture a router with best quality but at a cost which is acceptable globally.
Generally Cisco develops complex products with contract manufacturer in USA. This gives Cisco, the opportunity of close monitoring and making adjustment in design and other features of new products based on the feedbacks on prototypes provided to strategic customers for test run. Development