Ass|gnment S340

nUAWLI CISCC'S CnINLSL CnALLLNGLk

CuesLlon1) uescrlbe Lhe challenges opporLunlLles and LhreaLs faced by Pwavel as lL venLured lnLo
lnLernaLlonal markeL?
Answer1) Pwavel wlll experlence a changed world as opposed Lo lLs domesLlc Chlnese markeL wlLh Lhelr
plan of lnLernaLlonal expanslon varlous challenges opporLunlLles and LhreaLs are llsLed below
Cha||enges
O Chlnese producLlons have a percepLlon of cheap and unrellable and hence provlng quallLy and
hlgh performance Lo Lhe ouLslde world would be a blg Lask

O uue Lo Lhe new and low end lmage of Lhe company lL would be hard Lo earn conLracLs and
hence varlous oLher measures need Lo be applled ln order Lo galn access Lo Lhe markeL

O ln varlous markeLs Lhere are already blg esLabllshed names havlng long Lerm Lles wlLh Lhe
cusLomers and hence Puawel ls requlred Lo come up wlLh a sLrong sLraLegy Lo glve Lhe a good
reason for exlsLlng users a reason Lo swlLch

O @hey need Lo maLch wlLh Lhe updaLed Lechnology and quallLy of servlce already exlsLlng by blg
players ln many markeLs
Cpportun|t|es
O Puawel offers low cosL for Lhe equlpmenL wlLh marglns as hlgh as 40 and Lhls would glve a blg
advanLage and an opporLunlLy Lo sell lLs cosL efflclenL producLs Lo new expenslve markeLs

O @he company glves sLrong emphasls Lo 8u branch and spends abouL 10 of Lhelr revenue
annually on lL buL Lhe cosL of lL sLlll very low due Lo Lhe cheap labor cosL ln Chlna Moreover Lhey
have a hlghly quallfled pool of employees addlng more quallLy Lo Lhe [ob

O @helr sLrong experLlse 3C wlll deflnlLely glve Lhem an advanLage whlle compeLlng wlLh Lhe
exlsLlng players of Lhe lnLernaLlonal markeL
@hreats
O ne of maln LhreaLs Lo Lhelr lnLernaLlonal expanslon plan ls Lhe sLrong mlllLary rooLs of Lhe
company whlch ofLen makes many lnLernaLlonal parLles feel lnsecure

O Lher LhreaL ls Lhe LhreaL Lo Lhelr domesLlc Chlnese markeL as Lhelr sLrong aLLenLlon on
lnLernaLlonal markeLs may resulL ln loslng focus ln Lhe local arena


CuesLlon2) Pow dld company poslLlon lLself ln lLs lnLernaLlonal expanslon sLraLegy?
Answer2) Puawel knew LhaL enLerlng hlghly esLabllshed and efflclenL markeLs of developed counLrles
would be dlfflculL and hence lL sLarLed lLs lnLernaLlonal expanslon wlLh developlng counLrles ln order Lo
deal wlLh Lhe challenge of company's unrellable lmage Puawel wenL ouL of Lhelr way and offered
varlous lucraLlve lncenLlves llke Lhey bullL a parL of cusLomer's neLwork for free and Lhen asked Lhem Lo
LesL lL over a perlod Lo prove rellablllLy
Puawel dld collaboraLlon wlLh 3com of !apan Lo help lLs global plans as a 3com has a good name ln Lhe
lnLernaLlonal markeL 3com also has an efflclenL producLlon faclllLles and good 8u capablllLles
Puawel also Lrled Lo blend ln Lhe culLure of lnLernaLlonal markeL especlally ln uS so LhaL lL'll be easy Lo
convlnce Lhe local cusLomers
Puawel also sLarLed a lmage bulldlng campalgn ln 2004 whlch came ouL successful as Lhey were ranked
8
Lh
among 100 Lop wlre llne equlpmenL supplylng companles
CuesLlon3) WhaL are Lhe compeLlLlve advanLages of Puawel ln Lhe global Lelecom equlpmenL lndusLry?
Answer3) @he varlous advanLages LhaL Puawel have ln Lhe global Lelecom equlpmenL lndusLry are llsLed
as under
1) Puawel's capablllLy Lo produce low cosL equlpmenL as low margln as 40 wlLh Lhelr compeLlLor
ln Lhe markeL

2) @hey have a hlghly quallfled and lnexpenslve labor force Lo add quallLy and LhaL Loo aL a low
cosL
3) Puawel have always concenLraLed on 8u and havlng lL ln Lhe hlghly compeLlLlve and
Lechnologlcally dynamlc envlronmenL ls a blL plus

4) l also see 8en Zhengfel's mlllLary sLyled wolf pack enLerprlse sLyle also prepared Lhe company
for Lhe hard and flerce Llme Lo come

3) Puawel has been spendlng a large porLlon of Lhelr 8u on 3C and have also proved successful ln
lnsLalllng Lhe 3C neLwork ln many of Lhelr lnLernaLlonal markeLs



CuesLlon4) Can Lhese compeLlLlve advanLages be susLalned?
Answer4) @here are few advanLages LhaL can be susLalned whlle oLhers cannoL
@he advanLage of dellverlng low cosL seems Lo be noL worklng for fuLure as local servlce parLners ln
forelgn markeLs wlll ulLlmaLely ralse Lhe cosL of runnlng buslness Lhere
Also forelgn companles ln Chlna are lncreaslng 8u manufacLurlng Lhere and hence wlll soon become
capable Lo maLch Puawel's prlces
@he enLerprlse mlllLary sLrucLure mlghL fade away as Lhey venLure ouL ln Lhe lnLernaLlonal markeLs and
move Lowards decenLrallzaLlon
AlLhough Lhe emphasls of Puawel on 8u wlll sLay as Lhe lndusLry ls very dynamlc Lechnologlcally and
hence havlng good 8u wlll help

CuesLlon3) 8ased on your research and your oplnlon how ls Clsco performlng Loday?
Amswer3) Clsco ls currenLly sLandlng wlLh around 72k employees ln more Lhan 163 counLrles
malnLalnlng Lhelr markeL leadershlp poslLlon Llke always Lhey are sLlll Lhe cusLomer's flrsL cholce as
besL quallLy producL
Looklng aL Lhe sLaLlsLlcs Clsco conLrols ma[orlLy of Lhe markeLs ln Lhe dlfferenL segmenLs of Lhe markeL
@hey have conLlnually evolved Lhelr producL based on markeL needs @helr 8u has played a ma[or parL
ln maklng Lhem Lechnology leaders Clsco has spenL 13( abouL 338llllon us uollars) ln 8u ln Lhe year
2010 ln addlLlon Lo Lechnology Clsco has succeeded ln cusLomer saLlsfacLlon conLlnuously lmprovlng
slnce 1997
Clsco ls performlng good and growlng day by day keeplng pace wlLh Lhe changlng Lechnology