An Analysis Of Business And Financial Performance Of Tesco Finance Essay

An Analysis Of Business And Financial Performance Of Tesco Finance Essay INTRODUCTION 1.1Topic Chosen This research and analysis report is about The business and financial performance of Tesco plc over a three year period from an investors point of view. The analysis will be carried out by looking at the key ratios, past trend and other important aspects with an aim to serve the current and prospective future investors in making investment decision. Quantative analysis which is based on financial aspects cannot give always the true picture so this analysis is also look at the non financial measures. J Sainsbury, one of the close competitor in UK has been chosen to compare with the Tesco plc to make the analysis more meaningful. Reason for the topic chosen As I am interested in analysing Business and financial performance in my previous studies so I have chosen this topic 8. This report will give me an opportunity to enhance my knowledge and chance to test my analytical skill. The reason for choosing Tesco for this research and analysis project is because I am always interested in retail sector and one of the most successful company in retail sector is Tesco in UK .Tesco currently hold more than 30% market share in UK with leading in supermarket (Douglas Hamilton, www.heraldscotland.com 15th Sep. 2010). Tesco is one of the fastest growing successful supermarket despite of many rivalry in same sector. Due to the fact of closest competitor J Sainsbury which is the third largest supermarket with market share around 16%, is chosen to compare the Business and Financial performance of Tesco. Tesco which used to be a food retail market is now expanding its territory of business from food retailer to various products under one roof such as furniture, electronic, mobile, financial services etc. The another expansion of Tesco will be the Tesco Bank (http://www.ft.com/cms/s/0/40d7a0dc-c5af-11df-ab48-00144feab49a.html). Sir Terry Lee Promise to build the peoples bank by capitalising on public disillusionment with traditional lender (http://www.ft.com/cms/s/0/40d7a0dc-c5af-11df-ab48-00144feab49a.html). Another reason that attract me toward Tesco which used to be the UKs supermarket once is now expanding around more than 13 countries around the world (UK, USA, China, India, South Korea, Japan, Including other Asian countries and some European countries). Tesco is opening its store making suitable to where it open just like its open in Indian as cash and carry in joint venture with Tata group the Indian largest business group (http://www.tescoplc.com/plc/ir/rns/rnsitem?id=1218521062nRnsL1207Bt=popup_rns August 12, 2008). As we know USA is one of the challe nging market for UKs supermarket Tesco admitted that they go wrong on early market research and they may makes big changes in stores (The Sunday Times, February 22, 2009). As Tesco sets its three challenging long term targets towards community: to become a zero-carbon business by 2050; to reduce the carbon impact of the products in supply chain by 30% by 2010; and to help the customers halve their own carbon footprint by 2020; in which they are making good progress. Tesco opens the worlds first zero-carbon supermarket in Ramsey, Cambridgeshire in 2010 (http://www.tescoplc.com/plc/about_us/tesco_story/). Tesco is growing consistently outside UK as well. Tesco chairman David Reid told in annual report 2010 about its growth in South Korea and china Our acquisition in South Korea is performing well and delivering excellent results, weve opened our first three Tesco Lifespace shopping malls in China and we have made good progress building the infrastructure and developing new products f or Tesco Bank. This gives us idea that how Tesco is going to tackle in abroad. Tesco is one of the successful and adaptable business with different products in any area around the world. The diversity and complexity of the business attract me to analysis the business and financial position of Tesco. 1.3 Aims Objectives The aim of the report is to research and analysis the business and financial position of Tesco from the investor point of view. As we know investors are risks adverse so investors want to know risks and return of the investment to make decision. For this investors are always want to know not only the financial data but also the companys strategic plans, market in which they operate and the trend in the outside world. Therefore Ive made the comparison between same industry businesses which give reasonable recommendation the best investment decision. Therefore the report objectives are: To analyses past and current position of Tesco To compares 3 years performance with J Sainsbury To analyses the reason for diversified market To analyses the long term financial sustaintibility of both companies. To analyses the short term liquidity stability of both companies To analyses the market shares of both companies. To analyses the strategic plan and the factors which benefits and detriment the companies from external and internal using SWOT analysis. RATIO ANALYSIS The following financial key ratios analysis has been performed during the research project: which formulae are in the appendix: Growth Analysis: Sales revenue growth Profitability: Gross profit margin Net profit margin Asset activity ratio Return on capital employed Stability ratio Gearing ratio Interest cover ratio Liquidity ratio: Current ratio Quick ratio Investors Ratio: Earning /share Dividend /share Price / Earnings Ratio Efficiency Measures: Net asset turnover Return on total assets The some non-financial analysis of Tesco is also performed. Such as: SWOT analysis Strategic analysis 2. INFORMATION GATHERING 2.1 Sources Used and Reason Annual accounts of Tesco and Sainsbury: Financial statements is the main source that help me to calculate financial ratios and analysis the trend of past three years which help to find out the financial conditions, changes and improvements over the three years from 2007-2010. For comparison annual accounts of both companies data are used from their website. Annual report of Tesco and Sainsbury: Annual report of both companies is the source of financial statement which enables to calculate different financial ratios and analysis the trend of past three years for the period 2007-2010 which help us to understand the financial conditions trends, improvements and changes over periods. For comparison annual report of both companies are used which are available from their website.   Newspaper and Journal: Newspaper and Journal are significant sources which provide information regarding share price, market conditions, competitors activities, market surveys etc. The article provides shareholders the most recent analytical and other information so makes them easy to make investment decision. Financial newspapers just like Financial Times, The Sunday Times, Guardian, City AM, Metro, Evening Standard are helpful for the research. Text Book: The ACCAs text books F7 (Financial Reporting), F9 (Financial Management), P2 (Corporate Reporting), P3 (Business Analysis) and other business analysed text books are used to gather source of information which help to give ideas about ratio calculations and analyse the business performance using different method such as SWOT, strategic analysis. They also give theoretical knowledge to do financial and non-financial interpretation of the company.    Interim Report: The interim report provides the current news and seasonality information on business performance of the company. The reports are reviewed by the external auditor as the requirement of London Stock Exchange because they are unaudited report. They are easily available on companys website for download. ACCA Student account magazine: The monthly published Student Accountant by the ACCA which help us in understanding the knowledge, research and analysed the report through different articles published specially on Technical Section.   Oxford Brookes Universitys research and analysis project guidelines: The Oxford Brookes link on ACCA website is very useful through the research project which gives guidelines about writing report such as format, content, and many others. Store visit: During the research, store visit gives me ideas about the current and future plans of both companies to meet their objectives such as price cut by introducing buy one get one free or half price scheme. 2.2 Methods used to collect information Library visit: The library research involves collecting data through secondary resources such as newspapers, books, press reports etc. I also visited the City Business Library for collecting financial data of both companies over past three years. City Business Library provides online resource collection centre such as Financial Analysis Made Easy (FAME) which contain the information about listed companies in UK and Ireland. I used FAME to get the detail information over three years of Tesco Plc and J Sainsbury Plc. That provides information about annual account, key ratios, market share and trends over past years. Website research: The officially release data such as financial statement, recent business strategy, press releases and interim results of both companies were directly obtained through the companies websites i.e.  www.tescocorporate.com  and  www.j-sainsbury.co.uk  . For the independent data and information the following websites were helpful which provides relevant latest news and information about both companies. The websites are: www.bbc.co.uk www.londonstockexchange.com www.ft.com www.guardian.co.uk www.telegraph.co.uk www.heraldscotland.com www.timesonline.co.uk www.google.co.uk 2.3 Limitation to information: The ratio calculated is based on past data so do not give clear view about company future performance. The ratio calculation is based on companies annual account. Company prepares its account to show they are in good position (may use creative accounting), to attract more investors. So it may not be the best way to make investment decision. The secondary source of data does not provide the sufficient information about the company as a whole which just help for surface performance analysis. 3. ANALYSIS AND PRESENTATION Overview Tesco plc was established with the name Tesco by Jack Cohen in 1919 which became floating company in 1947 with share price of 25p.But now Tesco is one of the largest supermarkets based on national and international market. Tesco has a well-established and consistent strategy for growth, which has allowed it to strengthen its core UK business and drive expansion into new markets. The rationale for the strategy is to broaden the scope of the business to enable it to deliver strong sustainable long-term growth by following the customer into large expanding markets at home such as financial services, non-food and telecoms and new markets abroad, initially in Central Europe and USA , and now also in the Asian countries such as India, China (www.tesco.co.uk). J. Sainsbury is a leading UK based food retailer with interest in financial services. The group is listed on London stock exchange and its headquartered in Holborn, London. It has been the market leader for much of 20th century in UK and in 1995 Tesco took its place and in 2003 it was pushed to third place by Asda. We now analysis the performance of Tesco comparing with Sainsbury below: 3.1 GROWTH ANALYSIS 3.1.1 SALES REVENUE GROWTH Tesco Tescos revenue have been increasing 4.54% compare with year 2009 ( £54,327m) to year 2010 ( £56,910m). But in 2009 ( £54,326), the growth is 12% as compared to 2008 ( £47,298). This is due to the develop market in previous year in early 2007 help the Tesco to generate more revenue in 2009 and 2010. In 2010, the world suffers from the recession due to that the growth is not so much. The sales in international market are up by 8.8% to  £19.4 billion (2010) as compared to 17.69 billion (2009). The sale in core UK is up by 4.2% in 2010. (http://ar2010.tescoplc.com/~/media/Files/T/Tesco-Annual-Report-2009/Attachments/pdf/Full-Review.pdf). The increase in revenue was due to the increase in sales of healthy foods products and non-food products which grows almost twice as fast as the rest of the business. Tesco one of the largest online seller supermarket in the world generates  £136millions profit from online sales (http://www.nma.co.uk/news/tesco-reports-%C2%A3136m-profit-from- online-sales/3012439.article ). Sainsbury Sainsburys revenue have also been in increasing trend with  £19,964 m during 2010, an increase of 4% over 2009( £18,911) and increase of 11% over 2008( £17,837) which is overall less than Tescos revenue growth. This is due to tough competition between competitors like Tesco, ASDA, and Morrison and the global recession. 3.1.2 PROFITABILITY MEASURES (i) Gross profit margin Tesco The gross profit margin has been increasing gradually over three years from 2008-2010 from 7.67% to 8.1%. The gross profit in 2008 is  £3,630m which increase in 2009 to  £4,218m with (7.76%-7.67%) only 0.09% growths than previous year and in 2010 further increase to  £4,607m which is (8.1%-7.76%) is 0.34% increase than previous year. The increase was due to the high sales, good productivity and good control in the cost of sales expenses. Sainsbury The gross profit margin of Sainsbury has been decreased from 5.62% in 2008 to 5.48% in 2009 even there was little increase in sales due to high cost of sales expenses. In year 2010 the gross profit margin further decrease to 5.42% was due to there is no control over cost of sales expenses. Even the sales revenue seems little bit more they may be due to price inflation but not the increase in sales. The gross profit margin of both companies is mostly affected by global economic recession but Tesco is doing quite well. Sainsbury find itself in difficult probably due to high competition with other high street supermarket like Asda, Morrison, and Somerfield. (ii) Net Profit Margin Tesco For the three years period Tesco is doing very good net profit margin is as compared to that of Sainsbury but there is decrease of profit from 2008 to 2010. There is high decrease in profit margin in 2009 mainly due to administration expenses and absorption of initial operating loss in Tesco direct and also due to the unseasonal weather in summer. There is also some impact of establishing of US store. But later in 2010 its going through little increase in profit margin which shows Tesco is in recovery stage. Sainsbury The net profit margin of Sainsbury has decreased little bit to 2.46% in 2009 as compared to the 2008. But in the 2010 the net profit margin has been very good with the increase of (3.67%-2.46%) 1.21% which was mainly due to the increased finance income from the bank deposit and return from pension scheme and good control over expenses. 3.1.3 Assets activity ratio (i) Return on capital employed (ROCE) Tesco Tescos return on capital employed (ROCE) has better than Sainsbury over three years. But while looking at Tesco only there is huge decreased of ROCE over three years from 14.08% in 2008 to 10.58% in 2010. That is due to the investment in new stores and new market development in order to gain. In 2009 to 2010 the ROCE is slightly increased which seems Tesco will again increased its performance. Sainsbury Sainsburys ROCE has been increased in the three years period time from 6.03% in 2008 to 9.09% in 2010. The increased was mainly due to effective cost control and also due to the increase net profit margin. 3.1.4. Stability Ratios (i) Gearing Ratio Gearing ratio measures the stability of the company for the long term. In simple, its the measure of long term debt as a percentage of equity. The company is more risky as the gearing increases because highly geared company have to pay the high interest on loans and also they dont have the ability to borrow more for any investment opportunity. Tesco Tescos gearing ratio was 149.14% in 2009 which is much more than 2008 which is only 87.06% which was due to the increased in borrowing for investment in international stores. But in 2010 Tesco has repaid its some of its debt so there is decrease in gearing. Sainsbury Sainsburys gearing ratio was also increased to 66.09% in 2009 from 44.54% in 2008 due to increased in debt and also decreased in shareholder fund. But in 2010 Sainsburys gearing slightly decrease to 63.81% because of repayment of its some debts and constant growth in shareholder fund. (ii) Interest Cover Ratio (ICR) The interest cover ratio calculates the number of times the profit before interest and tax can cover the interest (finance) costs. The company with higher interest cover is better, because there is lower financial risk. Tesco The interest cover ratio of Tesco is better than Sainsbury but while looking at its own previous year Tesco interest cover ratio is decreasing from 12.21times in 2008 to 6.49 times in 2010. This is due to high borrowing for investment plan and low profit increase. Tesco is still in better position to cover its finance cost and will be in best position when the todays investment starts to generate profit. Sainsbury Sainsbury is doing well in interest cover even there was little decrease in 2009 to 4.15 time from 4.63 in 2008 because there is decrease in profit. But in 2010 Sainsbury interest cover ratio increased 1.80 times than 2009 to 5.95 times because of increased in profit and also decrease in borrowing interest. 3.1.5 Liquidity Ratios (i) Current Ratio The current ratio gives an indication of company ability to meet its short term obligation with its working capital and continue trading. The higher the current ratio, the better the company position because there is sufficient liquid to cope with short term financial obligation. The standard current ratio should be 2:1.This rule does not fit for supermarket because as the supermarket do not want to hold high stock to avoid wastage and holding cost. Secondly there are negligible trade debtor but high trade creditors to whom they delay payment. Tesco Tescos current ratio has been increasing from 0.61 times in 2008 to 0.78 times in 2009 because of increase in stock level. But the current ratio in2010 is decrease as compared to 2009 to 0.73 times because of increase in trade creditors, short term loans, overdraft etc. The current ratio of Tesco is far below the standard rate of 2:1 because supermarket like Tesco does not want to hold more stock and nil debtors. Sainsbury Sainsbury current ratio was decrease in 2009 to 0.54 times from 0.66 times in 2008 because of low stock level and increase in short term loans. But Sainsbury again return to 0.66 times current ratio in 2010 because of increase in stock level and repayment of short term loans. (ii) Quick Ratio Quick ratio is also called acid ratio because it eliminate the stocks from the current asset and calculate the companys ability to pay off short term liability with its liquid assets. Ideally the standard ratio should be 1:1. Tesco Tescos quick ratio is increase in 2009 to 0.63 times from 0.38 times in 2008. And again fall to 0.56 times in 2010. This is much lower than average. This shows that Tesco cant able to cover its current liability with its current asset without stocks. But the nature of current asset and current liabilities in Tescos does not seem to have any liquidity problems. Sainsbury Sainsburys quick ratio is almost same over three years with slightly decrease in 2009 to 0.3 times from 0.4 times in 2008. But in 2010 again return to 0.4 times which is much lower than average rate. The consistency of ratios shows that there is no liquidity problems in Sainsbury. 3.1.6. Investor Ratios (i) Basic Earnings per Share (EPS) EPS ratio indicates the returns per shares from the investors point. Tesco Tescos EPS has been increasing gradually over three years from 26.95p in 2008 to 27.14p in 2009 and 29.33p in 2010. This is because of high profit. Sainsbury The EPS of Sainsbury is not seems so smooth as there is decrease in 2009 to 16.6p from 19.1 in 2008. But in 2010 there is nearly double increase to 32.1p. This shows the volatility in the relation to the shareholders. (ii) Dividend per Share (DPS) Tesco Tescos dividend per share has been increased to from 10.90p per share in 2008 to 11.96p in 2009 and 13.5p in 2010 which means Tesco is doing well to its shareholders. The main reason behind the increase in dividend per share is due to increase in net profit mainly from the national and international market sales growth. Sainsbury Sainsbury is also doing quite well in dividend per share which has been increase from 12.0p per share in 2008 to 13.2p in 2009 and 14.2p per share in 2010. From investor point of view Sainsbury is doing better than Tesco in dividend per share. As we know dividend per share were made internal from the company so they may contain false information to attract investors thats why investor should not concern on it. iii) Share price 1source: tescoplc.com Figure 1 share price movement of Tesco and Sainsbury Tesco share price is better than its rival Sainsbury over 3 years times. As we see from the figure Tesco share price on 26/2/2008 was 409.25p where as Sainsbury was only 368.50p on the same day. But the next year the both companies share price decrease due to the economy fall. In 27/2/2009 Tesco share price was only 338.20p where as Sainsbury has 321.75p. In 26/2/2010 Tesco is doing better in share price with increase to 422.40p with further increase in later in the year but the share price of Sainsbury fall down to 322.30p on the same day. Overall analysis As we see the trend of movement of share price of both companies it in decreasing trend with fluctuating economic condition. The decreasing trend is mostly due to the economic recession all over the world. From the starting of 2009, while there was a little bit start of recovery in world economy recession the share price of both companies are in increasing trend till now. But comparing the two companies it seems Tesco share price increase more rapidly as compare to Sainsbury because of the good performance of Tesco and the market strategy. iv) Price / Earnings (P/E) Ratio Price / Earnings ratio shows how much the investors are willing to pay per pound of earnings for a share. The high P/E indicates investors are expecting higher earnings growth in future. . Tesco The P/E has fall from 15.18 times in 2008 to 12.46 times in 2009 because of economic crisis but due to recovery in economy and good performance of Tesco, the price earnings ratio again goes up to 14.40 times in 2010. As compared to Sainsbury Tesco performance on last two years wasnot so good but in 2010 Tesco is doing quite well than Sainsbury. Sainsbury The P/E ratio of Sainsbury has risen a little bit in 2009 to 19.38 times as compare to 19.29 times in 2008. But in 2010 the P/E ratio fall dramatically to 10.40 times even there is going economy recovery in the world. The fall in P/E ratio seems not good for the company from the investor point of view as investor always willing higher earnings. 3.1.7 EFFICIENCY MEASURE i) Net asset turnover (NAT) The net asset turnover ratio represents the amount of revenue generated by the company as a result of its asset on hand. It measures how efficiently the company is operating. Tesco The net asset turnover of Tesco is decreasing over three years period from 2.38 times in 2008 to 1.94 times in 2009 due to massive investment in assets. Then there is a little bit decrease in net asset to 1.90 times which means the efficiency of asset is not quite good enough to generate the cash. Sainsbury Sainsburys NAT was quite good as compare to Tesco. There was also slightly increase in NAT from 2.54 times in 2008 to 2.66 times in 2009. But in 2010 again decrease to 2.48 times. The decrease in NAT may be due to saving investment in asset to cope with future economy crisis. ii) Return on total assets This ratio measures  a companys earnings before interest and taxes (EBIT) against  its total net assets. The ratio is considered an indicator of how effectively a company is using its assets to generate earnings before contractual obligations must be paid. Tesco Return on total asset in Tesco has decreased to 6.49 times in 2009 from 9.29 times in 2008 because of more investment in fixed and current asset. But this ratio was increase to 6.90 times in 2010. Sainsbury Sainsbury Return on total asset was decrease in 2009 to 4.64 times from 4.98 times in 2008. But in 2010 its increase significantly to 6.75 times which seem far better as compare to previous year which is mainly due to increase in earning. 3.2. NON FINANCIAL ANALYSIS (i)SWOT Analysis: SWOT Analysis is the simplest of positioning company internal analysis by strength and weakness also external analysis by opportunities and threats. After the analysis the company should build the strength, fix their weakness as they are internal factor and they should exploit opportunities and minimize threats to be successful. As we know opportunities and strength should match, then only the company able to exploit their opportunities. We are now looking at Tescos SWOT analysis: Strengths: Diversified Business: Tesco which used to be the food super store now spreading in other product market sectors such as clothing, mobile, petrol, finance etc makes it easy to cope with any kind of risks. This is strength because the risk of one market sector fails to gain sufficient revenue is spread among other sector to cover that loss. Global market: Tesco operates in more than 12 countries apart from UK with strong performance and good reputation which means Tesco should not depend on any specific territory to success. Brand name: Tesco brand name with slogan Every little help enables to launch their own different product with best quality that is in affordable price. The brand helps Tesco to attract new customer as well as keep the existing customer. Online sales: Tesco is the supermarket which is doing very good in online sales with tesco.com which avoids the investment in physical stores and for customer it avoids to visit crowded store and the fear of unavailability of product in store. Club card: Tesco offer its customer their own club card so they hold their customer to their store and also record the customers information about their most shopping and make that product availability. Stores: Tesco which got strong market share more than 31% is opening its stores looking the need of that area. Such as in business centre it open small Tesco Express and in residential area there are Tesco Extra, Metro, Superstore etc. So the competitors are unable to beat Tesco. Corporate social Responsibility: Tesco is not only making money itself also help the community through different charity programme such as Cancer Research UKs race in 2009. It also helps to protect the environment through encouraging customer to reduce use of plastic bag and also going to be zero carbon business by 2050. WEAKNESS Too much diversification: Tesco is diversifying in different market sector which makes it difficult to focus on particular sector. So Customer may not get the quality product or service which harms their reputation and may loss their potential customer. Lack of global Business knowledge: Tesco entered to global market without proper studies over there which makes them hard to face the competition such as in first year they face in US store Fresh and Easy. OPPORTUNITY. Expand on non-food market: Tesco which used to supply only food product is now has lots of opportunity in non-food product such as clothing, electronic, finance etc. Tesco has opportunity of generating lots of revenue through good customer service, smooth supply of non-food product. Knowledge utilization: Tesco which is now one of the international giant supermarket, there are lots of opportunities of using its global business knowledge and experience in expanding its global market in more countries and place which help them to generate more revenue. Strategic alliance: Tesco which is providing lots of service in one roof has opportunity to expand through alliance. So that the specialization company helps to provide better quality service and assist in promoting sales. THREAT Weakening Economy: Economic condition play the vital role in the performance of the company. It not only hits the one sector but also damage the whole industries. In recent year due to global recession every company facing difficult to survive due to decrease in purchasing power of customer. So it is necessary for Tesco to make certain strategy to tackle that problems. Competitors: There is always the biggest threat of existing and new competitors as the market is so attractive. The existing competitor such as Sainsbury, Asda, Morrison etc increasing their market shares so Tesco should always look for new strategies to cope that threats. Global management: Tesco is operating more than 12 countries which make them harder to manage the company because of different culture and rules. There is also different economic condition so need the certain knowledge and experience to cope with that threats. (ii) Strategic Analysis Tesco is setting its strategy to motivate towards the progress of the company by focusing on its customer as well as society. Before there were only four strategies which only focus on company performance but now they add one more strategy towards the community which is also on their corporate social responsibility. So now Tescos strategies can be analyzed under five main heading: a)To be successful in international retailer: Tesco is operating more than 12 countries and the experience of more than ten years in overseas; Tesco is making some of its strategy by the knowledge gain over there such as: Be flexible Act local Maintain focus Use multi-format Develop capability and Build brand. b) To grow core at UK business: Tesco group business is significant within the UK with over 2,200 stores and more than 70% of group profit from UK business. Tesco is dominating UK market share with approximately double than its rival. Tesco has four main type of store to fulfill the need of customer such as Express, Metro, Superstore, and Extra. They also in trail of new format of

E Business at Cisco Essay

Introduction Cisco Systems, Inc. is an American multinational corporation that designs, manufactures, and sells networking equipments around the globe which is considered as the giant in networking. Cisco headquarters locate in San Jose, California, United States. Cisco hardware, software, and service offerings are used to create the Internet solutions that make these networks possible, giving individuals, companies, and countries easy access to information anywhere, at any time. Cisco has pioneered the use of the Internet in its own business practice and offers consulting services based on its experience to help other organizations around the world. Cisco was founded in 1984 by Leonard Bosack and Sandy Lerner, a married couple who worked as computer operations staff members at Stanford University. Richard Troiano joined later with them. The stock was added to the Dow Jones Industrial Average on June 8, 2009, and is also included in the S&P 500 Index, the Russell 1000 Index, NASDAQ 100 Index and the Russell 1000 Growth Stock Index. John Chambers is the current Chairman and CEO of the Cisco. Company revenue was US$ 46.061 billion in 2012, while its operating income was US$ 10.065 billion. Net income US$ 8.041 billion 2012 while it has US$ 91.759 billion 2012 of total assetsand total equity of US$ 51.301 billion in 2012. E – Business Innovation at Cisco Cisco’s e-business innovation has begun in early 1990s. Cisco’s annual revenues increased from $1.5 million to $340 million in 1992. Their market share rose from 50% to 85%. It was a big challenge to meet the high demands generated by rapid growth of their sales. In order to serve their customers they had to †¢Hired engineers as quickly as possible, growing the engineering staff at over 160% per year. †¢Extended telephone support hours. †¢Invested in a system to prioritize calls. †¢Built the technology to remotely diagnose problems customers had with their products. †¢Offered training courses and consultations services to customers. During early 1990s companies invest a fixed portion of their annual budget on IT. It was 0.75% in Cisco 1993. In 1994 board of directors approved to invest on implementing $15 million Oracle ERP system. It was 2.5 % of 1993 revenues and more than 3 times the previous year’s IT budget. Company also approved total budget exceed $100 million to upgrade IT in the company. That upgrade integrated all of Cisco’s systems, and provided the company with a centralized information source. Cisco tried to use information technology to overcome the issues involve with high demand. It launched an official Internet site Cisco.com, primarily dedicated to company and product information as a result of that in 1991. It also launched the Cisco Connection Online for Cisco’s customers, which include a Technical Assistance Center where customers could easily solve their technical problems, and a list of product faults and remedies for faults. It also set up electronic bulletin boards. These initiatives forced online technical assistance which simplifies the burden on Cisco’s engineers and customer service representatives. Customers could download software updates, check manuals and email Cisco employees with questions by the 1993. Cisco E-Business Models Cisco involve in Business-to-Business (B2B) e-commerce as well as the Business-to-Consumer (C2C) e-commerce. B2B Businesses can gain significant financial returns, can attract and retain customers, reduce their expenses and uplift their reputation, brand name and corporate identity with favorable return on investment with the use of the Internet and e-business strategies. It helps to increase employee productivity, support for decision-making etc†¦ B2B facilitate electronic transactions to happen between businesses. The Internet and business’s dependency on other businesses for their supplies, utilities, and services has enhanced the popularity of B2B e-commerce. Extranets are the most commonly used for B2B operations in recent time. Extranet can be consist of at least 2 intranet or more than that. B2B e-commerce allows dynamic interaction between business partners. Cisco uses extranet with their Web based EDI to coordinate among their suppliers and manufactures via the Cisco Supplier Connection (CSC) which was formally known as manufacturing Connection Online. CSC was launched in June 1998. Registered users can access this through the Cisco website. CSC has integrated Cisco’s first-tier suppliers such as Ariba, Great Plains, J.D. Edwards, Lawson, NetObjects, NetSales, OneCore, PeopleSoft, QuickMarketing, and Works.com to Cisco’s ERP order fulfillment systems and inventory databases. This provides Cisco the opportunity to respond to their customer requests in real time. Orders are check with Cisco’s current production schedule, and at the same time their first-tier suppliers get inform of any deviations from production forecasts by automatic postings on the extranet as soon as a customer place an order. Suppliers can respond immediately to requests for supplies since they get informed real time with actual orders. Since Cisco is keeps inventories CSC also keep track on inventories and transfer inventory between different manufacturers to respond to component shortages. Other than that all the purchase orders and invoices are processed electronically with the help of CSC. Cisco uses their CSC at new product introduction processes as well. It helps to share information between engineering, procurement, manufacturing, and marketing sections in each sub processes such as design, prototyping, ramp-up, quality assurance and product specification. Overall cycle time to market new products gets reduce due to this collaboration. Cisco also developed a system for automatically testing products to ensure they were up to Cisco’s specifications and ready ship. If there are failures in an assembly line or auto test, Cisco get alert immediately by the manufacture. This prevent whole batch of products get affected by a common fault. FedEx, Cisco’s shipping partner get automatically alert as soon as order ready for shipment. Then the order assign a shipping number, pick up at the manufacturer, and deliver by FedEx to the customer. Direct fulfillment is also a part of Cisco’s B2B e-commerce. It automates all the required information in-order to support direct shipping of products which are configured by suppliers, directly to customers without going through Cisco. Cisco’s B2B processes also uses Dynamic replenishment, which allows market demand information to flow directly to manufactures without any delays. B2C Cisco is not a company which implemented B2B e-commerce, they are also practicing B2C e commerce as well. They have implemented Cisco Connection Online (CCO) in-order to handle the B2B and B2C e-commerce activities. In early ages customers had to talk with a sales rep if they wanted to buy something. Due to the mistakes by sales reps and complexity of product line only about 75% of orders were entered correctly. Other 25% had to be re-entered. Cisco has introduced their e-commerce site as a solution for this. Cisco was able sold $75 million worth of products on the Internet within first 4 months. Cisco was able to overcome the issue of 25% error rate in customer orders with the introduction of their website. 27% of all orders were placed using the Internet in 1997. It was said that there were 70,000 registered users in that time and they were accessing website 700,000 times per month. This not only minimizes the error s in customer orders but also it helped Cisco to save $150 million per year by delivering technical support through the website. It increases Cisco’s customer satisfaction ratings and Cisco’s productivity was improving rapidly. Cisco upgrades their CCO regularly with the help of consulted groups known as Internet Commerce Advisory Boards (ICABs), it consist both Cisco employees as well as their customers. This is also use to do global market researches. Cisco provided localization to their first few page levels of their website since August 2000. All prices were quoted in the appropriate currency, based on an accurate exchange rate with the localization. Cisco Connection Online – CCO CCO is a portal. It consist information in Cisco’s ERP systems, databases, legacy systems, and client-server systems. CCO connects with Cisco’s extranets which they are using for their suppliers and partners. This consist of 5 modules 1.Market Place 2.Technical assistance and software library 3.Customer service 4.Internetworking Product Center 5.Cisco supplier connection (CSC) Market Place is the front-end virtual shopping center describe in above, where customers can purchase items online. It also includes equipment configuration details, prices of products and purchase requisition tools. Customers can use purchase requisition tools if they want to take print out for submission of company purchase orders. Resellers and distributors are also using this module to place their orders online. Technical assistance and software library consist of an open forum which enables customers and business partners to get online answers to their technical questions. Users also can download driver updates and utility software through this. It also includes tools provide technical assistance to identify issues in Cisco equipments and take needed preventative or repair measures. Cisco was able to save millions of dollars spending on CD burning and shipments with the introduction of software library. Technical assistance forum led users to post their questions and search for answers, interact with networking experts who are willing to offer their help. This simply creates a virtual community of technical experts and it led Cisco’s experts only to focus on critical and urgent issues. Customer service provides non-technical assistance to consumers who are looking for details like product status, price catalog, latest releases, and their service order status. Internetworking Product Center is an application use for handle order processing. This can advise users if there is any missing information in product configuration when users are placing their orders online. Therefore reworking is minimized. Since this application connects with Cisco’s order management system to its scheduling system, customers and partners can access information about the current status of their orders. E-Business Types at Cisco Cisco has implemented more than one business types in their online presence. Cisco successfully running store-front model as well as the portal model through their web presence. Other than the above 2 models they also implemented B2B e commerce and EDI as a part of their E-Business initiative since early 1990s. Store-Front Model This is the most popular e-business model in the current context. It allows users or consumers to do their shopping online without going to a physical shop. According to the statistics about 60% of the internet users involve in online shopping activities. This model allows merchants to sell their products on the Web. Online transaction processing, security, online payment, information storage should be mainly considerable factors in this model. Cisco’s storefront model include †¢Online catalog of their products †¢Order processing system †¢Secure payment system †¢Timely order fulfillment system This allows Cisco to conduct their business 24 by 7 in 365 days of the year. A shopping cart allows Cisco to display photos and descriptions their products by category (routers, switches, servers, etc†¦). Consumers are allow to browse through those categories and its’ items then selects items that they want to buy and puts them in their cart. Consumers can the check out what they have selected and those orders are sent to Cisco. (90% of these orders are directly sends to Cisco’s suppliers. Orders are process in just in time based.) According to the Cisco CEO nearly 90 % of orders placed on Cisco’s website, the Cisco Connection Online (CCO), and nearly 80% of all products were built and shipped from a supply partner, without Cisco ever physically taking possession. This shows how Cisco has utilized their e-business strategies in-order to give a better customer satisfaction. Portal Model Cisco portal model provide their consumers the chance to find almost everything relate to internetworking. Cisco provides a vertical portal. It consist information from simple switches to Data Center Management and Automation, from Routing Services to Data Center and Virtualization Services, from home consumers to ISPs. It also consists of all the information relates to examinations conduct by Cisco such as CCNA, CCNP etc†¦ EDI – Electronic data Interchange Cisco handles B2B e-commerce via the applications which are implemented for its consumers. These solutions allow Cisco to sell its’ products and services and manage their customer and supplier/partner relationships over the Internet. Cisco use their e-business strategies as a model of how to use the Internet as co-operation tool to increase the productivity and efficiency of a company by utilizing and transforming their manual process with the help of information technology. As mentioned early customers can browse product specifications and make orders via Cisco.com. That information then directed Cisco’s suppliers without any intervention of Cisco. Products are produce only after they are ordered (just in time). Therefore the amount to spend on warehouses to store products is very much little. Cisco doesn’t like to obtain many B2B relationships with the technology and the infrastructure that they work, because they consider suppliers as a time and labor intensive expense to them. Cisco has created the demand for products that can ease and speed up B2B transactions with the implementation of their Global Network Business model. Cisco tried to cut down almost all the intermediaries in-order to increase their profit margins as well as to get competitive advantages with introduce of Electronic Data Interchange in 1997. EDI helped Cisco to †¢Gained real-time access to its supplier information. †¢Experienced lower business costs in processing orders (an estimated $46 per order). †¢Improved the productivity of its employees involved in purchasing (78% increase). †¢Reduced overall order cycle time. Cisco saved $250 million per year in business expenses through their new e-business initiatives in 1997. E-Business Categories at Cisco We can categories Cisco’s e-business initiatives under few main categories. e – Procurement, e – HR, e – SCM. E – SCM All the internal information systems of Cisco can be access by all the suppliers and other partners who are in Cisco’s supply chain. This system can be identified as a distributed knowledge management system since the employees have the same access rights to information as Cisco employees. Cisco was able to integrate all collective capabilities of supply chain partners and integrates all supply chain activities with this system. This system standardizes and streamlines all the internal processes with Cisco Employee Connection (CEC). It also streamlines external processes by seamless integration with suppliers and customers in terms of Manufacture Connection Online (MCO) and Cisco Connection Online. Materials and inventory position, product availability, price information, purchase orders and changes, vendor receipt/acceptance, Invoice payments and status reporting information are all visible among partners, including design-related information and sales forecasts. Since lack of mutual trust and unwillingness to share information among the partners appear to be the greatest obstacles in the way of e-collaboration, Cisco formed strategic alliances and long-term partnerships with their suppliers and customers, based on mutual trust and win-win strategy. e- HR with Cisco Employee Connection CEC was initially launched in 1995 and it was designed to store company information. But when HR department was in trouble with handling a various HR tasks manually, Cisco tried to move their HR processes to the CEC. As a result of that Cisco successfully launched expense reporting system first. With the success of that sub system Cisco started to digitize all their HR activities. CEC provides details and many interactive tools which can be use to facilities, travel arrangements, technical documentation, human resources, training, sales and marketing, and financial matters. Other than the standard categories like products, business functions, and company and employee information, CEC also provide some other categories for specific tasks. One category is for their new recruitments. It provides details about the company and also it consists of frequently asked questions. Professional staff category provides job-specific tools relating to sales, engineering, management, and system engin eering. Cisco’s Customer Base In early ages Cisco sold router products to corporations for corporate LANs and WANs. But with the rapid growth of the Internet since mid of 1990s, Internet service providers (ISPs) became an important market for the Cisco. Due to the technological advancements in the telecommunication industry, data and voice networks has gained speed. Therefore local exchange carriers and traditional telephone companies also become important segment in Cisco’s customer base. In the present company have differentiate its customers into four major segments those are 1.Enterprises. 2.Service providers. 3.Small/medium-sized businesses. 4.Home consumers. All categories of customers having their own complex challenges, when it comes to implement and maintain global data networks, since the technology that they are dealing with rapidly change over the time. Charles Giancarlo says that â€Å"it takes an unusual level of dedication, effort, and focus from both sides in order to build some of these networks. Both sides must make an inordinate investment in order to be first to market.† When it comes to service providers or the corporate market Cisco deals with consumers who know what to do and how to do. Therefore Cisco can’t manage them as normal home consumers. These relationships are more complex that normal consumer relationships. They decide from where to buy equipment based not only the quality of the products but also factors such as companies who are willing to supply their financing and other services. Sometimes they consider firms who are assisting them in dealing with government to acquire rights of way for wiring. Therefore Cisco started to consultative, partnering role with Telco customers. Cisco trying to assists them with everything. It spread from networking products and installation to financing, support services, even up-to business-model planning. It is not enough to merely offer them a new service that can enhance quality on their network. Cisco must also advise them on how best to profit from it. Strengths / Positive Aspects When it comes to the discussion of the positive aspects of the E business module, it can be accomplished after analyzing these three types. The benefits of e-commerce can be seen to affect three major stakeholders’ organizations, consumers and society. Cisco market place became that an international marketplace without any influence, single physical marketplace located in a geographical area has now become a borderless marketplace including national and international markets. By becoming e-commerce enabled, businesses now have access to people all around the world. In consequence all e-commerce businesses of Cisco have become effective multinational companies. Operational cost saving is a big advantage because of this. The cost of creating, processing, circulating, storing and retrieving paper-based information has reduced. E-commerce has transformed the way consumers buy goods and services. The pull-type processing allows for products and services to be customized to the cust omer’s wants. Enables reduced inventories and overheads by facilitating ‘pull’-type supply chain management this is structured on collecting the customer order and then delivering through JIT (just-in-time) manufacturing. This is particularly valuable for companies in the high technology sector, where stocks of components held could quickly become obsolete within months. No more 24-hour-time constraints. Businesses can be contacted by or contact customers or suppliers at any time. Consumers can gain access to the websites on anytime, 24 in 7.Makes it possible for customers to shop or conduct other transactions 24 hours a day, all year round from practically any location. Checking balances, making payments, obtaining status and other details are some important characteristics which we can see because of using this kind of E business module, but also an international selection of suppliers, Price comparisons can be done. Customers can ‘shop’ around the world and conduct comparisons either directly by browsing different sites, or by visiting a single site where price ranges are aggregated from a number of providers and compared. Delivery processes can be improved. An environment of competition where significant discounts can be founder value added, as different retailers vie for customers. It also allows many individual customers to aggregate their orders together into a single order presented to wholesalers or manufacturers and obtain a more competitive price. This system enables more adaptive enough working practices, which enhances the quality of life for a whole host of people in society, enabling them to work from home. Not only is this more effortless and offers happier and less stressful working environments, it also potentially reduces environmental pollution as fewer people have to travel to do their ordering and other stuff. Enables people in developing countries and rural areas to enjoy and access products, services, information and other people which otherwise would not be so easily available to them. It encourages delivery of public services. When we analyze about the strengths thoroughly, and when we consider it as organization vise that site saved Cisco time and reduced the need to hire. Customers welcomed the opportunity to browse a website and solve problems on their own rather than dialing into a busy support line. Seeing the cost advantage of selling online Cisco began to provide its network products for sale on its websites and web sales grew rapidly until they accounted for the majority of Cisco’s sale. Cisco also began to look for other ways to take advantage of its website. The sales force complained that they were always asked by customers to perform routine tasks, such as re-printing a customer invoice. Cisco widened the online offerings and allowed customers to reprint invoices, ch eck the status of service orders, and even maintain and price products. In addition to making life easier for customers, Cisco employees were able to escape much data entry. Cisco soon made much more customer information available online by linking customers to the Oracle ERP system. The IT department of Cisco began to investigation with other ways to leverage the power of the Internet. The department’s efforts guided to three separate Internet initiatives: Cisco Connection Online (CCO, for customers), Cisco Employee Connection (CEC), and Manufacturing Connection Online (MCO). In those days, customers still had to talk with a sales rep whenever they wanted to make an order. In part due to the complexity of Cisco’s product or service line (all orders were in importance custom orders), only 75 percent of orders were entered correctly; the remaining 25 percent had to be re-entered. As a result, Cisco started to consider about how it could use technology to improve the purchasing procedure. An e-commerce site was completed and launched in July 1996. The site was simple but advanced enough to ensure products were precisely set up. As a result, Cisco was able to drop its customer-order error rate from 25 percent to 1 percent. Even though Cisco believed that the site was not as user-friendly as it could be, 60 percent of Cisco’s technical support was now delivered automatically via the web, Cisco’s customer satisfaction ratings were rising, and Cisco’s productivity was improving considerably as was their customers. The Cisco Employee Connection (CEC) was Cisco’s intranet site. Initially, it was deliberate to hold company info and act as an internal newsletter. It consisted only of a bulletin board of information, simple search engines, and email. But as the CCO grew in popularity and function not long after, the team tried to update the process of expense settlement. The team faced many challenging technical problems, such as linking expense app rovals with the American Express corporate card systems, and was met with significant internal resistance to change. Senior executives, who were responsible for approvals, demanded that any new system prove easier to use than the old paper-based system. Consequently, many approvals were eliminated. Cisco’s software engineers were forced to design the program internally because there were no regular programs that could handle the task. They succeeded. Cisco employees were able to submit expenses online and get refunded by direct deposit within a few days. Cisco’s Manufacturing Connection Online (MCO) was crucial in allowing Cisco to grow. Just as Cisco had problems hiring enough engineers and customer service reps, it also had long been affected by problems expanding its manufacturing operations quickly enough to meet the surging demand for its products. Faced with a choice of restricting growth or outsourcing manufacturing, Cisco chose to outsource. Originally, Cisco outsourced only a portion of the manufacturing process. Cisco still warehoused components and performed final assembly and testing before shipping finished goods to its customers. Soon, however, in order to cut costs and improve delivery times, Cisco wanted deeper relationships with its partners. They asked partners to incorporate their IT systems with it. The result was an automated order fulfillment system known as the Manufacturer’s Connection Online (MCO). The MCO allowed Cisco’s partners direct access to customer information, sales projections, and product specifications. Partners could also alert Cisco to work stoppages, part shortages, and other issues. Once a customer placed an order on the Cisco.com site, the manufacturing partner was immediately notified electronically. The manufacturer’s network immediately transmitted the order to the actual assembly line. Later, Cisco developed a system for automatically testing products to ensure they were up to Cisco’s specifications and ready to ship without the product ever leaving their manufacturing partner’s premises. Once an order was ready for shipment, Federal Express, Cisco’s shipping partner, was automatically notified, the order was assigned a shipping number, picked up at the manufacturer, and delivered by Federal Express to the customer. In the event of an assembly line problem or auto test concern, the manufacturer immediately alerted Cisco through the MCO, which then alerted the customer. Because the MCO and the CCO were integrated, customers could check on their order’s status at any time. In addition to the Cisco Connection Online, the Cisco Employee Connection, and the Manufacturing Connection Online Cisco’s accounting and HR departments featured an amazing level of automation. Cisco executives could view up-to-the-minute sales figures from around the world at any time. Additionally, Cisco was able to close its books within a day. Automated functions within HR included the capability to accept job requests online and to review and sort applicants by crucial variables, such as skill level or former employer. Flexibility was as critical as functionality to Cisco’s e-business systems. These all the capabilities are rewarded to the Cisco because of the E-business module. Weaknesses / Negative Aspects There was much hype surrounding the Internet and e-commerce over the last few years of the twentieth century. Much of it promoted the Internet and e-commerce as the solution for all ills, which raises the question. Limitations of e-commerce to organizations Lack of sufficient system security, reliability, standards and communication protocols, and security holes in software. It leads to confidential client information growing to be available to all. Rapidly evolving and changing technology, so there is always a sense of trying to ‘catch up’ and not be left behind. The simplicity with which business models can be copied and emulated over the Internet increases that pressure and curtails longer-term competitive advantage. Facing increased competition from both national and international competitors often leads to price wars and subsequent unsustainable losses for the organization. There is no real control of data that is collected over the Web or Internet. Data protection laws are not universal and so websites hosted in different countries may or may not have laws which protect privacy of personal data. Physical contact and relationships are replaced by electronic processes. Customers are unable to touch and feel goods being sold on-line or determine voices and reactions of human beings. There is no good faith between the two parties, because they are bonding with faceless computers. As people become more used to communicating electronically there could be an erosion of personal and social skills which might eventually be detrimental to the world we live in where people are more comfortable interacting with a screen than face to face. There is a possible threat that there will be enhance in the social divide between technological haves and not’s. So people who do not have technical skills become unable to secure better-paid jobs and could form an underclass with potentially dangerous implications for social stability. When we turn towards the Cisco, while the decentralized system, combined with an emphasis on staying close to the customer, had been incredibly successful for Cisco so far, it was not without problems. First, as the company grew, it became more complex, and the advancement process became more puzzled. Much of the organization was impacted when new initiatives were introduced. A major challenge was simply staying connected maintaining employees throughout the organization cognizant of current initiatives and the significance of those initiatives. In addition, it was corporate for different business units to follow initiatives that were substantially the same. Conflicts or duplications often had to be resolved by the IT department as various endeavors were implemented on Cisco’s website. There were also questions about the types of initiatives produced under the decentralized system. Because they were often influenced by customer feedback, these initiatives tended to be of the incremental, short-term variety. It was not clear how much effort was being devoted to creating true breakthrough approaches, nor was the appropriate level of effort clear. Moreover, it was becoming clear that there were opportunities to co-develop, co-design, and co engineer new e-business processes with external organizations, including clients and partners, but it was not clear exactly how to approach these possibilities or how to make them routine. Opportunities Traditional supply chains which are involving in product development, production, distribution, and sales cycles are not capable of dealing with dynamic customer demand in the current context. Businesses need to run parallel activities and higher level of flexibility in their operations in order to co-up with the rapid changes in demand. Procurement, inventory management, production and distribution are getting affected due to this nature. Businesses can accommodate e-business models deal with those demands. Cisco is also using the e-business to handle parallel activities in order to archive their business targets. 1. Cisco TAC service This is an online service, where users with a valid service contract can, get Cisco’s engineering services by describe their issues and attach files to the service request, and those requests will route the appropriate engineer as soon as possible. Users can get the help of tools that are available on Cisco.com in order to do these requests. In this way Cisco is able to manage their support calls and cases very quickly. Cisco TAC engineers are attending to the case very quickly and they even login to the faulty device using Cisco WEBEX sessions in critical issues. Cisco provides their warranty items in least amount of time to make sure the zero down time of the network. Customer satisfaction is main advantage of this service, reputation of Cisco networks are increased due to this process. By using these kinds of techniques Cisco makes their tasks very easy to manage. Cisco has great opportunity to attract more consumers and retain their existing consumers with the help of this kind of services. 2. New inventions Early 2006 Cisco introduced new product called Cisco TelePresence which has the ability to communicate with the broader community of Cisco TelePresence users with Life-size, high-definition video and CD-quality audio in a premium room environment using Collaborative tools such as presentation sharing and high-definition document cameras Services available by the hour in easily accessible public business-class locations. Recently Cisco introduced new data center family switches named as â€Å"Cisco nexus† in 2008 which will meet customer demands for next-generation mission-critical data centers. The Cisco Nexus 7000 Series, the flagship data center-class switching platform combining Ethernet, IP, and storage capabilities across one unified network fabric. Also nexus family virtual switches were introduced by Cisco to enhance the network virtualization. â€Å"Nexus 1000 V† is a virtual switch that can be used to control the data traffic among virtual machines in a data ce nter environment. Cisco nexus, Virtual switches, Cisco Techwise TV, Datacenters and clouds Virtualization, Virtual desktop infrastructure are some of the new areas that Cisco working in these days. Cisco has very good opportunity to have very good market share and profit through their new products. Ability of expand Cisco’s business in vertical and horizontal is one of Cisco’s biggest opportunities. Cisco already created the need for networking solutions to the world. They can continue on that way. They have the opportunity to introduce a complete network solution, with all the network equipments and software that need. Cisco has the ability to offer a much wider range of products since they have already acquired lot of network equipment companies. Cisco also can involve in data mining. The amount of data in the world is exploding. As more data becomes available, the ability to handle them in fast and efficient manner is so much important. Therefore Cisco can use do research work on how to use their network infrastructure to utilize that. Demand for the Cloud Computing is another opportunity. Since it is relatively new dimension and not that much competitors in that arena Cisco can play a big role in that segment. Wi-Fi Home Calling Mobile phones, Mobile Broadband are some other areas where Cisco has opportunities to increase their current market share as well as to capture new market segments. Threats Though Cisco dominates the router market, if they does not consider about the competitors they may lose the market, because small companies can take over a specific niche market. Keep implementing many changes to the Cisco e-business infrastructure is another treat. Employees, suppliers take considerable time period to get use to the new systems. Therefore if changes are happening quite often then people may get fed up with those changes since they have to adopt their work according to the new systems. Cisco’s high dependability on their suppliers is another treat. If one or many suppliers get refuse to supply the products due to some reasons then Cisco can’t deal with the demand, since more than 90% of the orders are directly fulfill by the suppliers without intervention of Cisco. Some other treats are †¢Cost of managing highly interconnected complex systems, software systems and managing customer centers/call centers is very much high. †¢Separate partnerships for borderless networking, data center and virtualization and collaboration can leads to disputation. †¢Since Cisco doesn’t sell directly to end customer, they cannot contact Cisco directly. This may leads to customer dissatisfaction. Recommendations Cisco is highly depend on their e-business strategies that are been implemented since last two decades. Those initiatives lead Cisco towards being the giant in internetworking industry. Company has automated almost all their processes with the help of IT. This is very effective and efficient in terms of time saving and cost reduction but on the other hand Cisco will be in trouble, if some issues occur in their systems. Therefore they should have alternative methods to continue their businesses even in that kind of scenario. In general it is very hard to think of alternatives when everything works smoothly enough with the power of IT, but with the rapid growth of security vulnerabilities in the internet, it is always nice to have at least a single way to continue the business processes without getting affect by those vulnerabilities. In 2001 Cisco’s stock price collapse dramatically. They lost nearly $400 billion in market value. There was lot of arguments about the company’s management, and of the inability of its information systems to anticipate and respond more effectively. An information system is only as good as the data entered into it, and if the people gathering the information fail to pick up on market signals or are unwilling to be the bearers of bad news, then the system won’t provide the warning signs that might mitigate the impacts of a major market shift. Therefore Cisco must implement a way to respond to the market changes very quickly, unless they may lose their market. Cisco’s competitors such as 3Com, AT&T provide interfaces to connect their equipments with the 3rd party vendors. But some of the Cisco equipments can’t connect like that with the 3rd party vendors. This is a drawback for them. There is a possibility of consumers may turn to some other tools due to that. Therefore Cisco should provide the facility to their equipments to interface with other vendorâ €™s. Another thing that Cisco can do is provide facility to directly communicate with Tellab’s devices. At the moment Cisco nodes can’t directly communicate with Tellab’s nodes without in-between bridge because auto generate magic numbers aren’t matching. Consumers need to have a more than average networking and technical knowledge in order to implement Cisco systems, unlike other vendors’ network equipments. Consumers who are not having appropriate knowledge about the implementation and maintenance should get help from others when they are dealing with Cisco products. This may leads consumers to go for other vendors who are producing products which can be use much easier than Cisco products. Therefore Cisco must provide easy configurations for their products or they should assist their consumers free of charge in those incidents. Then Cisco can retain their existing customers and customers will not get frustrated when working with their products. One of the main concerns is that Cisco doesn’t sell their products directly to the home users. If a home user wants to buy a Cisco product he/she must contact a Cisco partner and get the product through that partner. This should be changed. Cisco must provide all direct buying facility to all of its’ consumers, not only for the B2B consumers. Cisco can enhance their online presence in order to serve home consumers so they can directly buy Cisco products through their website. Cisco can get more sales by direct sales to home consumers since direct sales leads Cisco to promote their new products to those consumers through online marketing and promotion campaigns. They can also motivate their sales partners to attract more consumers by providing special discounts schemas for partners who are bringing more sales to the company. If we consider about Cisco’s website it has some issues in search facility. Most users are unable to search what they want through the provid ed search functionality in the website. Cisco should carefully study about what users really searching for in their website. Then company should upgrade or rework on their search functionality so user can experience more accurate search results. Cisco doesn’t provide support for the products that they no longer produce. They only provide support until after 1 year they stop the production. In networks 1 year old equipment is almost like a new product. Normally standard network equipment can be use for about 3 – 5 years. Therefore consumers who are having relatively new products can’t get Cisco support when they are having issues in their products. Sometimes Cisco completely stops support for some business units. Then consumers who are belongs to that unit will not get any patches, updates or technical assistance. If Cisco can provide patches, updates and technical assistance to all their products without eliminating any products or business units that would make consumers to believe that they are always look after by Cisco. Therefore consumers’ perception about the company will grow. Another major issue with Cisco products is that existing Cisco products can’t be upgrade easily. Consumers have to consider about various factors when they want to upgrade their existing equipments. They can’t easily replace existing node with another node. If they do so whole system can get affected due to compatibility issues. Most of the times if a network consist of Cisco equipments and there is an issue in single point it simply can’t be replaced by another same type product from another vendor. Users always have to replace it by a Cisco product. It is true that it brings sales to Cisco but on the other hand users may get fed up. Sometimes users may want to replace some nodes with some other vendors’ products due to some reasons. Therefore Cisco must think about that kind of incidents and provide necessary solutions. Cisco always tries to go with their proprietary protocols rather than open standards. This leads collision in communication between thei r products and other products. Since Cisco is not the one and only player in the network industry, Cisco should provide their consumers the facility to connect Cisco equipments with any other products without compatibility issues. This can be achieved by in lining Cisco products with open standards. The alternative to the current decentralized system was some sort of centralized organization that focused on innovation. But there were any number of ways in which the charter of this new organization could be configured. What specific activities would it be responsible for? Who would staff it? How would it be funded? How would it be evaluated? Could it be configured in such a way that efficiencies and elusive â€Å"white space† opportunities were captured without destroying the innovative spirit at Cisco or its decentralized culture? Losing either could outweigh any benefits of centralization. Cisco can consider about a Technology Research and Training Team that can study about emerging technologies and keeps business managers informed of what would soon be possible.

The Art of Jihad Documentary - 1598 Words

Name: Ossama El Garhy ID: 900113710 Section: 19 Date: 1/11/2011 â€Å"The Art of Jihad† Documentaries have a huge impact on one’s thoughts and beliefs. The Art of Jihad is one of the most interesting documentaries I have ever seen. It is about three American artists discussing the stereotypes about Islam especially in USA, and how they try to reveal the actual meaning of Islam through their works. Non-Muslim people, especially non-Arabs, do not know the real meaning of Islam. These people always misjudge Muslims and think that Islam tells us not to be peaceful. This happens because of the corrupted media as it displays the wrong stereotypes of Islam. But after watching this documentary I found out that there are still some educated†¦show more content†¦He displays a Muslim taxi driver, †Mahmoud†, who argues about the fact that they made him a taxi driver, and says that they displayed him as a taxi driver because he is Muslim. Sandow uses the character â€Å"Mahmoud† to combat the stereotype that Muslims are poor and ignorant. Mahmoud a lso says that prophet Muhammad is a good guy just like Jesus, and they should not misjudge him. This brings us to the main purpose of this film; Sandow made this film to tell people that prophet Muhammad is not the evil or ignorant person who was depicted by Dante’ 400 years ago. So this film was to clarify the real personality of prophet Muhammad and his message. And to combat the bad stereotypes of Islam displayed by Dante’ years ago. He purposely chose not to show Muslims wearing any traditional clothes or outfits in order to show that Muslims are not ignorant and savages, and they do not live in the dessert and ride camels, but they are just like any other person living in the western society. Therefore, Sandow uses his works in media to try to combat this stereotype about Muslims. Also El Dajani focuses on that part and thus, he shows a part from â€Å"Dante’s Inferno† in his documentary to catch people’s attention in this part. Also this coul d change in children’s perceptions. Because children always watch cartoons, and this film was a graphical film. So children might watch something like this graphical film, which will affect their perceptions about Islam. So I thinkShow MoreRelatedGp Essay Mainpoints24643 Words   |  99 PagesScience/Tech a. Science and Ethics b. Government and scientist role in science c. Rely too much on technology? d. Nuclear technology e. Genetic modification f. Right tech for wrong reasons 3. Arts/Culture a. Arts have a future in Singapore? b. Why pursue Arts? c. Arts and technology d. Uniquely Singapore: Culture 4. Environment a. Developed vs. Developing b. Should environment be saved at all costs c. Are we doing enough to save the environment? d. Main reasonsRead MoreOne Significant Change That Has Occurred in the World Between 1900 and 2005. Explain the Impact This Change Has Made on Our Lives and Why It Is an Important Change.163893 Words   |  656 Pagesopportunities available to them at different times and in diverse settings. She places special emphasis on the important but often overlooked roles they played in politics, particularly those associated with resistance movements, and their contributions to arts and letters worldwide. Drawing on the essay collections and series on women in world history that she has edited over the past decade, Smith’s fully global perspectives make clear that even though gender parity has rarely been attained in any society

It’S Easy Being Green. People And Especially Scientists

It’s Easy Being Green People and especially scientists are worried that if America continues to allow garbage, plastic, pollution, and waste into the environment, that would result to a lot of problems and troubles in the future concerning the ecosystem and nature across the world. This originally was recognized as a problem when people around the world have found a large garbage island right in the middle of the pacific ocean. These are just what they sound like, a large area of plastic, waste, and other garbage floating around. These are created by lost cargo from ships or debris from various things. Our lazy and selfish ways will lead to disasters in animal population and the healthiness and robust to†¦show more content†¦Remissive recycling contributes to this problem, too. Researchers have found dozens of recyclable objects like aluminium, plastic bottles, newspapers, cardboard, and steel cans in landfills, which could have been prevented if those people took one more second to throw their unwanted things in the proper place. Another source from lasvegassun.com showed that The American Lung Association states, â€Å"the â€Å"State of the Air† report, released today, gave Las Vegas-Henderson a failing grade and ranked it as the 10th worst among 277 metropolitan areas in the country for ozone pollution.† (Taylor, Pg. 1) Why is Las Vegas known to be one of the most polluted areas? Due to the . These problems can lead to adults, teenagers, and even toddlers are at risk to obtaining lung diseases, asthma, or heart diseases. Many fears and concerns that are really concentrated for garbage and plastic is the the ocean water. It is shown that thousands of garbage and plastic have been found in the middle of the ocean. And that it is causing decreasing numbers in the marine population. The article (For Ocean Animals, ‘Death By Plastic’ Could Be Occurring More Frequently) said that â€Å"The whale discovered in the Netherlands is only the fifth whale confirmed to have died from ingesting plastic. This might be because some are able to process it better than others, or there could be more that never made it to shore and therefore couldn’t be reliably counted.Show MoreRelatedObesity : The Average Percent Of People Getting Obese1646 Words   |  7 PagesThe average percent of people getting obese is increasing daily. Jay Zagorsky, a scientist at Ohio State University writes that the rate of obesity in USA increased from 13% in the 1960s to 35% (Vanderkam). The people who are getting obese are different genders, but Jay Zagorsky stated that women who receives public assistance have a higher possibility of getting obese than who don’t (Vanderkam). 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Is it the people of earth or is it just the natural change in climate as the world ages? People claim that it’s just a natural change in climate, that the people have only a little influence on the climate. Others say that we the people are the cause for the dramatic change in climate with the greenhouse gases we emit into the atmosphere. Global warming is indeed real andRead MoreMcgraw Hill Companies, Inc.1325 Words   |  6 Pagescompany’s vision declaration, its intention is to â€Å"unlock the full potential of each learner.† Because the learning methods and styles are extremely important to be tailored individually, the company’s main efforts are based on making this process easy, accessible, and convenient as much as possible. The action of digitalizing the learning tools and services supported by online sources, are the best ways of attracting l earners, and make their educational lives easier. 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