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Cisco Systems is a corporation that provides networking hardware and telecommunications equipment. The company plans to develop and expand by entering “the Internet of Everything”. In order to do that successfully, the company will need to choose what domains it needs to invest and how it has to be done. The company’s strategic objective is to advance and support “the Internet of Everything”.
Cisco Systems is a corporation that sells networking hardware and telecommunications equipment. The primary areas the company focuses on include cybersecurity, switching, routing, wireless LAN, and others (Piskorski, Malter, & Smith, 2014). The company’s social strategy is based on certifications that are issued to those employees who are qualified enough to pass a specific set of tests. In order to increase the number of certified employees, the company launched the Cisco Learning Network, where employees can communicate and prepare together for a certification test.
Since the company plans to transform its services and re-skill the employees to successfully enter the “Internet of Everything” era, the general manager for [email protected] Systems, Jeanne Beliveau-Dunn, considered two options how the learning system could be transformed: either employee would be required to post information concerning the new certifications and other important materials for the study or the corporation “would still develop the certifications, but it would refrain from significant investments in content” (Piskorski et al., 2014, p. 1). The main issue is that the company has to choose only one approach, which will be more effective. To understand which of the approaches is more suitable, the strategic management will be considered as a basis for the solution.
The issue discovered in the case study is the following: which of the two approaches would be more suitable for the company and how it could be implemented using the approaches of strategic management? The problem is that the company has a specific framework of how certifications are issued and how students prepare for those, but to enter the “Internet of Everything” era, the company will need skilled workers who can efficiently work with and control the complex networks required for IoE. Furthermore, the company has to choose one of the approaches quickly so that its competitors are not able to begin preparations before Cisco makes any decision. The issue is important because the new skilled workforce will directly influence Cisco’s profitability from the IoE, align with Cisco’s direction to become a supporter of the IoE, increase its competitive advantage in the market (especially compared to those corporations that have not yet begun the preparations), enhance the relationships between employees (if implemented correctly), and improve customers’ satisfaction with their skills and knowledge.
Analyzing the Data
One of the main capabilities important for a company in strategic management is the ability to remain competitive by combining, protecting, or reconfiguring business if necessary (Killen, Jugdev, Drouin, & Petit, 2012). If the company plans to reconfigure its business, it also has to pay attention to competitors’ actions. For example, Piskorski et al. (2014) state that Cisco’s competitors also launched similar learning networks and technical certification programs. In order to increase the company’s competitive advantage, Cisco has to evaluate which of the two approaches will be difficult to copy.
The main issue for the company is reconfiguration. It arose because the IoE is a new approach towards the Internet that will change the relationships between networks and users. Cisco sees this opportunity, but to exploit it, the company has to develop new technologies and train almost all of its IT workers. The most affected parts are, therefore, the company itself, its employees, and the partners. The constraints of this situation are the following: employees might not want to invest in certification, the partners might refuse to support the reconfiguration, and the company might not operate efficiently to make the transition successful. The opportunities are to become one of the main companies involved in the IoE, gain more partners and customers with skilled employees and new types of networking systems, and increase the company’s competitive advantage in the market.
There are four possible alternatives for the company. The first two were presented in the case study. The company can engage employees who will be responsible for all the required information about the new networks or the company will not invest much in the content but rather develop social networking tools that will allow the community to provide help to the members and explain the materials if needed (Piskorski et al., 2014). The next alternative is to establish the Cisco Networking Academies as it was already done before and train the employees via those academies. The last alternative is to postpone the reconstruction of the business since it will be a costly and long-term process that has the potential to lead to severe losses. The last alternative does not align with the company’s strategic objective, but it takes the necessary expenditures into consideration, as well as the risk of the business reconfiguration.
The challenge of strategic management is that the company has to create value in the present, whereas it also has to provide “a platform for future value creation” (Fitzroy, Hulbert, Ghobadian, & O’Shannassy, 2012, p. 9). Therefore, the decision criteria will focus on the company’s ability to generate value both in the present and in the future.
- The company generates value
- Employees’ development
- Foundation for future value creation
- Requires additional investment
- Does not require additional investment
- Aligns with the company’s strategic objective
- Increases competitive advantage
- Responds to change
Analysis and Evaluation
|Generates value||Empl. development||Future value creation||Additional investment||No add. investment||Strategic objective||Comp. advantage||Responds to change|
|Investing in content||Yes||Yes||Yes||Yes||No||Yes||Yes||Yes|
|Investing in social tools||Yes||Yes||Yes||Yes||No||Yes||Yes||Yes|
As is can be seen, the first three approaches are more suitable for the company rather than the fourth one. Nevertheless, the advantage of the fourth one is that is not as costly and risky as the other approaches. At the same time, the most expensive choice is to create CNAs for re-skilled employees; this will require additional investment from partners that might not be supported. However, it is also a thorough approach to employees’ education that will possibly generate more value in the future. The difference between the first and the second approach is that the first one is more focused on content and less on communication between employees, while the second one provides employees with the ability to generate, create, and share content, as well as communicate with each other. According to the vice president of the company, expanding the community means becoming partners with different communities to generate content (Piskorski et al., 2014). Other communities can provide more materials and insights rather than updates of the existing content, which is why the investment in social networking appears to be more efficient if the company wants to achieve its strategic goal. Some of the content provided by the community might be more valuable than that created by the company since its knowledge is also limited.
Why This Alternative?
One of the primary goals of strategic management is to empower employees to take part in decision-making or provide new ideas, opinions, and suggestions (Goetsch & Davis, 2014). Empowerment of employees has the potential to improve the company’s competitive advantage, positively influence employees’ morale, and improve customer satisfaction with the services. The first and third approaches do not include employees’ involvement in the decision-making and development of the company. Furthermore, other communities can provide more crucial information for the company rather than internal resources. Therefore, the investment in social networking tools offers more possibilities for the company than any other option: it empowers employees, provides information from outside parties, and aligns with the company’s strategic objective.
The corporation needs to invest in social networking tools because it has more advantages compared to other alternatives. Investment in social networking tools is less costly than the development of new content for certifications or the establishment of a new academy. The company’s employees will feel more involved in the processes vital to its success. Furthermore, they will also have an opportunity to work independently on a major project. Information provided by the communities will be valuable because it will address other issues that Cisco might not consider. At last, the company also needs to bear in mind that the collaboration between skilled IT professionals will help increase customers’ satisfaction.
Fitzroy, P., Hulbert, J., Ghobadian, A., & O’Shannassy, T. (2012). Strategic management: The challenge of creating value. London, England: Routledge.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: Pearson.
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Killen, C. P., Jugdev, K., Drouin, N., & Petit, Y. (2012). Advancing project and portfolio management research: Applying strategic management theories. International Journal of Project Management, 30(5), 525-538.
Piskorski, M. J., Malter, D., & Smith, A. (2014). Social strategy at Cisco Systems. Harvard Business School Case, 9(714), 1-22.