Presentation CISCO & HP
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Cisco and HP are major technology companies that compete in several areas including networking, servers, and cloud computing. Cisco was founded in 1984 and has over 72,000 employees, generating $48.6 billion in revenue in 2012. HP was founded earlier in 1939 and is larger with over 330,000 employees and $120 billion in revenue in 2012. Both companies spend billions annually on research and development. While competitors, they have also collaborated on some projects to address joint customer needs. Their rivalry exists in areas like cloud computing and networking switches.
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Presentation CISCO & HP
- 1. Presented by: Abhijat Dhawal Abhishek Gupta Aniket Vaidya Anirudh Prasad 80303120011 80303120017 8030310060 80303120063
- 2. CISCO SYSTEMS - INTRODUCTION • Founded in 1984 • Incorporated on December 10, 1984 • Have 72,935 employees • US$ 48.607 billion revenue in 2012 • Corporate headquarters located in San Jose, California • 32 factories worldwide, 30 of them are outsourced. • Spends nearly $5.8 billion a year in R&D
- 3. HP - INTRODUCTION • Founded in 1939 • Incorporated on January 1, 1939 • Have 331,800 employees • US$ 120.357 billion revenue in 2012 • Corporate headquarters located in Palo Alto, California, United States • Spends nearly $3 billion a year in R&D
- 5. FRIENDS OR FOES? • Bitter data center and networking rivals Cisco and HP collaborated to develop a switch for HP’s blade server systems to address the needs of joint customers. • HP points out that it has a lot of joint customers using HP servers and Cisco switches. • Rivals in • CLOUD Computing. • Networking Business- switches , routers
- 6. HP SWOT STRENGTH 1.Employee strength of 3,50,000 worldwide 2. It has maximum market share in the PC market 3. It’s consumer centric approach makes it a reliable choice 4. It has got good after sales service which helps to maintain good consumer relationship 5. It’s ability to bring out news designs and innovation at affordable cost 6. Good distribution network across the world WEAKNESS 1. Market share growth is slow due to competition; Fake products/ imitations affects sales 2. Due to mass production it is unable to provide customize solutions to the customers 3. Its lagging in digital entertainment market
- 7. OPPORTUNITY 1. With increase in IT awareness the scope for supply of desktops and laptops is increasing 2. It has opportunity for growth in service industry because it has bought “EDS” which is world’s No. 2 service provider THREATS 1. People are becoming more cost conscious so the profit margins have become low so pricing is an issue 2. With increase in number of local players there is threat of component pricing 3. Due to economic downturn, increase competition and saturated market there is slow revenue growth
- 8. CISCO SWOT STRENGTH 1. Geographically Diverse Business 2. Economies of scale lower cost and increases margin 3. Diversified into many segments and tapping sophisticated markets 4. Market leading position brings many benefits 5. Robust financial performance 6. Known for its strong R & D division 7. A culture that experiments produces better long term values WEAKNESS 1.Declining storage networking market 2. Weak presence in BPO technologies/mark ets compared to global leaders
- 9. OPPORTUNITY THREATS 1.Expansion through Strategic Alliances and Acquisitions 2. Smart grid infrastructure could increase demand 3. Wi-Fi Home Calling and mobile broadband 4. Data intensive applications 5. Data Mining 1.The use of cloud servers is lowering sales and especially profits margins for cisco's core business. 2. Open Source Competitors 3. High competitive rivalry 4. Virtualization
- 10. NET INCOME TRENDS CSCO & BENCHMARKS $10,000.00 Net Income (in Millions) $8,000.00 $6,000.00 Cisco $4,000.00 HP Juniper $2,000.00 $2005 Company Name $(2,000.00) 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 CISCO SYSTEMS INC $ 5,741.00 $ 5,580.00 $ 7,333.00 $ 8,052.00 $ 6,134.00 $ 7,767.00 HEWLETT-PACKARD CO $ 2,398.00 $ 6,198.00 $ 7,264.00 $ 8,329.00 $ 7,660.00 $ 8,761.00 JUNIPER NETWORKS INC $ 354.03 $(1,001.44) $ 360.83 $ 511.75 $ 117.00 $ 618.40
- 11. KEY INCOME STATEMENT DATA FY2010 HP Cisco Juniper Sales $ 126,033.00 $ 40,040.00 $ 4,093.27 Cost of Sales $ 92,753.00 $ 12,858.00 $ 1,200.46 Pretax Income $ 11,083.00 $ 9,415.00 $ 778.15 Basic EPS - Excluding Extra Items $ 3.78 $ 1.36 $ 1.18 Diluted EPS Excluding Extra Items $ 3.69 $ 1.33 $ 1.15 Net Income (Loss) $ 8,761.00 $ 7,767.00 $ 618.40
- 12. INVENTORY TURNOVER FY2010 16.000 Inventory Turnover 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0.000 HP Cisco Juniper
- 13. STOCK PRICE – 5 YEAR TREND
- 14. MARKET PLAYERS Competitors that you might see in each technology segment are listed below. This list of competitors is illustrative, not exhaustive. Small Business Medium Business Security Check Point Cisco SonicWALL Tipping Point WatchGuard Technologies Wireless Aruba Networks Cisco D-Link Meru Networks NETGEAR 3Com Alcatel-Lucent Aruba Networks Cisco Switching Cisco D-Link HP ProCurve 3Com Check Point Cisco Juniper Networks Avaya/Nortel 3Com Alcatel-Lucent Cisco Juniper Networks Avaya/Nortel HP ProCurve Meru Networks Avaya/Nortel
- 15. HP The client base is divided into 4 categories: HP Zero clients- Low cost, Business at schools. Hp Smart Zero clients- Simple management by setting up the server. Hp Flexible thin clients- Powerful computing, slim design HP mobile clients- access anything, anywhere at jet speeds. CISCO Active collaboration with TED. Campaign “Tomorrow starts here”- Focus on Layer Technology Augmented Reality. Sports Science- NBA(Basketball) and Tennis. http://www.youtube.com/watch?v=6RblcQLXwHw
- 16. CISCO SMART SERVICES FOR SMALL AND MEDIUM BUSINESS Cisco Smart Services for Small and Medium Business are a portfolio of services for small and medium business customers. This portfolio provides a range of options from resale to jointly delivered services.
- 17. MARKETING TACTICS • Tactics = specific operating plans that detail how a strategy is to be implemented in terms of when and where it is to be put into action.. CISCO • Timing Tactics Historically a first mover supported by being a first mover in technology. They specialize in routers, switches, wireless, s ecurity, optical networking, etc. Cisco is also considered a industry leader. HP • Timing Tactics HP is in Computer business by innovation new products and technology.
- 18. CISCO • Market Location Tactics: Defensive Cisco takes the path of raising structural barriers. They do this to block challenger’s logical avenues of attack. Some factors of Porters they use are: Offering a full line of products in every profitable market segment to close off any entry points. Keep their items reasonably priced for their most popular products and services. HP • Market Location Tactics : Offensive HP has always been known to take a frontal assault. They go head to head with its competition.
- 20. HP MARKET LEADER • HP is the #1 vendor in worldwide server shipments. • HP has a commanding lead in the total blade server market, with a 44.8% revenue share • HP ProLiant is the x86 server market share leader in both factory revenue and units • HP is #1 in Windows® revenue and units worldwide. • HP is #1 in Linux® revenue worldwide.
- 21. CURRENT CORE COMPETENCIES- CISCO Hardware product development Acquisitions - “Buy-the-startups” (Cisco's acquisition strategy is best-in-world and we particularly look for acquisitions that capitalize on market disruption through new technologies and new business models.) Collaboration Services Network Flexibility/Scaling (data center/hardware/software capacities) and virtualization Strategic Alliances (AT&T, Dell, HP, Intel, IBM, Microsoft, Nokia, etc…) Smart-grid technology (form of routing or switching) as noted by CEO John Chambers.
- 22. CURRENT CORE COMPETENCIES- HP • broad portfolio of products and services, • innovation technology • research and development capabilities, • availability of products directly from HP or through HP channel partners.
- 23. DRIVER FOR CORE COMPETENCIES- HP • trust in people & individual responsibility, • decentralization & open communication, • continual employee development and education • joint problem solving & emphasis on team work • entrepreneurial culture • focus on contributions to science, industry &society
- 25. HP/3COM HP ProCurve is often seen as a competitor in situations where the customer: Can tolerate a reasonable degree of network downtime or degradation Sees no value in leading-edge networking and refuses to pay for it HP Sales people position the Cisco warranty as being shorter than the ProCurve Warranty with no cover on software updates. Customers feel that the ProCurve offering consists of products and services that deliver the simple capabilities they need, at a low cost, and that the lifetime warranty is enough for their needs HP might also offer ProCurve Care Packs service offerings to provide support beyond the warranty. The Truth about the Cisco Warranty • Cisco software updates are available on Cisco.com to guest users at no charge • The Cisco warranty duration for Cisco Catalyst 2900 and 3500 Series Switches is a limited lifetime warranty
- 26. STRATEGIES FOR SELLING CISCO SERVICES AGAINST PROCURVE Offer Cisco Smart Foundation service to customers with the basic buyer profile Cisco Smart Foundation provides an affordable support service for customers whose networks are important, but network support is not mission critical Offering this service will create an even playing field with the HP ProCurve lifetime warranty at a reasonable cost and provide more comprehensive support than the ProCurve warranty alone Smartnet Service is a great fit for coverage of core and data center solutions and provides a compelling offer over the HP ProCurve’s Care Packs in service delivery capabilities Propose Cisco Smart Foundation to create parity between Cisco and the HP ProCurve warranty. Offer a multiyear Cisco Smart Foundation Service agreement to create an even more attractive offer with as much as a 40 percent discount for a five-year contract.
- 27. STRATEGIES FOR SELLING AGAINST THE COMPETITION Identify your customer’s buyer profile. Offer the appropriate service for your customer’s buyer profile. Take the high road – don’t bash the competition. Solve business challenges by offering solutions. Keep the focus on the customer and solving their problem, not selling and convincing them of the rightness of a given capability over another or arguing about price. Learn about the Cisco Smart Services for Small and Medium Business portfolio and sell the value of Cisco Services. Emphasize Cisco’s industry leadership and financial stability. Address competitive issues upfront. Be confident and challenge the customer to critically examine comparable competitive offerings. Take advantage of Cisco’s resources for partners. Cisco offers training resources, incentives, progr ams, and tools to help you build or expand a service practice or sell services more effectively.
- 29. IMPACT ON PRESS RELEASE Different core competence Threat from competitor
- 30. CISCO Issues: Lack of awareness of the names or categories of products it sells Non-technical people making buying decisions Focus more on technology Strategies Fun offerings using interactive games, videos and virtual events Benefits vs technology Innovation in case studies One-to-one launch
- 31. HEWLETT PACKARD Innovation in new programs and business model for its channel partners $1.5 billion worldwide in channel programs to reward performance The company rationalized and simplified sales and technical certifications in PartnerOne program. HP also extended partner programs to increase cloud opportunities for resellers, service providers and independent software vendors (ISVs) under its CloudSystem Ready Program Additional focus on demand and simplicity in partner engagement
- 32. GOALS CONTINUED • • Reduce energy consumption and cost • Power management • Tracking and reporting • Infrastructure consolidation Comply with government directives • Recycling • Use end-of-life programs that reduce the overall impact of the environment • These end-of-life programs are designed to reuse or harvest the material commodities contained in the equipment collected and return those materials to the market where they are made into new products • Create competitive differentiation • Virtual worker • Remote collaboration • Resource virtualization
- 33. FUTURE OUTLOOK Utilize technologies such as unified communication and telepresence Technology architecture approach to enable gains • market share • sustainable competitive advantage • greater share of customer It budget Strategy • identify, invest and position to capture customer- driven market transitions • constant innovation enable building, buying and collaborating with partners who also improve productivity and quality • differentiated market approach to tie together technology business architectures • cross functional teamwork and initiatives to drive executive across products value- added services customer segments and geographic
- 34. ANY QUESTIONS?