CISCO System:

Managing the Go-to-Market Evolution

Group 1 (B)
Chintan Ameet Mehta PGP16005
Zoya Khan PGP16019
Chandan Saxena PGP16022
S. Lianbiaklal PGP16023
Raikoti Srinivas Prasad PGP16024
Rahul Prakash Ghimiray PGP16027
Hitesh Rawat PGP16032
CISCO
Known as the leader for switches and router market with $500 billion market
capitalization in 2000
Focus on Core competencies: product design and development
Indirect sales and distributors reseller are the used product delivery
Agglomerated nearly 75 firms
Setback by the dot come burst revamp their strategy
Revisited their route-to-market strategy and evolutionized the go-to-market
strategy
Situation Analysis (Route to Market)
Channel Sales Contribution Customer
1 Direct Approximately 10% All
2 System Houses. Eg. 25% to 30% Corporates
IBM, HP, Accenture
3 Telecommunications. 25 % to 30% Carriers
Eg. SBC
4 Value-Added Reseller 30% to 35% Enterprise of
midlevel to small
business

5 Direct Marketing Less than 10% Dispersed small

Reseller. Eg. CDW customers who
requires standardized
products,
6 Retailer Less than 10% Home networking
Figure B
 10000 worldwide sales- and field marketing organization had 4500
customer account managers, 4500 sales engineers and 1000 channel
account managers.
50% of the sales force was in North America
10000 salespeople were responsible directly or indirectly for using the
channels (previous slide)
For direct orders, they both generate and fulfill customers orders
Channel 2,3,4,5 are collaborated closely with the channel partners
Demand generation was done by account managers and system engineers
using a high-touch by either: named list of accounts or territory-based
structure
Channel account managers take cares of the channel organization and
focused on the VAR channels
Market and Competitors
3 Markets:
Corecorporate networking gear market: sold both
enterprise account and SMB
Telecommunications services providers
Consumer markets
Core corporate networking gear market:

Undisputedmarket leader with $20 billion with

70% shares in the Enterprise and 40% in the SMB
segments
Known for technology leadership and product
reliability
SMBcompetitors: HP, Nortel, 3Com, Huawei
Technology
Telecommunications services providers
Only
5% share of $50 billion telecommunications service
markets
25% share of the narrow
$2 -3$ billion top end of the market
Competition is aggressive
Competitors: Nortel, Juniper(30% share), Siemen, Alcatel and
Lucent
Consumer markets
Double
sales to $800 million doubling since acquiring
Linskys
Market leader with 40% share
Aggressive competition from NETGEAR and D-Link
Channel Reengineering
ACTIONS BEFORE DOT COM BURST AFTER DOT COM BURST

Approach Volume based Value based

Number of resellers 6000 3000

CCIEs requirements Revenue $10m per one Revenue $40 m per one

Incentives Units sales volume Specialization, customer

relationship, expertise

Customer Emphasis Just deal with hardware after-sales services

offered
 VoIP Telephony
Ciscos IP Telephony is to target the internet phone system market, which is
expected to grow from$3.5 billion to $10.5 billion by 2008
IP telephony solutions used a single network infrastructure to transmit voice, data
and video communications
Cisco offers suite of products within IP telephony: infrastructure, IP, Cisco Call
Manger and voice applications
Introduced the Voice telephony(VT); an IP based video telephony system that
allowed user to create instant face-to-face video call
Competitors: Avaya, Nortel and Siemens
The demand for VoIP telephony would increase due to cost advantages and high
channel margins
benefits
>Market opportunity <Competitor has
to tap the IP system advantage of
market relationships with
>delivered huge cost existing voice
advantages channles
>demand pulled by
end users <Companies preferred
>single network for Avaya and Nortel
voice, data, video

threads
 Recommendations
Increment the value incentive for the channel partners
Maintenance each level of the pyramid with an appropriate sales
volume
Online channel or internet channel for reaching small customers
Inclusion of VoIP in the product portfolio through Data VARs
Introduction of Certified Voice Telephony services as a criteria to
qualify for Gold/Silver status
CCIEs support of the SMB