Jaipuria Institute of Management

Lucknow

- SMGT-

“Cisco Case Study”

Submitted By:
Satyendra Veer Singh [PGDM-09-138]
Prateek Dhawan [PGDM-09-110]
Sukhpreet Inder Singh [PGDM-09-158]
Priyanka Dubey [PGDM-09-117]
Sukumar Baner [PGDM-09-022]
Akriti Mehrotra [PGDM-09-FS-002]
Varun Kumar Dubey [PGDM-09-R-021]
Upinder Singh Nanda [PGDM-09-R-020]
 CISCO CASE STUDY

What do you think Chambers and Cisco could and should have done
differently in 2000 and early 2001? Do you agree or disagree with
Chambers's conclusion that the company had to take the steps it did? Why
or why not?

It was clear the company was suffering from over ordering. Cisco was much
concerned about what there customers were ordering.

The thing went wrong were they overlooked the macroeconomic factors
overshadowing the entire communications industry. They should have noticed that,
"These orders can't be sustained."

It has a very obvious explanation that, facing delay in delivery after ordering, many
customers began ordering from Cisco and also ordering from two or three other
suppliers, causing the backlog to look greatly larger than it actually was. When an
order did arrive, those companies cancelled the other orders, resulting in a sudden,
rapid backlog decline.

Cisco's information systems could not able to account for that situation, and so the
company was misled by the very systems in which it had so much pride.

They knew there were multiple orders but at the same time they should know its
magnitude.

Cisco's forecasting software focused on growth data and ignored such

macroeconomic data as debt levels, economic spending, interest rates, the bank
market, and the stock market. The software was not designed to deal well with
declining demand. Misleading, though accurate, information had resulted in bad
decisions.

They shouldn’t be overconfident after years of remarkable sales growth. They relied
on past rosy sales and never considered the possibility that sales might actually
decline. As management was more concerned about turning away orders than about
whether the orders were real or fake.

In totality Cisco relied too much on its Sales Forecasting system ignoring
human judgment and intuition.

We are completely disagreeing with Chamber’s conclusion stating “Cisco is

suffering because of the sudden and unexpected economic deterioration. He denies
that the company relies exclusively on its software”. He believed that they sales
forecasting system helps them in long way, but it wasn’t been designed to judge the
future sales and growth.

Reason behind such disagreeing is that they ignored the macro economic
environment as they wouldn’t able to identify the real orders; they are much focused
on incoming orders as that resulted in over ordering and the delivery time increasing
from less than 3 weeks to approx. 15 weeks.