Harvard Case - Cisco India (A): Innovation in Emerging Markets
"Cisco India (A): Innovation in Emerging Markets" Harvard business case study is written by Srivardhini K. Jha, Rishikesha Krishnan, Charles Dhanaraj, Ivy Buche. It deals with the challenges in the field of Strategy. The case study is 12 page(s) long and it was first published on : Nov 21, 2016
At Fern Fort University, we recommend Cisco India adopt a multi-pronged strategy focused on disruptive innovation and strategic partnerships to capitalize on the immense potential of the Indian market. This strategy involves leveraging Cisco's core competencies in networking, security, and collaboration, while simultaneously exploring new business models and digital transformation opportunities.
2. Background
Cisco India, a subsidiary of the global networking giant Cisco Systems, faces the challenge of maintaining its market leadership in a rapidly evolving Indian market. The case study highlights the growing competition from local players and the need for Cisco to adapt its strategy to cater to the unique needs of the Indian market.
The main protagonists of the case are:
- Cisco India: The subsidiary struggling to maintain its market leadership in a rapidly changing landscape.
- Local players: Emerging Indian companies offering competitive solutions at lower prices.
- Government: Playing a crucial role in shaping the digital landscape through policy and regulation.
3. Analysis of the Case Study
We can analyze Cisco India's situation using a combination of frameworks:
A. Porter's Five Forces:
- Threat of new entrants: High, due to the low barriers to entry in the Indian market.
- Bargaining power of buyers: High, as customers have access to a wide range of competitive solutions.
- Bargaining power of suppliers: Moderate, as Cisco relies on a global supply chain.
- Threat of substitute products: High, as alternative technologies like software-defined networking (SDN) are gaining traction.
- Competitive rivalry: Intense, with local players offering aggressive pricing and tailored solutions.
B. SWOT Analysis:
Strengths:
- Strong brand reputation and global expertise in networking.
- Established customer base and partnerships.
- Strong R&D capabilities and innovation culture.
Weaknesses:
- High cost structure compared to local competitors.
- Limited understanding of the unique needs of the Indian market.
- Lack of agility in adapting to rapid technological advancements.
Opportunities:
- Growing demand for digital services and infrastructure in India.
- Government initiatives promoting digital inclusion and smart cities.
- Potential for partnerships with local players and startups.
Threats:
- Increasing competition from local players with lower pricing.
- Rapid technological advancements and emergence of new technologies.
- Changing customer preferences and evolving market dynamics.
C. Value Chain Analysis:
Cisco India's value chain can be analyzed by identifying key activities:
- Inbound logistics: Sourcing components and materials from global suppliers.
- Operations: Manufacturing and assembling networking equipment.
- Outbound logistics: Distributing products to customers and partners.
- Marketing and sales: Promoting products and services to target segments.
- Customer service: Providing technical support and maintenance.
D. Business Model Innovation:
Cisco India needs to explore new business models to address the changing market dynamics:
- Subscription-based models: Offering services like cloud-managed networking and security.
- Partnerships with local startups: Leveraging their expertise in specific sectors.
- Developing tailored solutions: Addressing the specific needs of the Indian market.
4. Recommendations
To navigate the complex landscape of the Indian market, Cisco India should adopt the following recommendations:
1. Disruptive Innovation:
- Develop low-cost solutions: Offer affordable networking products and services tailored to the Indian market.
- Focus on emerging technologies: Invest in research and development of solutions like SDN, AI, and IoT.
- Embrace open-source technologies: Collaborate with open-source communities and contribute to open-source projects.
2. Strategic Partnerships:
- Partner with local startups: Collaborate with Indian companies specializing in specific sectors like agriculture, healthcare, and education.
- Joint ventures with local players: Leverage their market knowledge and distribution channels.
- Develop a strong ecosystem: Create a network of partners, developers, and customers to foster innovation.
3. Digital Transformation Strategy:
- Embrace cloud computing: Offer cloud-based networking solutions to cater to the growing demand for cloud services.
- Invest in data analytics: Leverage data insights to understand customer needs and optimize operations.
- Develop a digital marketing strategy: Utilize social media and online platforms to reach target audiences.
4. Corporate Social Responsibility:
- Support digital literacy initiatives: Partner with NGOs and educational institutions to promote digital inclusion.
- Invest in sustainable practices: Implement environmentally friendly manufacturing processes and reduce carbon footprint.
- Contribute to community development: Support local initiatives and empower underprivileged communities.
5. Basis of Recommendations
These recommendations are based on:
- Core competencies and consistency with mission: Leveraging Cisco's expertise in networking and innovation to address the unique needs of the Indian market.
- External customers and internal clients: Catering to the diverse needs of customers in the Indian market, while empowering employees with new skills and opportunities.
- Competitors: Identifying and analyzing the competitive landscape to develop a differentiated value proposition.
- Attractiveness: Focusing on high-growth segments and leveraging the potential of the Indian market.
6. Conclusion
By embracing disruptive innovation, strategic partnerships, and digital transformation, Cisco India can navigate the challenges of the Indian market and achieve sustainable growth. This strategy will enable Cisco to maintain its leadership position while contributing to the digital development of India.
7. Discussion
Other alternatives not selected include:
- Mergers and acquisitions: Acquiring local players to gain market share and access to local expertise. However, this strategy carries significant risks and integration challenges.
- Cost leadership: Focusing solely on price competition, which could undermine Cisco's brand reputation and innovation capabilities.
Key assumptions:
- The Indian market will continue to grow at a rapid pace.
- Government policies will continue to support digital development.
- Cisco can successfully adapt its products and services to the Indian market.
8. Next Steps
To implement these recommendations, Cisco India should take the following steps:
- Establish a dedicated innovation center: Focus on developing disruptive technologies and solutions for the Indian market.
- Develop a strategic partnership program: Identify and cultivate relationships with local startups and businesses.
- Invest in digital transformation initiatives: Implement cloud-based solutions, data analytics, and digital marketing strategies.
- Develop a comprehensive CSR program: Support digital literacy, environmental sustainability, and community development initiatives.
By taking these steps, Cisco India can position itself for success in the dynamic and growing Indian market.
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Case Description
Case A describes the challenges a multinational corporation, Cisco Systems Inc., faces in an emerging market in developing new products specific to local needs. Dr Ishwardutt Parulkar and his team at Cisco's Indian subsidiary in Bangalore had identified a promising concept that could potentially become the company's first product developed end-to-end at the India site. They had to address three critical issues: How to define the right product to address the specific needs of telecom network customers in the emerging market? How to build the business case for approval from the headquarters in the US? How to compensate for the significant gaps in the Indian ecosystem that was not fully mature in terms of partners and skills required to develop such a product? Case B presents how the Cisco team resolved the new product development challenges. The success of the new Advanced Services Router (ASR) 901 would mark a milestone in Cisco's journey of evolution of engineering capability in emerging countries into the next phase of innovation and thought leadership. Learning objectives: 1) Identify key challenges in developing a mainstream product from concept to completion in an emerging market. 2) Understand essential factors for building subsidiary R&D capabilities for mainstream product development. 3) Introduce the Technology Champion framework, which serves to bring out innovation aspirations in a subsidiary R&D team.
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