Capital Asset Pricing Model and Cisco Essay

Submitted By santicuni
Words: 1598
Pages: 7
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Cisco Systems Inc
Financial Analysis
2014

- December

Santi Cuni

1

Agenda
• Overview
• SWOT Analysis
• Ratio & Financial Statement
• Market’s value and Assumptions
• Conclusion

2

Overview
Cisco is an United States’ company exchanged on NASDAQ’s market in the Technology ‘s
Industries
Cisco designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology (IT) industry.
Cisco delivers networking products and solutions designed to simplify and secure customers’ network infrastructures and help them connect more effectively with their key stakeholders, including their customers, prospects, business partners, suppliers, and employees.
Their products and technologies are grouped into the following categories:
• Switching;
• Next-Generation Network (NGN) Routing;
• Service Provider Video;
• Collaboration;
• Data Center;
• Wireless;
• Security
In addition to their product offerings, they provide a broad range of service offerings, including technical support services and advanced services.
•
•

Technical support services help their customers ensure their products operate efficiently, remain available, and benefit from the most up-to-date system and application software that they have developed.
Advanced services are part of a comprehensive program that is focused on providing responsive, preventive, and consultative support of their technologies for specific networking needs

3

SWOT Analysis...Strenghts
Cisco conducts its business globally and manage its business by geography. Its business is organized into the following three geographic segments:
•
•
•

The Americas
Europe and Middle East, and Africa (EMEA)
Asia Pacific , Japan and China (APJC).

However, Cisco continues to expand and increase its activity in the new emergency markets like BRICM countries (Brazil, Russia, China, and Mexico). In order to keep is leading position in some geography areas and growth in the emergency markets Cisco strategy is based on the three components of innovation, which they sometimes refer to as their “build, buy, and partner” approach.
Acquisitions(buy): They have acquired many companies, and they expect to make future acquisitions Sourcefire and Meraki being two examples, are now growing more quickly within Cisco than when they were as standalone companies.
Investments in Privately Held Companies(build): Cisco makes investments in privately held companies that develop technology or provide services that are complementary to their products or that provide strategic value.
Strategic Alliances(partner): Cisco pursues strategic alliances with other companies in areas where collaboration can produce industry advancement and acceleration of new markets. Their customer base is not limited to any specific industry, geography, or market segment.
In each of the past three fiscal years, no single customer has accounted for 10% or more of their revenue, so a purchases’ reduction from one of its customers does not

4

SWOT Analysis...Weaknesses
.Cisco customers primarily operate in the following markets:
• Enterprise: global organizations, typically employ 1,000 or more.
• Service provider: They include wireline carriers, Internet, cable, and wireless providers. • Commercial: Generally, with fewer than 1,000 employees.
• Public sector: Public sector entities include federal and local governments
Cisco has field sales offices in 94 countries, and it sells its products and services both directly and through a variety of channels with support from their salesforce. A substantial portion of their products and services is sold through their channel partners, systems integrators, service providers, other resellers, and distributors and the remainder is sold through direct sales.
For the distribution’s model described above there are some potential weaknesses for Cisco:
• Some channel partners may demand that Cisco absorbs a greater share of the risks that their
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