Business Analysis of Cisco Systems

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Cisco Systems

CISCO SYSTEMS

Business Overview

Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP) based networking and other products related to the communications and information technology industry worldwide. It provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points, and servers; and next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice, and video applications. The company also offers service provider video infrastructure, including set-top boxes, cable/telecommunications access products, and cable modems; and video software and solutions. In addition, it provides collaboration products comprising unified communications products, conferencing products, collaboration endpoints, and business messaging products; data center products, such as blade and rack servers, modular servers, fabric interconnects, software, and server access virtualization solutions; security products, including network and data center security, advanced threat protection, Web and email security, access and policy, unified threat management, and advisory, integration, and managed services; and other products, such as emerging technologies and other networking products. Further, the company offers wireless products consisting of wireless access points; network managed services; and standalone, switch-converged, and cloud managed solutions. Additionally, it provides technical support services and advanced services. The company serves businesses of various sizes, public institutions, governments, and communications service providers. Cisco Systems, Inc. sells its products directly, as well as through channel partners, such as systems integrators, service providers, other resellers, and distributors. The company was founded in 1984 and is headquartered in San Jose, California.

Cisco Systems

Cisco Systems


R&P Rank: 55
Sector: Technology
Industry:Networking Equipment and Services
H.Q Location:California
Website: www.cisco.com
Company Address:
170 WEST TASMAN DR, SAN JOSE CA 95134-1706
Ph:408-526-4000

Business Analysis of Cisco Systems

The Technology Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Cisco Systems compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Cisco Systems to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Cisco Systems with an interactive chart.

  1. Revenue Growth: Cisco Systems reported a revenue growth of 0.2% year-on-year during 2016. Networking Equipment and Services Industry grew at 3.1% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Cisco Systems spent 37.1% of its total revenues on COGS. Networking Equipment and Services industry average (COGS share of revenue) in the same period was 42.8%
  3. R&D share of Revenues: As a percentage of revenue, Cisco Systems spent 12.8% of its total revenues on R&D. Networking Equipment and Services industry average R&D spending in the same period was 13.9%
  4. SG&A share of Revenues: As a percentage of revenue, Cisco Systems spent 23.2% of its total revenues on Sales, Marketing, and General Administration (SG&A). Networking Equipment and Services industry average SG&A spending in the same period was 23.3%
  5. Inventory share of Revenues: As a percentage of revenue, Cisco Systems spent 2.5% of its total revenues on Inventories. Networking Equipment and Services industry average Inventory spending in the same period was 5.0%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Cisco Systems invested 2.1% of its total revenues on Accounts Payable (A/P) Networking Equipment and Services industry average Accounts Payable investment in the same period was 4.9%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Cisco Systems invested 29.0% of its total revenues on Accounts Receivable (A/R). Networking Equipment and Services industry average Accounts Receivable investment in the same period was 25.7%
  8. PP&E share of Revenues: As a percentage of revenue, Cisco Systems invested 7.1% of its total revenues on Property, Plants, and Equipments (PP&E). Networking Equipment and Services industry average PPE investment in the same period was 9.4%
  9. Intangibles share of Revenues: As a percentage of revenue, Cisco Systems invested 59.1% of its total revenues on Intangibles. Networking Equipment and Services industry average Intangibles investment in the same period was 48.3%
  10. Net Margins: Cisco Systems Net Margins in the year 2016 were 21.8%. Networking Equipment and Services industry average Net Margins in the same period were 14.4%

Sector and Industry Association of Cisco Systems

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Cisco Systems is associated with Technology Sector and Networking Equipment and Services Industry.

Technology sector is comprised of the following industries: Computers Systems and Peripherals; Software; Semiconductor; IT Consulting and Outsourcing Services; Networking Equipment and Services; Internet; Other. The definitions for each of the industries is as follows:

  • Computers Systems and Peripherals industry includes companies primarily engaged in manufacturing of personal computers, servers, mainframes, workstations, and other computer accessories and peripherals such as storage drives, mice, keyboards and printers. It also includes manufacturers of mobile phones and tablets.
  • Software industry includes businesses providing software products such as operating systems, productivity suites, enterprise software, data and analysis software, advertising and marketing software, engineering and manufacturing software, networking software, and IT management software. It also includes companies providing industry-specific software focused on different sectors such as Financials, Automotive, Telecom, Utilities, Travel, Real Estate, Media, and Publishing.
  • Semiconductor industry includes companies primarily engaged in manufacturing and distribution of semiconductor products such as microprocessors, chipsets, motherboards, flash memory, and wired and wireless connectivity products. It also includes companies that provide semiconductor equipment and services to the semiconductor industry.
  • IT Consulting and Outsourcing Services industry includes companies primarily engaged in providing information technology consulting and outsourcing services to other businesses. The services include IT consulting, systems integration, application development and management, IT infrastructure management, and network operations management.
  • Networking Equipment and Services industry includes companies primarily engaged in manufacturing and distribution of networking and communications equipment for transporting data, voice, and video traffic across intranets, extranets, and the Internet. The key products include routers and switches for local and wide-area networks, cable modems, teleconferencing equipment, and wireless access points.
  • Internet industry includes Internet-based businesses providing products and services such as search engines, social networking, web hosting, email, domain name registration, and eCommerce. It also includes industry information/services portals focused on different sectors such as Financials, Automotive, Travel, Health, Real Estate, Media, and Publishing.
  • Other industry includes companies providing products such as photocopiers, fax machines, point of sale machines, audio/video technologies, and video games. It also includes technology companies that are not part of other six technology industries.

Industry Ranking of Cisco Systems

With $49.2 billion revenues, Cisco Systems ranked number 1 of all the companies in the US Networking Equipment and Services industry. There were a total of 30 public companies in the US Networking Equipment and Services industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Networking Equipment and Services industry by revenues during 2016 were:

  1. Cisco Systems ($49.2 billion)
  2. Juniper Networks ($5 billion)
  3. Garmin ($3 billion)
  4. Ciena ($2.6 billion)
  5. Brocade Communications Systems ($2.3 billion)
  6. Fitbit ($2.2 billion)
  7. HC2 Holdings ($1.6 billion)
  8. Netgear ($1.3 billion)
  9. Finisar ($1.3 billion)
  10. GoPro ($1.2 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Cisco Systemsand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of cisco-systems

Juniper Networks (JNPR) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Juniper Networks Inc with $5 billion revenues in the year 2016 was the number 2 Networking Equipment and Services company. Read this report to know the top competitors of Juniper Networks and identify growth and cost optimization opportunities of Juniper Networks

Garmin (GRMN) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Garmin Ltd with $3 billion revenues in the year 2016 was the number 3 Networking Equipment and Services company. Read this report to know the top competitors of Garmin and identify growth and cost optimization opportunities of Garmin

Ciena (CIEN) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Ciena Corp with $3 billion revenues in the year 2016 was the number 4 Networking Equipment and Services company. Read this report to know the top competitors of Ciena and identify growth and cost optimization opportunities of Ciena

Brocade Communications Systems (BRCD) Business Analysis – Analyze Historical Performance, Strategic...

Brocade Communications Systems Inc with $2 billion revenues in the year 2016 was the number 5 Networking Equipment and Services company. Read this report to know the top competitors of Brocade Communications Systems and identify growth and cost optimization opportunities of Brocade Communications Systems

Fitbit (FIT) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Fitbit Inc with $2 billion revenues in the year 2016 was the number 6 Networking Equipment and Services company. Read this report to know the top competitors of Fitbit and identify growth and cost optimization opportunities of Fitbit

HC2 Holdings (HCHC) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

HC2 Holdings, Inc. with $2 billion revenues in the year 2016 was the number 7 Networking Equipment and Services company. Read this report to know the top competitors of HC2 Holdings and identify growth and cost optimization opportunities of HC2 Holdings

Revenues Analysis

Cisco Systems (CSCO) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Cisco Systems, Inc. (CSCO) from 2012 to 2016. Cisco Systems generated a total of $49.2 billion revenues during 2016. Cisco Systems reported a revenue growth of 0.2% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in July.

Cisco Systems (CSCO) Revenues And Revenue Growth From 2002 To 2016

This report provides the last fifteen years revenues and revenue growth of Cisco Systems, Inc. (CSCO) from 2002 to 2016. Cisco Systems generated a total of $49.2 billion revenues during 2016. Cisco Systems reported a revenue growth of 0.2% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in July.

Cisco Systems (CSCO) Revenue Growth Comparison With Industry Growth From 2012...

This report provides a comparison of Cisco Systems, Inc. (CSCO) revenue growth with Networking Equipment and Services industry growth during the last five years from 2012 to 2016. Cisco Systems reported a revenue growth of 0.2% year-over-year during 2016. The Networking Equipment and Services industry growth was 3.1% year-over-year during 2016. Cisco Systems growth was slower than the industry during 2016.