Strategic Acquisitions and Accelerated Integration
Case Discussion Questions
1. Of the “Reasons for Acquisitions” section in the chapter, which reasons are the
primary drivers of Cisco’s acquisition strategy?
Cisco uses an acquisition strategy that focuses on building network products and extending its
reach into new areas. The primary reason for this acquisition strategy is because Cisco focused
on developing an infrastructure that supports social media, mobile, cloud computing, and digital
videos. Digital connectivity was initially efficient through e-mails, web browsing, and searches.
Recent development forced the company to consider an alternative strategy to facilitate e-
commerce, digital supply chains, and digital collaboration. The other reason for Cisco’s
acquisition strategy is that the company focused on helping its consumers capture the transitions
occurring in the marketplace, such as software developed to provide digital content to various
multimedia devices.
2. Of the acquisitions Cisco has completed, which ones are horizontal acquisitions and
which ones are vertical acquisitions? Which of these acquisitions do you believe
have the strongest likelihood of being successful and why?
The horizontal acquisition involves taking over another company’s operation. Of the acquisitions
Cisco has completed, the horizontal acquisitions are NDS Group software developers acquired
for $5 billion. More recently, Cisco acquired Intucell, a self-optimizing network software
developer, for $457 million, and Truviso Inc. Vertical integration is when a company acquires
business operations. For example, Cisco acquired Ubiquisys to shift its traffic approach. The
company also acquired Meraki for $1.2 billion to optimize its services in the cloud. The self-
optimizing network software developer acquired by Cisco is likely to be more profitable for the
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Now, let's discuss the concepts mentioned in the article you provided.
Reasons for Cisco's Acquisition Strategy
Cisco's acquisition strategy is primarily driven by two reasons. Firstly, Cisco focuses on building network products and extending its reach into new areas. This strategy is aimed at developing an infrastructure that supports social media, mobile, cloud computing, and digital videos Secondly, Cisco aims to help its consumers capture the transitions occurring in the marketplace, such as software developed to provide digital content to various multimedia devices.
Horizontal and Vertical Acquisitions by Cisco
Cisco has completed both horizontal and vertical acquisitions. Horizontal acquisitions involve taking over another company's operations, while vertical acquisitions involve acquiring business operations. Among the acquisitions completed by Cisco, the NDS Group, a software developer, was acquired for $5 billion, which is an example of a horizontal acquisition On the other hand, Cisco acquired Ubiquisys to shift its traffic approach, and Meraki for $1.2 billion to optimize its services in the cloud, which are examples of vertical acquisitions.
As for the likelihood of success, it is challenging to determine without a comprehensive analysis of each acquisition. Success can depend on various factors, including integration efforts, market conditions, and the alignment of the acquired company's products and services with Cisco's overall strategy. It is important to consider the specific details and circ*mstances of each acquisition to make an informed judgment.
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