Mergers and acquisitions study and analysis of Cisco systems

Abstract

Acquisitions form the buy pillar of the Cisco's three pillars of innovation: build, buy, and partner . Cisco s growth strategy has been a combination of Organic and Inorganic growth. Its investment has been two pronged namely toward Acquisition and Development (A and D) and Research and Development (R and D) .Cisco focuses on acquisitions that capitalize on new technologies and business models. It segments acquisitions into three categories: Market acceleration , Market expansion , and New market entry . The objective is to enable target companies to bring different types of assets to Cisco, including niche talent and technology, mature products and solutions, or new go-to-market strategies and business models. Cisco is well known to be a leader in Acquisitions with a sound Pre and Post Acquisition strategy. With this project, we aim to firstly study the Objectives of Cisco s key acquisitions, Parameters of defining Acquisition success and Actual success rate of Cisco s acquisitions. The project includes the short term Market evaluation of the acquisitions based on the Stock price movement. This study includes 90 acquisitions 1of Cisco from 1993 to end of 2009Despite having a strong A and D strategy, Cisco has seen multiple acquisition failures too. Our study also includes the reasons and key learnings from both the success and failure scenarios. This assessment is not complete without the comparison with industry benchmark. This report thus also incorporates analysis of few of Cisco s competitors such as Nortel, Juniper and Alcatel Lucent. Finally, we conclude by stating the Beyond 2010 plans of Cisco, potential bottlenecks and Learnings from the Overall Project.