This case was written by Professor Philip Anderson, Professor Vijay Govindarajan, and Professor Chris
Trimble, and by research assistant Katrina Veerman T’01 of the Tuck School of Business at Dartmouth
The case was based on research sponsored by the William F. Achtmeyer Center for Global
Leadership and the Glassmeyer/McNamee Center for Digital Strategies.
It was written for class
discussion and not to illustrate effective or ineffective management practices.
Unless otherwise noted, the information in this case was gathered from one of the following sources: (1)
SEC filings, (2) internal Cisco Systems, Inc., documents, and (3) interviews listed in Appendix 1.
Trustees of Dartmouth College. All rights reserved.
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E-Business Innovation at Cisco
“We view the Internet as a prototype of how organizations eventually
will shape themselves in a truly global economy.
It is a self ruling
- John Morgridge, Annual Report, 1993
In early 2001, Cisco Systems was a very rapidly growing corporation (see financial
summary, Figure 1) that sold a wide variety of sophisticated internetworking
One of their most important business segments was other corporations
interested in upgrading their technology infrastructures to enable more efficient
business processes, higher quality products and services, and, increasingly, entirely
new internet-based strategies. Anticipation of how this “e-business transformation”
was going to revolutionize the way the economy functioned inflated stock valuations
for information technology suppliers to unprecedented heights.
One constant spokesman for the potential of e-business was Cisco CEO John
Chambers, who often used his own company as an example of what was possible. At
the time, Cisco enjoyed a reputation as the most sophisticated e-business in the world.
As a rule, if anything could be “webified” at Cisco, it was. Nearly 90 percent of all
orders were placed on Cisco’s website, the Cisco Connection Online (CCO), and
nearly 80 percent of all products were built and shipped from a supply partner,
without Cisco ever physically taking possession. The company’s ability to
demonstrate cutting-edge e-business practices provided a compelling argument for
CEOs weighing the tough decision to make multi-million-dollar IT infrastructure
While the company had been extraordinarily innovative to date, Cisco was far from
complacent about being able to maintain its leadership position in e-business.
Hartman, a leader in Cisco’s Internet Business Systems Group (IBSG), which
consulted to other corporations on information technology strategies, described the