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    PGP10076 AyushSingla SDM

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    ayush singla
    Cisco should distribute VoIP products through both voice VARs and data VARs for the following reasons: 1) Voice VARs have experience with voice products but data VARs have experience with the internet-based delivery of VoIP. Using both allows Cisco to tap into both types of expertise. 2) VoIP provides significant cost savings for end users. Distributing through both channels allows Cisco to reach a wider customer base and increase demand. 3) Managing distribution through both established channels (voice VARs) and emerging channels (data VARs) will help Cisco better control its channel strategy and maintain its leadership position as the VoIP market grows.

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    PGP10076 AyushSingla SDM

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    ayush singla
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    Cisco should distribute VoIP products through both voice VARs and data VARs for the following reasons: 1) Voice VARs have experience with voice products but data VARs have experience with the internet-based delivery of VoIP. Using both allows Cisco to tap into both types of expertise. 2) VoIP provides significant cost savings for end users. Distributing through both channels allows Cisco to reach a wider customer base and increase demand. 3) Managing distribution through both established channels (voice VARs) and emerging channels (data VARs) will help Cisco better control its channel strategy and maintain its leadership position as the VoIP market grows.

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    Cisco should distribute VoIP products through both voice VARs and data VARs for the following reasons: 1) Voice VARs have experience with voice products but data VARs have experience with the internet-based delivery of VoIP. Using both allows Cisco to tap into both types of expertise. 2) VoIP provides significant cost savings for end users. Distributing through both channels allows Cisco to reach a wider customer base and increase demand. 3) Managing distribution through both established channels (voice VARs) and emerging channels (data VARs) will help Cisco better control its channel strategy and maintain its leadership position as the VoIP market grows.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    23 views5 pages

    PGP10076 AyushSingla SDM

    Uploaded by

    ayush singla
    Cisco should distribute VoIP products through both voice VARs and data VARs for the following reasons: 1) Voice VARs have experience with voice products but data VARs have experience with the internet-based delivery of VoIP. Using both allows Cisco to tap into both types of expertise. 2) VoIP provides significant cost savings for end users. Distributing through both channels allows Cisco to reach a wider customer base and increase demand. 3) Managing distribution through both established channels (voice VARs) and emerging channels (data VARs) will help Cisco better control its channel strategy and maintain its leadership position as the VoIP market grows.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    INDIAN INSTITUTE OF MANAGEMENT, ROHTAK

    PGP 10
    Mid Term Exam (Term IV)
    Sales & Distribution Management
    13.07.2020
    MM -

    Name: Ayush Singla

    Roll No: PGP10076

    Marks Secured:
    (In figures & words)

    Question No. 1 2 3 4 5 6 7 8 9 10
    Maximum Marks
    Marks Scored

    Examiner’s Signature
    Please write in given space only

    Question-1 Analyze the case using the 5Cs framework


    Answer-1-
    Company-
     Cisco Started in 1984 by a Stanford University couple Len Bosack and Samdy Lerner
     Manufacturing in stating was outsourced for keeping the the focus on competencies
     For the fiscal year 2001 reported loss of nearly 1 Billion Dollar and had a comeback
    in year 2003
     Customers were divided into five tiers
     Status of world’s most valuable company
     Market capitalisation exceeded 500 billion dollars
     Deals in Switching and Routing
     Network in Box simplified kit of preconfigured routers and switches

    Customers
     Customers were divided into five tiers
     The top 1-100 accounts and about 25 service provider
     The next 125-10000 customers, with a collaborative channel partner
     The next 10000-100000 customers with significant channel activity and marketing
    support
     The nearly 1 million small business customers
     The nearly 10 million consumer accounts served through retailer or web

    Context
     In 1995 Industry Revolution taken place
     Growth of internet were inextricably intertwined
     Flood of ISPs come into existence to service the technology need of companies
     NASDAQ stock Index high as 5132 and low as 1619
     Cisco Competed in 3 big markets

    Competition
     Core Corporate networking- Hewlett-Packard, Nortal, 3Com, and Huawei
    Technology. Cisco share in market-70%
     Enterprise accounts and SMB-Market Share -40%
     Telecommunication- Nortel, Juniper, Siemens, Alcatel, and Lucent
     Consumer market-Netgear and D-Link

    Collaboration
     Collaborations with Multiple channels
     Manufacturing was outsourced
     Indirect sales and distribution
     Firstly 6000 VAR’s worldwide than reduced
     Collaborations with system houses, telecommunications, Value added reseller, Direct
    marketing Resellers, and Retailers
     Online retailers-CDW, Insight, PC Connections and Micro Warehouse
    Question-2 How have Cisco’s Channels evolved from the inception of the
    firm till the year in the case? Why have they evolved in that way
    Answer-2
    In starting Direct distribution was flowed but in the late 1990s Indirect sales and
    distribution grew to almost 90%

    Reasons-
    Increasing market growth in 1990s
    Partner add Unique value
    Cost effective
    Difficult to add direct sales force

    Various channels
    System Houses- Provide Turnkey solution
    Telecommunications-Installed and maintained voice
    Value added Reseller ( 30 to 35 % sale)- networking products and services
    Direct marketing Resellers and Retailers- For serving small customers

    Consist of 10000 strong people in marketing and sales organisation divided in to Field
    marketing, Customer account management, and sale engineers

    Moving towards Internet Channels


    Benefit of serving consumers directly
    Customer preference for a system integrator or online retailer

    From Volume to Value ( Major Change)VARs


    Drop sales volume requirements entirely and implemented a point system that reward levels
    of a new technology, better customer service.

    Reasons
    To increase the customer satisfaction so that sales can be increased
    Uniqueness in the Industry
    Highly skilled solution provider
    Some good Distributer moved to Gold

    Before taking any change, Cisco should identify the proper channel alternatives
    a) Types of Intermediaries Available-Agents, Dealers, Industrial distributors according
    to industry requirements
    b) Number of Intermediaries Available-Exclusive to Selective
    As Cisco move from direct to Indirect by looking Benefit’s of change in starting
    c) Terms and responsibilities- Cisco should make proper terms and conditions related to
    price policy and conditions of sale so that conflicts can be managed in future
    Cisco should also evaluate alternatives by the way of Economy, Control and Adaptive
    Question-3 How should Cisco distribute VoIP products? Why?
    (Alternatives: Through voice VARs; through data VARs; through both;
    any other channel).
    Answer-3 Alternatives available and Evaluation
    1) Through Voice VARs
    a. Firms such as Avaya, Nortel, and Siemens had advantage of relationship with
    voice Channels
    b. Many Companies Prefer Avaya and Nortel
    c. Voice channel is more consolidated than the Data Channel
    d. Channel margins were traditionally in 20% plus range, with possibility of
    more
    Negatives
    a) Cannibalize the existing product
    2) Through Data VARs
    a. Internet based phone system would be cheaper than traditional phone system
    b. Lower calling cost and easier to manage
    c. Industry Based Phones switches accounted for 31% of all phones switches
    purchased in 2004
    Negatives
    a) Issue of voice quality
    b) Less reliable than traditional networks

    Recommendation’s- Should Go for Both Voice VAR and Data VAR


    1) Most of the Cisco managers feels that Voice VAR needed to be added to the mix of
    Cisco
    2) New VoIP technology delivered huge cost advantage for the end users
    3) Demand will be Increased
    4) Better management of Channels
    5) Must be handed carefully and implement properly to control overall situation
    6) Changes in needed to remain the market leader
    7) If cannibalize would happen it can increase the market share
    8) More comfortable to the customers
    9) Requires after sale service

    Proper Channel Design has to be followed by Cisco for taking the decision
    a) Identify the customers needs which can satisfy them and then select the right channel
    which can be the both Data and Voice VARs
    b) Channel objectives- Cisco has to identified the channel objectives and according to
    that it can select the channel. As Objectives identified by Cisco can Solved by Both
    Data and Voice VARs
    c) After Selection of channel, Evaluation of alternative is done as mentioned above
    advantages and Negatives of selecting Voice and data VARs and final decision is to
    adopt both Voice and Data.

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