EE204: Business Management for
Electrical Engineers and Computer Scientists

Cisco Systems, Inc.: Collaborating on New Product Introduction

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1. Read: The Practice of Global Product Development
2. Cisco Systems, Inc.: Collaborating on New Product Introduction

Case Summary

In November 2007, a global, cross-functional team at Cisco Systems, Inc. was seeking management approval to start manufacturing a new router, code-named Viking. The team faced a host of challenges in launching the low-cost but powerful router for telecommunications service providers. After overhauling the project to sharply increase the router's planned speed and capacity, the company had just one year to launch the product, an unusually fast schedule. In addition, Cisco wanted to debut China as a low-cost manufacturing base for the high-end product. It planned to use contract manufacturer Foxconn Technology Group to produce the machine, even though Foxconn had never made such a complex product for Cisco. Could Foxconn handle the technical complexity? Could Cisco work closely with Foxconn to mitigate the project risks? Could Cisco's methodology for new product introduction rise to the necessary level of sophistication? The case highlights the challenges and complexities of developing and manufacturing a sophisticated technology product for a worldwide market. Students will consider what it takes to achieve success in new product introduction, or NPI. The case also offers an opportunity to evaluate supply chain issues in a company that out sources manufacturing globally.

Discussion Questions

1. What are the challenges and risks faced by technology companies in developing and introducing new products using global resources?
2. What are the risks and benefits of using Chinese contract manufacturing from the start?
3. In selecting Foxconn and expanding its role in the supply chain, what were the potential risks and values to Cisco?
4. What should Cisco do to mitigate these risks and ensure successful development and launch of the Viking router?