Task 3

For the purpose of this task we will assume that Cisco already conducted the required due
diligence needed and identified the technology company as a contributor to boost Cisco’s
core business/products.

Is the Technology Critical

NO Watch & Wait
to Ciscos Core Product?

YES

NO
Does The Technology Provide Solutions to
Cisco s customers now or in the future?

YES

Are the Firms facilities and

Acquisition YES NO Alliance
people close to Cisco s?

Fig 2. Diagram based on Dyer et al (2004) Ciscos’s market entry strategy.

Cisco is not particularly keen on acquiring partners that are geographically distant in order to
avoid transferring and at times possibly relocating people (Dyer JH et al, 2004). Therefore,
we may propose a strategy that would start with an alliance building up to a potential
acquisition in the future. The alliance with an established company within the Japanese
market may ease expanding internationally and at times overcoming one of the barriers for
entering a foreign market which may present different legislation, rules and regulations as
well as distinct business practices (Czinkota et al, 2009). Furthermore, the alliance may
facilitate launching a product for the first time in Japan and gain a better insight of the
consumers’ behaviors and requirements.

The initial alliance would consist of collaboration and synergy by combining both identified
resources, talent and knowledge that may allow Cisco to absorb innovation and the required
technology needed. Once the alliance provides the desired financial returns and confirms
that the technology company is pivotal for Cisco and contributes to the overall strategy and
crucial for future innovation, we may suggest that Cisco should initiate the acquisition (Dyer
JH et al, 2004).
The task suggested that Cisco identified the technology company in Japan. Therefore,
people and culture may be considered a very important factor that may determine either a
positive or negative outcome of the collaboration. In most acquisitions, the acquired
workforce only meets the counter party after the announcement (Czinkota et al, 2009).
Hence, one may think that managers may develop a strategy to smooth this delicate
transition phase crucial to create effective synergies between both entities.

Since Japan scored high in Hofstede’s cultural dimensions ‘Masculinity, Uncertainty

Avoidance & Long Term Orientation’ (Hofstede Insights, 2019), it is important to facilitate the
integration process and it may be rationale to design a dedicated team headed by the
integration manager. Furthermore, such team of managers would implement strategies and
business solutions to align the acquired workforce to Cisco’s strategy. In other words,
ensuring that at all levels across the acquired technology company the workforce develops
the required skill set and technical repertoire to carry out tasks to meet the corporate
objectives needed to execute Cisco’s strategy.
Nevertheless, both academics and business practitioners have a common thought that most
acquisitions/partnerships/strategic alliances end up in failure (Dyer JH et al, 2004).
Culture and people are constantly labelled as the main causes due to factors like resistance
to change and fear of the unknown (Financier, 2019).

References:
Czinkota, M. R., Ronkainen, I. A., Moffett, M. H., Marinova, S., & Marinov, M.
(2009). International business (Vol. 4). Dryden Press. European Edition
Dyer, Kale and Singh (2004). When to Ally & When to Acquire. Harvard Business
Review; Jul/Aug2004, Vol. 82 Issue 7/8, p108-116
Financier Worldwide Magazine, 2019, Managing M&A Communication
https://www.financierworldwide.com/managing-ma-communication/#.XGagj9IzbIU
https://www.hofstede-insights.com/country-comparison/japan/