Cisco Negotiation Best Practices


By: Kevin Fertle -- Senior Research Analyst

31 March, 2014

Cisco Negotiation Best Practices

Cisco has been the Top of the mind brand for network hardware and the company has a dominant position in the market. Owing to its strong market position and the reliance of buyers on Cisco for network hardware the company has been a difficult vendor for buyers to negotiate significant discounts. This paper is aimed at providing buyers with parameters or levers which they can employ during negotiations to increase the bargaining power and to throw some light on what type of discounts a buyer should obtain when negotiating with Cisco. Problem Statement: Cisco has been the most dominant player in the network hardware segment for as long as a decade and still continues to lead the various segments of the market. With the rapid advancements in Open flow networks and SDN have threatened to reduce Cisco?s position in the market. Though under pressure, this stronghold in the market has made cisco a very difficult vendor to deal with in terms of discounts and negotiations, and buyers from different segments do not have clarity where they stand as buyer in Cisco?s customer segment. This has led to Cisco charging a premium price for their products, which is on an average 20 ? 25% more than the competition. Solution: Buyer awareness of ideal discount percentages and the profit Cisco obtains from each product segment, coupled with the frequently used negotiation levers will enable the buyer to negotiate better with Cisco and will be able to leverage higher discounts. This would reduce acquisition cost and will directly lead to cost savings for the buyer. Introduction Networks are very essential and critical part of every Enterprise, the criticality of network, complexity of the network and the inherent interoperability issues that tag along in the case of multi-brand deployment have together contributed to Cisco holding lion?s share of the market and dictating terms to their buyers. However, Cisco has been under stiff competition in recent years and has been losing market share in almost all segments.


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