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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (65671)	7/1/2004 1:13:33 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 77400

Also, if Cisco doesn't move the jobs offshore, then someone else will Maybe, maybe not. The reality is that moving jobs offshore doesn't save anywhere near the % savings that were initially pumped by McKensey. Managers were expecting 70% savings and would up with 15%- routinely. For a 15% cost of labor reduction you can find MANY areas in the company to cut and still remain competitive. 15% can easily be shaved off the executive ranks for example and nobody would miss a beat. I won't go into the Dell situation here but we all know the kind of reputation hit Dell took for their offshore experiment. They are advertising to try to recover from the blunder. Remember how offshore call centers were pumped 2 years ago? SUPERIOR. Not just cheap but better. Anybody think thats true after calling dell? Don't take my word for it, judge for yourself. Anyway a simple ackowledgement by some CEO somewhere that our US companies will never be as valuable as they were because these same companies sent their business offshore would do it for me. I just want somebody to admit it.

To: Kirk © who wrote (65671)	7/1/2004 4:23:51 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

See, I just fundamentally disagree with this thesis. Sure Cisco can make it up on volume if they get into price competition, but during the entire life of Cisco's business they have focused on the high-end, prefering to compete on service and on value-added products. That's marketing 101...engage in price competition only as a last resort. What happens at smart companies like Cisco and Intel is that they are constantly innovating or buying innovators to put products on the market that actually cannibalize their older products. That way they keep their margins high on the newer stuff. The older stuff, they milk as much as they can, until it is end-of-lifed. They stay in the lead through innovation, not through artificially holding on to jobs which are no longer competitive advantages. That's the virtuous cycle of innovation.