The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because
A)Cisco had valuable competencies.
B)the Flip division of Cisco was slow and less responsive to market pressures.
C)consumers continued to purchase the camera.
D)Cisco had good vision of the market.

Question

Quizplus · Accepted Answer

In large, widely diversified firms, decision making can become slow and remote to market conditions. Cisco competes in a wide range of markets and had nearly 60 decision making groups in its structure, with several layers separating John Chambers, the CEO of Cisco, from the individual markets. In such a large and diversified firm, the decision making in a small division with only 400 million USD in sales, 1 percent of the overall sales of Cisco, was not the top priority of corporate managers. Stephen Baker, an analyst with NPD Group, said that Cisco was never really committed to the product. As a result, Flip was slower and less responsive to market pressures than it was when it was an entrepreneurial firm.

The Cisco Acquisition of Pure Digital Technologies, the Parent of the Flip