STRATEGIC ANALYSIS AND RECOMMENDATION: CISCO'S SMART CITIES INITIATIVE
I prepared this report for an MBA strategy course. The paper explores Cisco's strategy and positioning in the smart cities market. Report introduction copied below.
INTRODUCTION TO SMART CITIES
Over half of the global population currently lives in urban areas. This number is expected to grow to two-thirds, with an additional 2.5 billion people living in cities by 2050.1 Municipalities are already struggling to provide adequate support to their crowded cities and will need to implement new, holistic solutions in order to sustain the anticipated growth. Though cities contribute over 70% of the world’s GDP, they also account for roughly 70% of global greenhouse gas (GHG) emissions.2 This suggests that cities can and should play a key role in the effort to reduce global GHG emissions.
In order to support the rapid urbanization that is taking place, cities must find ways to become more sustainable, efficient, responsive and liveable. Governments, businesses and social sector leaders have identified this need and are beginning to work together to implement innovative solutions.
One popular solution for our global urban challenges is the smart city. There is no single agreed upon definition of a smart city, but the term broadly refers to an “integrated approach to improving the efficiency of city operations, the quality of life for its citizens, and the growing of the local economy.”3 These smart city goals are achieved in large part through the use of innovative technologies, sensors and networks.
Urban strategist and smart city expert, Boyd Cohen, developed the “Smart Cities Wheel” as a holistic framework that outlines the core components that make a city “smart.” Components include: Smart People, Smart Economy, Smart Environment, Smart Government, Smart Living, Smart Mobility. As the wheel (shown below) demonstrates, the smart city is a truly integrated approach to promoting urban development.
The interest in smart cities has grown rapidly in recent years. A Google Trends search shows a massive uptick in the number of Google searches for the term “smart cities” just in the last year.
Companies have recognized the massive opportunity to serve the broad and growing smart city market. Established suppliers across the technology, transportation, building management and energy sectors have established Smart City divisions and startups are launching with related offerings. Cisco, along with IBM and Schneider Electric, has become one of the leaders in this space.