Below is a problem faced by Cisco Systems. Can you help me with the questions associated with it?
Question 1) Who are the relevant market and non-market stakeholders in this situation? What are their interests? Please indicate if each stakeholder is in favor of or opposed to the Coyote Valley development project and why.
Case Scenario:
Cisco Systems, based in San Jose, California, is a worldwide leader in high technology business. Founded by a group of scientists in 1984, the company designs and makes hardware for the internet-the routers, servers, switches, cables, and modems that connect the world's computers. The company employs about 35,000 people globally. Of these, over 40 percent work in or near corporate headquarters in the Silicon Valley, making Cisco the region's largest private-sector employer.
As the internet took off and demand for its products boomed in the late 1990s, Cisco quickly began to outgrow its urban office space. In 1999, the company proposed a solution: a massive industrial park to be constructed in a semi-rural area called Coyote Valley, just inside San Jose's southern border. The largely underdeveloped 400-acre site was then a mix of orchards and oak-studded grasslands, punctuated by several creeks.
Cisco's plan called for construction of a $1 billion multiple-building campus that would house up to 20,000 employees, with parking spaces for 22,000. The company said it would set aside 270 acres as open space and an additional 90 acres for landscaping and recreation. It was also pledged to invest and additions $122 million in public roads, a freeway interchange, and a fire station. The proposed development was so large that locals quickly dubbed it "Cisco City."
Cisco believed that it needed to expand quickly to compete effectively with larger rivals such as Nortel and Lucent. Building in the Coyote Valley would enable it to keep core employees in its home community, as well as to continue to recruit in an area known for its highly skilled workforce, "its part of our overall strategic plan to really grow where the talent is," said a company vice president.
The company's expansion plan was praised by the San Jose Chamber of Commerce, and organization of local businesses. The Coyote Valley development was also supported by trade unions in the construction industry, and by many local politicians who argued that it would bring jobs and tax revenue to the city and county. The community was divided. In the immediate vicinity, many seemed enthusiastic. Outside the city, however, opposition flared. The development plan did not include a provision for housing, and many wondered where the 20,000 or so workers at the Coyote Valley would live. Surrounding towns expresses concern that Cisco employees would move in, driving up housing prices, clogging roads, and putting pressure on already strained local services.
Environmentalists also lined up against the project. They charged that the development would pollute the air with automobile emissions, destroy valuable habitat, and contribute to urban sprawl. As the controversy headed for the courts, Cisco managers considered what steps they could take to increase the chances their proposal would success.