Table: Volpi's Game Plan

GOOSE SALES...

PROBLEM

With dot-coms going bust and corporate clients cutting tech spending, Cisco says revenue for the next six months could be flat to minus 5%, vs. 58% growth a year ago.

SOLUTION

Jump into hypergrowth markets, including voice-over-Internet phones, optical networking equipment, and gear to manage content on the Web.

SLASH INVENTORIES...

PROBLEM

Cut bloated inventories, which have doubled in the past six months, to $2.5 billion, without resorting to price-cutting.

SOLUTION

Rejigger the sales force to take advantage of fast-growing geographies and product lines such as wireless in Japan and Europe.

STOKE ACQUISITIONS...

PROBLEM

Rev up growth by acquiring companies, even though Cisco's stock has lost its cachet, plunging 47%, to $28.50 a share, since the start of last year.

SOLUTION

Buy smaller, less expensive companies with hot-selling products that will boost earnings immediately.

REDUCE TURNOVER...

PROBLEM

Hold on to key employees at a time when half of Cisco's workforce has been hired in the past 18 months and is holding worthless stock options.

SOLUTION

Add hooks such as options that vest over five years instead of four.

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