Firms struggle to create an agile organizational system since it requires the development of three enabling capacities: to make sense quickly, make decisions nimbly, and redeploy resources rapidly. While the study of strategic agility is of growing interest as a prime means of organizational growth, the ways by which key mechanisms of growth such as mergers and acquisitions (M&As) help in building this capability remain elusive. This article highlights the differences between platform acquisitions and bolt-on acquisitions (most bolt-on acquisitions in high technology industries can further be separated into product acquisitions on the one hand, and educational, technological and/or talent acquisitions on the other hand). These different forms of acquisitions can enhance strategic agility in distinct ways along different time horizons. When properly managed, acquisitions can enhance the gradual accumulation of the capabilities underlying strategic agility. This article presents a more complex picture of a non-linear reinforcing dual path between M&As and strategic agility.

The case first describes the evolution of Cisco Systems of San Jose, California, from a narrowly-focused routing and switching equipment vendor, with a highly effective competitive strategy, into a diversified networking and IT giant. This growth was fuelled by many acquisitions, the rationale of which developed over time, in light of the growth opportunities and challenges which Cisco encountered. The events described in the case took place in early 2007, while Cisco was considering the acquisition of IronPort, a security software company. A decision to purchase IronPort would symbol a continual divergence from Cisco's old and famous acquisition strategy of acquiring young entrepreneurial firms, to complement its internal development efforts and become a one-stop-shop for its networking customers. This divergence started a few years earlier, with the acquisition of large firms like Linksys and Scientific Atlanta, labeled by Cisco's management as "platform" deals.