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Competitive Strategies Case Study

Case Title:

The Future for Nortel: 2006 and Beyond

Publication Year : 2006

Authors: Krishnakumar

Industry: Engineering, Electrical and Electronics


Case Code: COM0151C

Teaching Note: Available

Structured Assignment: Not Available

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In October, 2005 Telecom equipment major Nortel Networks Corporation named Mike S. Zafirovski as its new president and Chief Executive Officer. Zafirovski had his work cut out for him. To make sure Nortel found level ground, after the accounting scandal and fraud of the past few years had shaken the international reputation of the telecom giant. The big question was whether Nortel could register high turnover, post satisfactory profits and increase market share to maintain its position as a major player in the telecom sector. Or would the company lose market share and customer confidence, to ultimately settle at the second level of manufacturers in the industry?

The case traces the history of Nortel from a builder of phones and fire alarm boxes at the beginning of the last century to offering complete solutions for multiprotocol, multiservice, and global networking together with software and services in 2006. It discusses the global business activities of Nortel and its performance in the Cable market and Small and Medium Enterprises as also the need for adequate Security Systems in the expanding telecom industry and the IT world. The threat from manufacturers in China with their capacity to offer low prices is also analysed. The case concludes by taking a look at the challenges ahead for Nortel, the need to introduce new products and services quickly into international markets so as to be always one step ahead of competitors in the fast-paced Web world. Should Nortel shed weight and become smaller by reducing product lines or should it merge with one of the major telecom players to become bigger and better?

Pedagogical Objectives:

  • To analyse Nortel’s performance vis-à-vis the other major players in the telecom industry and understand the problems facing the new Chief Executive.
  • To discuss and analyse the strategic plan evolved to take Nortel out of the past accounting scam, increase global market share and consolidate operations worldwide.

Keywords : NORTEL; Mike Zafirovski; Networks; Spin-off; Fibre-optics; Digital; Telecom; Internet; Competitive Strategies Case Study; Strategy; Global; Ethernet; VoIP; SMB; Cable Market; Wireless; Brand; Strategy; Communication; Multimedia; Telephony; WiMax

Contents : 
The Operational Split
Revenue Flow timeline

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