Nortel Networks has been forced to focus and refocus, or perhaps retrench is a better word, in a major way since its glory days. The process continues under its new CEO, Mike Zafirovski, as was mentioned in a Reuter news item this week, Nortel faces challenges in 2006.
Michael Porter, the strategy guru, has defined the challenge of strategy, “Of course strategy is hard – it’s about making tough choices.” In this case it’s the reassignment of resources that were bringing the MPE 9500 (Neptune) router to the market-place as a free-standing product for phone companies. It has taken four years of work and millions of dollars to get to this point. The product had already been tested by some customers and had received strong support.
Nevertheless it was already clear that Nortel could not be a market leader in this market-place and deliver high margins. So Mike Zafirovski, following the same strategy his old boss, Jack Welch, at General Electric might have taken, is putting an X on the project.