Preview

Nortel Article Analysis

Good Essays
Open Document
Open Document
545 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Nortel Article Analysis
At the annual shareholder meeting in Ottawa, current chief executive officer of Nortel Networks Corp., Mr.Zafirovski told shareholders that the company is finally making a come back. Although the company has been faced with significant layoffs, lawsuits, rapid executive turnover, a struggling share price and poor sales; the CEO believes that this is all in the past and that Nortel "will be a great company again". The company is facing fierce competition from new low-cost competitors in the Asian market, which has made its journey to recovery all the more difficult. Despite this Mr. Zafirovski is enthusiastic and optimistic that Nortel will become a leader in the telecommunication industry. According to the article however, shareholders remain skeptical about this rosy forecast. This comes as no surprise given the company 's shady past of loses and questionable corporate governance practices (Tuck, B9). The CEO mentioned that "Nortel Networks Corp. is poised to be a leader in a massive market that will define a new era in communications". This vision appears vague, broad and fails to convey to shareholders, analysts or investors how exactly management intends to reach its goal. Like employees, unless management communicates to shareholders the reason for its strategic course and how it plans to reach its vision, it will be hard for shareholders to buy into the strategic vision of the organization (Thompson, Gamble, Strickland (2006), 18). It comes as on surprise then, why shareholders are doubtful about what Mr. Zafirovski had to say. The article emphasizes that Nortel must take into consideration what is happening in the external environment, especially with regards to its competitors, so that it can develop a sound strategy and ultimately reach its goal of being a leader in the telecommunication industry (Thompson et al. (2006), 9). Additionally, the article reinforces how unethical strategies and behaviour displayed by Nortel in the past can have serious


Cited: Nortel ‘back in game, ' CEO tells shareholders. (2007, May 3rd). The Globe and Mail, pp. B9 Thompson, A., Gamble J., & Strickland, A. J., STRATEGY Winning in the Marketplace, Core Concepts. Analytical Tools. Case 2/e", McGraw-Hill, 2006
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    AT T2
    • 556 Words
    • 2 Pages

    AT T2

    AT&T Corp., one of the largest companies in the United States, has had a long and storied history. Initially, AT&T operated as a monopoly, but in 1982, Justice Department, broke up the company into individual companies. Prior to divesture (in 1981), AT&T was the largest private company in the world and despite many challenges, AT&T remained an archetypical “widow-and-orphans” stock for a long time. The term "widows and orphans" was used to describe stocks with a relatively high degree of safety and dividend income and numbers from exhibit 1speak for themselves. By 1982 the company increased all its key financial indicators. Revenues and operating earnings increased 12% and 6% respectively comparing to year 1981. In ten years, the company raised its revenues, net income, cash and assets more than 2 times. It`s worth to mention that AT&T was able to reduce its total outstanding debt by $ 725 mil and at year-end, the company`s debt ratio stood 42.3% down from 46.7% in 1980. In addition, AT&T neither cancelled nor lowered dividends, and only increased dividend per share by 10% annually. Aforementioned facts suggest that company`s financial policies and financing choices were appropriate for the nature of the business and that AT&T was one stable, reliable and profitable companies in the world by 1982.…

    • 556 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Article Analysis Sox memo
    • 673 Words
    • 3 Pages

    Article Analysis Sox memo

    The Sarbanes-Oxley prohibits corporate auditors from participating in activities outside their core competency in hopes of avoiding a conflict of interest.…

    • 673 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Al Dunlap and Sunbeam
    • 888 Words
    • 4 Pages

    Al Dunlap and Sunbeam

    Dunlap is famous for his ruthless but seemingly successful turnaround techniques that he has employed: “For much of his career before coming to Sunbeam, Al Dunlap was known as the poster child of corporate restructuring.” Given that the Board was familiar with Dunlap – his reputation and employment history, hiring Dunlap clearly showed they needed a fast and powerful turnaround and Sunbeam was becoming helpless in the struggle to protect its market share in an increasingly competitive industry. Also, Dunlap’s priority focuses largely and explicitly on stockholders and virtually no regards for other stakeholders. Hiring Dunlap meant that Sunbeam’s goals are limited to just maximizing stockholders’ wealth and all other important aspects of the existence of corporation such as ethics, product quality, employee and customer satisfaction are severely impaired. A corporation is not solely an instrument of stockholders, built to cater to stockholders’ wealth, but a coalition between many resource suppliers with a view to increasing their common wealth: supplying goods and services to customers with efficiency (at relatively lower costs or with high quality), providing jobs to employees with suitable skill sets and so on. Thus, Al Dunlap’s shareholder primacy is unreasonable and contradictory to the essential objectives of the corporation. Flawed perspectives led to wrong decisions. In an effort to create the “fast turnaround,” Dunlap fired many employees and shut down many factories to cut costs…

    • 888 Words
    • 4 Pages
    Good Essays
    Read More
  • Better Essays

    Nur518 R7 Quantitative Article Analysis Worksheet Nc
    • 1068 Words
    • 4 Pages

    Nur518 R7 Quantitative Article Analysis Worksheet Nc

    Analyze and critique a quantitative nursing research article from a nursing research journal published within the past five years. Include 3 scholarly references—the article, the text, and one outside source. Use the Guidelines for Quantitative Nursing Research Critique to complete the following steps:…

    • 1068 Words
    • 4 Pages
    Better Essays
    Read More
  • Good Essays

    WK 2 Research Article Analysis Paper
    • 1087 Words
    • 4 Pages

    WK 2 Research Article Analysis Paper

    The first section of the research paper introduces the two student researchers and his or her preferred learning style. Research student one (SR1) had a preferred learning style of kinesthetic and research student two (SR2) had a preferred learning style of visual, with both agreeing that auditory was the least preferred learning…

    • 1087 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Nortel Networks Case
    • 345 Words
    • 2 Pages

    Nortel Networks Case

    Nortel enters into guarantees that are defined and meet guidelines as laid out in FIN 45. Nortel typically indemnifies the purchaser of business that is conducted by Nortel in the event that a third party asserts a claim against the purchaser which would become a liability that is retained by Nortel as defined in their agreement. Nortel is has been unable to estimate the potential for maximum liability, since these type of indemnifications of guarantees do not have a maximum amount and the amounts are dependent upon the future contingent events. As mentioned in Nortel’s notes they have not historically made any significant indemnifications payments under any of the agreements that have been accrued in their financial statements. Intellectual property indemnifications obligations have a maximum amount that may be paid under these agreements of $48 million as of December 31, 2004. Lease agreements maximum amount that Nortel can be reliable for paying is $7 million as of December 31, 2004 under these types of agreements.…

    • 345 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    Wall Street Journal Article Analysis
    • 369 Words
    • 2 Pages

    Wall Street Journal Article Analysis

    In my opinion, the Federal Reserve bank should not 'keep the cash spigot open'. Mr Stein, the president of the Federal Reserve Bank in Boston has stated that low rate policies help the U.S economy, however some institutions and individual investors may take on too much debt, or too many risky assets, resulting in the toppling of banks and other financial institutions.…

    • 369 Words
    • 2 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Article Analysis
    • 310 Words
    • 2 Pages

    Article Analysis

    5. The thesis of the essay is, “Life is better in the big city, and it all comes down to one general reason: more choice”.…

    • 310 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Markstrat Final Report
    • 2968 Words
    • 9 Pages

    Markstrat Final Report

    Firm E performed very well during the 8 periods we were in control. During those periods we grew the company’s contribution margin from $14.2 million dollars up to $70 million dollars and oversaw a stock price increase of over 170%. During this period we managed a maximum of 5 brands. Three of these five brands are making substantial profits totaling $75.7 million in the 8th period. The other two brands were targeted at the emerging Vodite market and although they are not currently seeing a profit, projections show they are on track to see profits within the next 2 periods (Exhibit #: chart showing Vodite sales)…

    • 2968 Words
    • 9 Pages
    Good Essays
    Read More
  • Good Essays

    Nortel Hbs Case
    • 422 Words
    • 2 Pages

    Nortel Hbs Case

    A customer satisfaction and loyalty measurement program was designed to assess Nortel Network’s responsiveness to the needs of its customer base and the value it delivered to customers, employees and shareholders. This program, started in 1992, was created in response to intensifying competition in the telecommunications industry.…

    • 422 Words
    • 2 Pages
    Good Essays
    Read More
  • Better Essays

    Colgate-Palmolive Keeps the World Smiling
    • 6832 Words
    • 28 Pages

    Colgate-Palmolive Keeps the World Smiling

    Evans, B. (2010, March). Are tech m&a kings oracle, ibm, cisco, and hp too big to innovate? InformationWeek,(1261), 22. Retrieved May 26, 2010, from Platinum Periodicals. (Document ID: 2005844901).…

    • 6832 Words
    • 28 Pages
    Better Essays
    Read More
  • Powerful Essays

    The Strategic Gains from Horizontal Integration and Diversification
    • 13514 Words
    • 55 Pages

    The Strategic Gains from Horizontal Integration and Diversification

    The acid test of competitive success is the ability of the firm to generate cash flow for the shareholders in the long run. Yet the successful firm ultimately runs into barriers defined by the natural limits of expansion in its chosen domain. Some companies, such as General Motors, Toyota, Boeing and Microsoft, have remained focused due to the unique nature of their business. GM, Toyota and Boeing are in large fixed cost businesses with little relevant spillovers and mature demand, while Microsoft operates in a market still in the growth phase of its industry life cycle. It would hardly pay for Microsoft to abandon the growing software market to move on to some other venture. However, even these companies have ‘diversified’ themselves over the years. Boeing moved from military applications to civilian airline production after World War II. Although done at different points in time, both Toyota and GM have expanded their model base and moved production to new markets. Microsoft moved out of operating systems into spreadsheets, word processing and database management programs, and is now expanding its presence in the network architecture market. At some stage in the firm’s development, management face a critical decision: do we pay the net cash flows out as dividends or do we seek new investment opportunities? Rarely, if ever, does management make the decision to liquidate the company, believing that new investment opportunities always exist. Some experts view this as little more than managerial hubris sustainable only by…

    • 13514 Words
    • 55 Pages
    Powerful Essays
    Read More
  • Good Essays

    Cox Communications Case Study
    • 924 Words
    • 4 Pages

    Cox Communications Case Study

    By mid-1999, Cox Communications, majority-owned by the Cox family, was about to take its first step into a planned $7Bn acquisition spree, which would let it stand as a top-tier communication sector firm in the coming years. In a rapidly consolidating industry, where competitive advantages derived mostly from scale, competition for acquisitions was fierce, pushing valuations higher often to thresholds which would arguably be justifiable by the target’s intrinsic value. As the opportunity to acquire Gannett Co. arose, Cox felt it was a strategic opportunity which could not be passed over. At an expected auction price of $2,7Bn, our valuation analysis has proved it to be indeed greatly overpriced. That was, however, the competitive scenario Cox would most likely be facing in the future and the excessive prices were a “necessary evil” if Cox was to meet its founding family ambitious growth objectives. This acquisition, however, could significantly constrain Cox’s future financing capacity, requiring a financing structure that avoided hampering the strategic development of Cox, while abided by specific requirements. A comprehensive financing strategy had to address three main objectives: (1) need for flexibility in order to ensure adequate future financing capacity; (2) the maintenance of the current shareholder structure – an essential requisite for the Cox family, while (3) maintaining Cox’s investment-grade credit rating status. An adequate balance of these objectives left little room for managerial maneuver, as plain vanilla equity and debt instruments seem insufficient to meet such broad goals. Yet, a different hybrid security issuance – FELINE Income PRIDES, merging the most suitable…

    • 924 Words
    • 4 Pages
    Good Essays
    Read More
  • Best Essays

    Hp Cisco
    • 4787 Words
    • 20 Pages

    Hp Cisco

    One of the first challenges facing Mr. Heal and Mr. Thomas is the notion of strategic vs. tactical decisions. On page three of the case, we learn that in February 2002, Mr. Thomas met with HP’s then worldwide alliance manager for Cisco, Fabio Fontana, and decided that the “alliance would benefit if HP become more strategic while Cisco became more tactical.” Further discussion on page three tells the reader that strategic refers to a firm achieving long term goals while tactical refers more to achieving short-term goals. In fact, the case mentions that “over 70% of the team’s (Cisco) success (was) measured by factors other than near-term revenue.” (Page 3)…

    • 4787 Words
    • 20 Pages
    Best Essays
    Read More
  • Good Essays

    Resource base view - Huawei
    • 1019 Words
    • 5 Pages

    Resource base view - Huawei

    As an accomplished chess player, Huawei, the Chinese telecommunications equipment giant is planning to do a smart move again. The likely acquisition of Nokia seems to be part of a structured strategy that they have been implemented since 2003 when they started to diversify toward other units business. Therefore, this essay will analyse from the resource-based view the different strategic moves that this company has implemented in order to strengthen its handsets business unit and the implications that would entail the acquisition of Nokia, if it was to materialize.…

    • 1019 Words
    • 5 Pages
    Good Essays
    Read More

Related Topics