3 ms·

It's not 'China'. It's new competitors that blew them out of the water, like Apple and Samsung did to Nokia, for the reasons I listed in my previous comment.

ineedasername 8y ago
Except a major one of those new competitors appears to have been a Chinese company that benefited from misappropriated trade secrets and IP. As I said, more than one reason for a failure of this scale. As an example, Nortel might have emerged from bankruptcy intact, as many companies manage to do, had it not been for the financial collapse of 08'-09'. That downturn made it more difficult for Nortel to get competitive prices for the assets it was shedding in an attempt to emerge from bankruptcy. Prior to that, a contributing factor in the decision to declare bankruptcy in the first place was that it could not easily service its debt and retain enough working capital to support operations. It had plenty of cash on the books, but nearly all of it was in other countries and repatriating it presented very thorny problems. [0] As I said, no one simple reason. [0] http://www.ottawacitizen.com/business/Part+Last+things+first+Bankruptcy+protection/2164807/story.html http://www.ottawacitizen.com/business/Part+Last+things+first...
- entity345 8y ago
  "misappropriated trade secrets": I read that as Nortel was poorly managed and handed those on a plate. That's business, if you're not smart others will be more than happy to abuse you. In this case Nortel essentially asked a competitor to manufacture their products from them... What could possibly go wrong? Your last point regarding cash is also an example of poor management in my book. It's too easy to always find scapegoats.
  - ineedasername 8y ago
    By misappropriated trade secrets I'm referring to the fairly well documented hacking of Nortel, not the willing hand-over of IP. [0][1][2] I also think it's simplistic to say their cash issue was purely an issue of poor management, as it resulted in part due to the unforeseen financial collapse at the time. Of course you can try to define both of those as "poor management" as well: Nortel should have protected itself better from hackers. Or they should have been prepared for a financial collapse on a scale not seen for 80 years. Under this type of reasoning, any problem at all for any company anywhere could be defined as "poor management" and that all companies fail from poor management. The problem is that this overly simplifies rather complex issues. It's a bit like saying "Everyone dies of heart failure." Because in every instance of death the heart has stopped beating. In every instance of a company failure, its managers failed to act in a way that might save the company, therefore management was poor. It neglects the difference between proximate causes and distal causes. It ignores that, for example, the heart may have stopped because a bullet hit an artery and a person lost too much blood. Back to companies, it ignores the difficult questions of "Why & How did management fail? What, if anything, could they have done differently given the knowledge they had at the time? Would those things have been enough?" [0]https://www.washingtonpost.com/business/technology/report-chinese-hackers-breach-nortel-networks/2012/02/14/gIQApXsRDR_story.html?utm_term=.5e0a03710568 https://www.washingtonpost.com/business/technology/report-ch... [1]https://www.theregister.co.uk/2012/02/15/nortel_breach/ https://www.theregister.co.uk/2012/02/15/nortel_breach/ [2]https://www.cbc.ca/news/business/nortel-collapse-linked-to-chinese-hackers-1.1260591 https://www.cbc.ca/news/business/nortel-collapse-linked-to-c...
    - entity345 8y ago
      Mike Z, is that you?
      - ineedasername 8y ago
        Nope :) I have nothing to do with the comms industry directly. I just really enjoy (to the extent that's the appropriate word) the puzzle that is massive organizational failure. It's a fascinating topic. Sears & Toys R Us are two more recent examples that have enthralled me. The road from massive mult-billion dollar corporation to defunct is filled with branch points. Any one of them might have avoided or delayed disaster. You're correct of course in a general sense that mismanagement is a frequent component. In my opinion though, that may be a sufficient condition in many cases, but it's not always a necessary condition. A great example, maybe my favorite, where poor management was really a primary issue was the death of Circuit City. There as they faced increasing competition from internet sales, Best Buy, and other competitors, they sought to cut costs in part by firing the highest paid floor sales staff, replacing them with lower paid, usually minimum wage workers. Some of those higher paid workers may have been dead weight, but on the whole they represented the most experienced, most knowledgeable floor staff best able to help customers (or more cynically sell them on stuff they didn't need with techno-jargon). In any case, it was a very short jump from there to revenue falling off a cliff, and bankruptcy. So poor management, absolutely foreseeable, directly caused their downfall. Though even there the poor management was partly a result of externalities like increased online shopping putting previously non-existent pressure on them.
        StillBored 8y ago
        I think the sears story's most important point is that they canceled their general catalog sales in 1993, the year before amazon was founded. So 100% lack of foresight, but the real screw-up was by 1997 or so everybody and their dog was trying to sell everything under the sun online. Where was sears, still stubbornly refusing to acknowledge that internet sales were just the modern version of the business model that worked immensely well for sears. How much would it have cost them to resurrect some form of mail-order/web forms read some business journals about Dell's order and deliver model and start making some side bets and deals with UPS/fedex?

ineedasername 8y ago

Except a major one of those new competitors appears to have been a Chinese company that benefited from misappropriated trade secrets and IP. As I said, more than one reason for a failure of this scale. As an example, Nortel might have emerged from bankruptcy intact, as many companies manage to do, had it not been for the financial collapse of 08'-09'. That downturn made it more difficult for Nortel to get competitive prices for the assets it was shedding in an attempt to emerge from bankruptcy. Prior to that, a contributing factor in the decision to declare bankruptcy in the first place was that it could not easily service its debt and retain enough working capital to support operations. It had plenty of cash on the books, but nearly all of it was in other countries and repatriating it presented very thorny problems. [0] As I said, no one simple reason. [0] http://www.ottawacitizen.com/business/Part+Last+things+first+Bankruptcy+protection/2164807/story.html http://www.ottawacitizen.com/business/Part+Last+things+first...

entity345 8y ago
"misappropriated trade secrets": I read that as Nortel was poorly managed and handed those on a plate. That's business, if you're not smart others will be more than happy to abuse you. In this case Nortel essentially asked a competitor to manufacture their products from them... What could possibly go wrong? Your last point regarding cash is also an example of poor management in my book. It's too easy to always find scapegoats.
- ineedasername 8y ago
  By misappropriated trade secrets I'm referring to the fairly well documented hacking of Nortel, not the willing hand-over of IP. [0][1][2] I also think it's simplistic to say their cash issue was purely an issue of poor management, as it resulted in part due to the unforeseen financial collapse at the time. Of course you can try to define both of those as "poor management" as well: Nortel should have protected itself better from hackers. Or they should have been prepared for a financial collapse on a scale not seen for 80 years. Under this type of reasoning, any problem at all for any company anywhere could be defined as "poor management" and that all companies fail from poor management. The problem is that this overly simplifies rather complex issues. It's a bit like saying "Everyone dies of heart failure." Because in every instance of death the heart has stopped beating. In every instance of a company failure, its managers failed to act in a way that might save the company, therefore management was poor. It neglects the difference between proximate causes and distal causes. It ignores that, for example, the heart may have stopped because a bullet hit an artery and a person lost too much blood. Back to companies, it ignores the difficult questions of "Why & How did management fail? What, if anything, could they have done differently given the knowledge they had at the time? Would those things have been enough?" [0]https://www.washingtonpost.com/business/technology/report-chinese-hackers-breach-nortel-networks/2012/02/14/gIQApXsRDR_story.html?utm_term=.5e0a03710568 https://www.washingtonpost.com/business/technology/report-ch... [1]https://www.theregister.co.uk/2012/02/15/nortel_breach/ https://www.theregister.co.uk/2012/02/15/nortel_breach/ [2]https://www.cbc.ca/news/business/nortel-collapse-linked-to-chinese-hackers-1.1260591 https://www.cbc.ca/news/business/nortel-collapse-linked-to-c...
  - entity345 8y ago
    Mike Z, is that you?
    - ineedasername 8y ago
      Nope :) I have nothing to do with the comms industry directly. I just really enjoy (to the extent that's the appropriate word) the puzzle that is massive organizational failure. It's a fascinating topic. Sears & Toys R Us are two more recent examples that have enthralled me. The road from massive mult-billion dollar corporation to defunct is filled with branch points. Any one of them might have avoided or delayed disaster. You're correct of course in a general sense that mismanagement is a frequent component. In my opinion though, that may be a sufficient condition in many cases, but it's not always a necessary condition. A great example, maybe my favorite, where poor management was really a primary issue was the death of Circuit City. There as they faced increasing competition from internet sales, Best Buy, and other competitors, they sought to cut costs in part by firing the highest paid floor sales staff, replacing them with lower paid, usually minimum wage workers. Some of those higher paid workers may have been dead weight, but on the whole they represented the most experienced, most knowledgeable floor staff best able to help customers (or more cynically sell them on stuff they didn't need with techno-jargon). In any case, it was a very short jump from there to revenue falling off a cliff, and bankruptcy. So poor management, absolutely foreseeable, directly caused their downfall. Though even there the poor management was partly a result of externalities like increased online shopping putting previously non-existent pressure on them.
      - StillBored 8y ago
        I think the sears story's most important point is that they canceled their general catalog sales in 1993, the year before amazon was founded. So 100% lack of foresight, but the real screw-up was by 1997 or so everybody and their dog was trying to sell everything under the sun online. Where was sears, still stubbornly refusing to acknowledge that internet sales were just the modern version of the business model that worked immensely well for sears. How much would it have cost them to resurrect some form of mail-order/web forms read some business journals about Dell's order and deliver model and start making some side bets and deals with UPS/fedex?