NEC signals significant retreat

Stephen Withers
Thursday, 15 January 2009 10:45

IT Industry - Strategy

NEC has announced a major scaling back - sorry, "strategic restructure" of its Australian operation. The company will completely leave the retail market.

The NEC brand is associated with a wide range of consumer products, including televisions, projectors, DVD recorders, fridges, washing machines, microwave ovens, and air conditioners.

The company previously ran a generally well-regarded series of TV ads featuring 'Mr Okimura' a fictitious NEC employee shown in situations such as surf lifesaving. Like Okimura, NEC was said to be "perfectly at home in Australia."

But no longer - the company is preparing to cease most of the products that took its logo into Australian homes.

NEC Australia will focus solely on its ICT and network communications business, with a greater emphasis on service and consultancy.

The retail product line will be withdrawn with effect from March 1, though warranties and extended support agreements will be honoured.

Company officials say there will be around 200 retrenchments - a mix of voluntary and compulsory redundancies - and that job losses will not be restricted to the retail division.

What's the motivation for the cutbacks, and what activities will be (relatively) unscathed? Please read on.