Strategy at Nvidia: Diagnosis

Faced with the failure of the company's first product and sudden rise of 3dfx, Nvidia reformulated the company strategy. 

Nvidia was formed in 1993 at the time when the industry was alive with the talk about the coming multimedia revolution.  However, at that moment existing audio adds worked with some software and not others.  There was no standard way to compress or display video.   Nvidia's original dream was to be the Sound Blaster of multimedia.  The company's first product, the NV1 was intended to establish a new multimedia standard.  but its considerable audio capabilities were not better than the fast-moving competition's, and its quirky 3-D graphics approach did not catch on.  The NV1 was a commercial flop.

Faced with the failure of the company's first product and sudden rise of 3dfx, Nvidia reformulated the company strategy.  Key inputs came from a temporary technical advisory board made up of both insiders and expert outsiders.  The new strategy was a shape change in direction.  Instead of multimedia, the company would focus on 3-D graphics for desktop PCs.  Instead of the initial proprietary approach to graphics, the company would embrace the SGI-based triangle method.  About the only thing that stayed unchanged was Nvidia's commitment to being a "fabless" chip company, focusing on design and outsourcing fabrication.

ACTION POINT: Identify any "flops", seek counsel inside and out and make changes when necessary.