,i> Also, it seems to make sense to me that better-capitalized competitors, coming from "the top down" have better success at market penetration, rather than from "the bottom up,"
Ranier, actually that is almost never the case, as discussed in the most excellent book of 1997, "The Innovators' Dilemma". It goes against the better judgement of the dominant player in a product niche to market down, because, basically, to do so means lowering margins and producing product that the incumbent customers do not want. But it is natural for a competitor to explore up market, as their margins can improve and they have no customers in that market to advise them of what they perceive as desired in a new product, and they are willing to develop new markets for their innovations. The disk drive industry is a prime example of this dilemma in action. It's a long story, so read the book. It should be required reading for tech investors, imo. |
