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Strategies & Market Trends : Bowling Alleys and Tornadoes: G&K Hunting Grounds
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To: gdichaz who wrote (91)8/15/1999 6:07:00 PM
From: Mike Buckley  Read Replies (1) of 153
 
Chaz2,

Could GE, IBM or SUNW be considered a gorilla or king in one of its fields and just a simple leader or #2 in others?

Yes, the behemoths certainly are gorillas in certain fields, maybe kings in others, etc., etc. IBM is certainly the gorilla of mainframe computers and Oracle is agreed by most to be the gorilla of database software. Possibly GE is a gorilla or king in one of their many markets.

As investors, I think the real appeal of a king or gorilla is found in companies that are independently focused on a particular market. That gives the investor the biggest bang for his/her buck.

As an example, let's assume IBM somehow becomes the gorilla of front office software. Because it will represent a relatively small portion of IBM's total business the investor won't enjoy the same impact as if Siebel or some other independent provider is crowned.

As another example, GE might be the best managed company in the world and certainly has had stellar growth in its earnings and stock price, but do any of us following this thread really believe GE's earnings or stock price will progress as rapidly as Qualcomm's over the next ten years? Possibly, but highly doubtful.

For others not aware of the definitions, dDon't forget that a king holds twice the market share of the next largest competitor. Being #1 doesn't make a company a king.

--Mike Buckley
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