SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Gorilla Game Investing in the eWorld
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Teflon who wrote (357)9/21/1999 6:13:00 PM
From: StockHawk  Read Replies (3) of 1817
 
A Godzilla Game Cheat Sheet (taken from chapter 12 of The Gorilla Game)

The Internet is a "dramatically discontinuous innovation". It will be used to make existing institutions more productive and in some cases to "do away with them altogether." A "global reengineering of inefficient markets."

In looking at the business-to-consumer market the book divides people into shoppers (those who love to shop) and buyers (those who hate to shop). For the buyers "the Internet is a godsend" and for the shoppers, who can browse widely and engage in communities of like-minded individuals "There has never been anything remotely equivalent to the power and scope of this offer"

But, "For pure opportunity to reengineer inefficient markets, ...there is nothing to compare with the business-to-business sector."

They see a class of businesses which they call "transaction exchanges" that will establish "many- to-many" markets. eBay is using this model for sales between individuals. Other companies will use this model for sales between businesses. The relationship based one-to-one selling of brokers and the like is in trouble.

The book identifies 7 competitive advantages that transaction service business can have. How they measure up with regard to these advantages is a key to evaluating who the leaders will be. The 7 competitive advantages are:

1. Switchboard/exchange position: the advantage enjoyed by companies that position themselves as transaction brokers (think of eBay or Priceline), especially in business-to-business.

2. Brand: the ability to attract new customers (Amazon or Yahoo or, again eBay)

3. Value chain position: Ability to control access, and to derive revenue from it. Might be called portal power. (AOL or Yahoo or VerticalNet).

4. Specialization: very specific niche marketing is possible on the Internet and a site can develop a community of participants. (VerticalNet).

5. Stickiness: the ability to keep a customer at a site with the goal of turning visits into sales.

6. Low-cost business design: A double edged sword - lower cost structures allow lower prices which draws customers, but as low price leads to commoditization no one can earn superior returns.

7. Experience curve: The ability of a early mover into a space to leverage their experience into competitive advantages (E*Trade).

Not all the 7 have equal weight. The first is most important, the last two least important.

Some final notes: Godzilla investing is entails much more risk than playing Gorilla games. Also, it is much better to select individual stocks based on the 7 criteria than to buy baskets of stocks, as is done in Gorilla games.

StockHawk
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News