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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Sam Johnson who wrote (12038)12/5/1999 7:59:00 AM
From: 100cfm  Read Replies (2) of 54805
 
<The power of the gorilla is based on its control over a value chain.>
Sam, just my 2 cents based on my understanding of the GG and lack of understanding of jdsu's products, i would ask the following questions

1. Is jdsu doing the designing out of other components and incorporating them directly into their components. Or is lu, nortel and etc. doing the designing out of jdsu's components in their fianl products. if the former is the case then jdsu is exerting control of the value chain, if the latter be the case then jdsu is not in control of the
chain and therefore cannot be a gorilla.
2. are jdsu's products a commodity type item, or do they command premium margins due to their superior design and performance. if so thats a strong gorilla indication.
3. is there a continuing need for increased performance/capacity for jdsu's products. whereby jdsu can stay one step ahead of it's competition. part of intel's problem of late has been the lack of need for super fast/super powerful processors in the everyday home/work pc.
who really needs a p111 @700mhz. when the killer app comes along that requires that as a minimum then intel will resume its complete dominance and remove any doubt of it's gorillahood.
the need for ever better performing components increases the control over the value chain, whereas the opposite is true and allows weaker competition to catch up. this is a must requirement for them to be considered a gorrilla.

i would base a decision on king vs gorilla according to the answers to the above questions. unfortunately i do not have the skill and product understanding necessary to answer those questions. but thats why we joined SI, to get help in areas where we lack. i would very much like to be sure whether i am investing in a gorilla or a king going in. it determines how much torque i put into my grip.

regards
100
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