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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 1:50:00 PM
From: jerryriti  Read Replies (1) of 54805
 
>The power of the gorilla is based on its control over a value chain. The authors go on to describe how this comes about - proprietary open architecture along with high switching costs.(see p.52. revised edition) But what if there is another means to the same end of control over the value chain? If a company controls the value chain, no matter how they achieve that end, would that qualify them for gorilla status?

IMO you raise an excellent point! I found my way to the G&K thread after having been taken to task for indicating on the AFFX thread that AFFX had gorilla-like characteristics and being challenged vis a vis its proprietary technology(I expect they may have such a position but not being a molecular biologist, it is far from easy to make that determination. May be decided in the courts but that is another matter)! I recanted my description of AFFX having gorilla characteristics upon my re-reading of Moore's work and his noting, "The whole combo-a proprietary open architecture with high switching costs-is the formula for gorilla power, assuming the company is successful in assembling the partners needed for a working value chain around this architecture, and the market for that value chain goes into hypergrowth(p.52, revised edition)." It was through the brief discussion on the AFFX thread that I found my way to the G&K thread where the posters maintain stringent criteria for inclusiveness but I have found myself wondering whether those criteria should be considered a bit more elastic when viewing a company that seems destined to have a very large degree of control over a value chain which seems poised for hypergrowth.Perhaps, the title, "Probable King" should suffice and that would conclude the discussion! Or, this may be a valid theoretical issue based on the belief that there may be more than one way to achieve control over the value chain than via Moore's "whole combo." IMO an excellent question that has been raised and I hope it prompts some discussion!
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