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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: jmanvegas who wrote (12098)12/5/1999 5:27:00 PM
From: 100cfm  Read Replies (1) of 54805
 
J
i don't think price should be part of the criteria in determining an entry point. to me it is more of event driven decision. in such that the merger between uniphase and jds would have been the indicator. this would have required some intimate knowledge of photonics to determine that the combined technologies would create a one of a kind product(an active/passive module as cha2 indicates) which leads to control over the value chain and gorilla like margins. as another example of a good entry point would be the gemstar tvguide merger announcement. this being sort of low tech it was easy to determine that the combined companies would create a near monopoly type product.

also,i don't think margins have been given the proper wieghting in the current gorilla vs king discussions. moore plainly states that the gorilla enjoys far superior margins then it's monkey competitors. gorillahood and margins go hand in hand. one cannot exist without the other. margin is the indicator to what extent a company controlls their market/value chain. low margins=little control and therefore no gorilla power.
without high margins or the potential for higher margins who cares about any of the other factors.

therefor with regards to jdsu the questions remain.
did the merger enable jdsu in fact to creat a one of a kind product. does that product give them gorilla like margins.

in order to screen for gorillas we need a checklist each candidate must be put thru and net margins should be very high on the list

100
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