G&K stands for Gorilla & King. Specifically, a G&K Analysis attempts to determine whether a market is a gorilla game or a royalty game, and how far it is along the Technology Adaptation Life Cycle (TALC). Also, classification of the players in the market into Gorilla/Chimp/Monkey, King/Prince/Serf is attempted.
The best example of a gorilla game is that of PC operating systems. The gorilla is MSFT with Windows.
The best example of a royalty game is the PC market. The current king is Dell. Compaq is currently a prince.
The difference is that a gorilla game is based on a proprietary open architecture with high switching cost. In the beginning, several incompatible standards exist and compete for mainstream adoption. Whichever company controls the eventual winning standard can subsequently manipulate it in order to keep the competition off-balance (like MSFT has done with the Windows API) and that protects it from pricing pressures. Moreover, many other companies, as a part of the gorilla's value chain, actually need the gorilla to succeed since their products are built around the gorilla's architecture. This means that, once established the gorilla will have an incredibly difficult time failing. Customers who commit to the gorilla's architecture will switching to a competitor's because of the high switching cost, thus preserving market share. Competitive advantage in a gorilla game is therefore permanent.
In contrast, a royalty game has no proprietary standard or low switching cost and thus is ruled by execution. There is no way to "force" customers into using your product. (That is why people hate MSFT and don't hate Dell.) A king will properly have at least twice the market share of its nearest competitor (the prince). If the king falters (Compaq used to be a king) the prince, through superior execution (Dell used to be a prince) can subsequently become king. Thus competitive advantage in a royalty game is transient.
The only thing that can unseat a gorilla is an innovation which renders the gorilla's architecture obsolete. A king can be unseated by a prince at any time. This is why we prefer to invest in gorillas. Kings can still be great investments, by the way, but require much more active monitoring.
References include:
The Gorilla Game, Inside the Tornado, Crossing the Chasm by Geoffrey Moore, et al.
Hope this helps!
M |
