Tek,
Re: Geoff Moore's "Living on the Fault Line" - Revised definitions of Royalty & Primates
Have you noticed that Geoff has somewhat altered his definitions of Royalty & Primates in "Living on the Fault Line", and examples he uses to illustrate them?
It is not a great deal of inconsistency (particularly as it relates to primates which MUST exercise proprietary architectural control of a market), but there is a subtle shift in royalty definition.
In TRFM on page 63, a King is defined as "the market leader with properly two-times lead or better over its closest competitor", and he states that Kings enjoy a number of gorilla-like benefits ... ". He properly refers to Compaq as King of servers but in PC's, Dell is referred to as a Prince (using 1997 market share which is unusual in itself since the revised GG was published in October 1999, and Geoff didn't bother to update from his 18 month earlier version).
In "Living on the Fault Line" (page 172) Geoff defines a King this way:
"The market leader in an open-systems tornado, this company has outexecuted its competition early on and is now enjoying the increasing-return effects of market-share leadership. But unlike gorillas, kings have no proprietary technology to keep customers from exiting or competitors from entering their market. As a result they can always be replaced, and thus the valuations of kings are significantly lower than gorillas."
He then goes on to promote Dell from Prince to King:
"In the PC market, IBM was the original King, then Compaq, and now Dell."
Now to be fair, Dell passed Compaq in PC sales last year, but the distinction of "properly two-times lead or better over its closest competitor", seems to be gone.
In addition all of a sudden the valuations of kings are significantly lower than gorillas.". I'm not sure that this is proper when I look at the examples of JDSU, EMC, or NTAP.
On the other hand he seems to be as convinced that proprietary control of architecture remains as important as ever in determining the competitive advantage that accrues to a gorilla.
FWIW, I was wondering if you had noted Geoffs subtle changes, and attach any significance?
- Eric -
PS: There has been a lot of moaning, groaning, and gnashing of teeth, about the drop in valuation of QCOM lately. An obvious alternative to QCOM for one who wishes to play wireless would be NOK. Each time I consider playing NOK (again) to supplement QCOM, in the broad sector of wireless as opposed to the narrower category of CDMA, I remind myself that NOK is King of handsets, and that fame is fleeting for Kings, (particularly in handsets since MOT was King not so long ago) and not a market leader in anything else they dabble in. I further remind myself that I like QCOM better at its depressed price than NOK at its all time high so am not about to swap any QCOM for NOK. |
