>> JDSU's control is expressed through many competitive advantages that follow from its business strategy as it achieves critical mass in scientists/engineers and in manufacturing generally, and as it specifically integrates its broad product line into modules of increasing complexity.
Strong forces indeed, but the sum of jdsu's actions don't equate to strength of a discontinuous innovation, and when examined individually, have dangers associated with them.
Major acquisitions as an attempt to corner the market, are dilutive to shareholders' interests as there is a premium beyond the value of the business that must be paid in each case to the current owners. Unless you expect those purchases to be immediately accretive, each represents a set back for some period of time.
Vertical integration is an approach that is dilutive as well, but in a different sense. It takes the companies focus away from core competencies and puts it into more mundane and less profitable areas. I heard Goeff describe this as a flawed approach in a presentation earlier this year.
>> This movement is toward offering a total solution, with all the competitive advantage that end-to-end solutions bring. Moreover, at some point, these modules become complex enough to have an architecture that could become proprietary by patent; some may be already proprietary as process know-how now.
Intersting, but very speculative, Don, and our specialty here is using GG theory for practical advantage. How do you suggest we might test your theory?
uf
btw, has it struck you that optical networking has engendered the same amount of boundless optimism and price-to-vision valuations that were associated with the dot-coms last year? |
