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Technology Stocks : Intel Corporation (INTC)
INTC 37.24-2.8%Nov 6 3:59 PM EST

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To: Dave who wrote (153459)1/2/2002 12:42:09 PM
From: GVTucker  Read Replies (2) of 186894
 
Dave, RE: market share

This reminds me of the great debate that was going on when I was in business school in the Dark Ages of the 80's.

Back then, of course, everyone thought that the Japanese system was the King of the Hill forever, just like some who live in Silicon Valley think that the world can't survive a 50% decline in the price of Intel's common stock.

One of the tenets of this Japanese model was that market share was the key, as long as you focused on market share then the profits would eventually follow. Back then, of course, an American manager focused on profits in addition to market share was just too short-term oriented to compete in the new global economy.

I thought that this notion didn't make sense. Particularly absurd to me was the thought that market share based upon price could be retained even when prices rose. We now see a lot of those flaws in the Japanese model. One of those flaws is the notion that profits could be ignored as long as losses were made in the pursuit of market share.

Everything is different now, of course, but everything is the same, too.
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