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Technology Stocks : Broadband Communications Technologies
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To: HeyRainier who wrote (20)5/13/1998 12:42:00 AM
From: ftth   of 36
 
Hi Rainier,

Thanks for dropping by the ghost town. Watch out for the blowing
tumbleweeds * * * * * :o).

Now regarding your last post:

<<The big question is: BRCM or ATHM?>>

Answering your question is a bit complicated because there are so many unproven characteristics for these 2 companies. I want to try an approach here that I think should attract some input from the bulls and bears of the Broadcom and @HOME camps.

We'll try to assess each company's business strategy and competitive advantage. Though they are in different industry sub-groups, there are higher-level industry relationships where making some comparisons could prove insightful.

Let's start with the generic industry constraints on profitability:

1. Bargaining power over suppliers
2. Bargaining power over customers
3. Threat of new entrants
4. Risk of substitution by new products

We'll discuss each one of these in turn for the 2 companies. After that, we can start with the examination of the industry competition,
and the company-specific competitive advantages that drive profitability to arrive at an aggregate rating for the suitability of these 2 companies as a parking place for our investment dollars. Sound like a plan?

Having used the products of both companies as a direct customer, I can
speak from personal experience, rather than just from what I've heard or read. This will undoubtedly bias some of my judgements compared to what it would be just from second-hand information, but as much as possible, I will try to keep the biases to a minimum.

Since I expect the analysis will take some time, it's probably best to break this down into a series of posts.

I invite you and any others to take part in this discussion. It is based on the methods outlined in Raymond Suutari's text, Business Strategy and Security Analysis.

dh
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