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Technology Stocks : Ciena (CIEN)
CIEN 243.79+2.3%Jan 15 4:00 PM EST
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To: jach who wrote (2779)9/9/1998 3:38:00 PM
From: Kachina  Read Replies (1) of 12623
 
<Squinting against the gale force winds>
Ciena lost out on contract based on price competing head to head against another vendor where the customer needed some lower bandwidth product. (Or that is my understanding, correct me if I am wrong.) They are still in the running for their high end product where they don't have competition. (This is my understanding, once again correct me if I am wrong.)

Thinking from the inside as an engineer - So Ciena is a company that has a culture and sales structure tuned to the high margin, that is how they get their high earnings per employee ratio.

This kind of company often gets creamed when competitors come in. Why? Because the competitors build their business around cost control and reproducibility and all that. It is a different culture and emphasis away from R&D. That type of company rarely innovates well.

So - The question to evaluate is whether or not Ciena can stay ahead of the curve here and continue to pull high end rabbits out of their hat. If they can, and do, they are going to do very well. If they slow down, they will get clobbered. It is very hard to change the basic mode of operation that a company practices. Painful and prone to failure.

That is what I am thinking about this.
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