Glenn, a book that revolutionized my thinking re: technology investing was The Gorilla
Game by Geoffrey Moore, published 1998. If you have not yet read it, I cannot
recommend it highly enough.
Robert,
I have not read it and will order it tonight from Barnes and Noble. It sounds like a good read but I likely will not read much until January due to the holidays. I will try, however.
At any rate, as gorillas grow up, they can begin to invade the established turf of another
gorilla - the Java war between Microsoft and Sun, or Microsoft adding networking
capabilities to NT as an invasion of Cisco's turf. I see the battles shaping up re Amazon
vs. Walmart, and Amazon vs. Barnes and Noble, as being battles between gorillas as they
invade each other's established turfs.
I agree with you here too. A little off topic is Cisco being invaded by Lucent and Northern Telecom.
Interestingly, Moore does not believe that any Internet companies can attain true gorilla
status - for the very reasons that many on this thread are bearish re: Amazon's long-term
prospects. There is no way for a company to maintain a dominant competitive advantage
long term. Netscape in browsers, Real Networks (perhaps?) in streaming technology,
EBay (perhaps? in online auctions, or Amazon (perhaps?) in books/online retailing or
however you what to characterize its evolving focus.
I would really have to have read the book before I could make an intelligent comment on this. I would have to read the author's reasoning. It has been been proven over the years that in traditional retailing that maintaining a competitive advantage never lasts very long. A good example is Sears that was the US tope retailer for quite some time. They made some errors in competing with their competition and lost that advantage. The problems became so acute that Sears sold Sear's Towers for more operating cash. Sears eventually realized the consumer wanted name brands so started their slogan "Name Brand Central." In the discount sector was Kmart which was an evolution Kresgies (sp). Everyone had heard of the blue light special. The comes Walmart with broader selection and better "service" in the sense they had someone there to help the shopper locate the product they wanted. Their key customer then was men because men wanted to go to a store, go right to the product, take it off the shelf and pay for it. Walmart has evolved from there and likely have an equal number of male and female shoppers. Kmart still does not get it. They are coming back from their problems but they are still missing the "service" that can be done at minimum wage. Their come back is due a lot to small stores leaving the market and more consumers to be split by Walmart and Kmart. There will be some firm that will surpass Walmart. I clearly do not know what or when it will be but it will happen.
The bottom line is adjusting to change. If a retailer does not "listen" to their customer's needs, they will die. The customer's needs change.
Glenn |
