Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: mtnlady who wrote (15548)	1/18/2000 3:38:00 PM
From: Sam Johnson	Read Replies (1) \| Respond to of 54805

I believe we are talking about the same thing...i.e. "barriers to entry". In one case barriers to entry is controlled through technology/patents (e.g. qcom) and is easy to 'see'. Barriers to entry that is created through market/pipeline/infrastructure dominance is tougher to call exactly when the 'king' just took over the jungle and controls (not coexists with) the competition...(e.g. JDSU, VRTS). We are in agreement. Barriers to entry is key. mtnlady, I'm going to disagree here. Barriers to entry are important, but not the key. I think it still goes back to proprietary open architecture with high switching costs. That allows the gorilla to control the value chain in a way that a (possibly temporary) kinglike dominance of marketshare can't sustain otherwise. The gorilla can then keep the barriers to entry high, (as by changing its interfaces). It seems that high barriers to entry are an attribute that a gorilla can control easier than a king can. They are important, but they are pale in comparison with having a value chain locked into to the gorilla's architecture. Once the value chain is dependent on the gorilla's architecture, then the gorilla can yank on the barriers to entry and keep them hopelessly high. A gorilla can endlessly manipulate the barriers to entry. I don't believe a king can do that. Sam

To: mtnlady who wrote (15548)	1/18/2000 7:03:00 PM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

mtnlady, I've been following your discussion with Frank. Barriers to entry that is created through market/pipeline/infrastructure dominance is tougher to call exactly when the 'king' just took over the jungle and controls (not coexists with) the competition I understand your point but still disagree. The essence of a Gorilla is that it controls the value chain (suppliers, vendors selling products that add value to the Gorilla's products, and customers). Moreover, the members of the value chain do everything reasonably possible to ensure success of the Gorilla's products. They do so as a matter of survival. Wielding all that power, the Gorilla keeps its competitors off balance and at bay. That's much more power than any traditional barriers to entry approach. --Mike Buckley