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

To: sditto who wrote (31234)	9/8/2000 11:26:42 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

>> Can there be a Chimp without a Gorilla? I believe so. >> What are some examples of strong Chimps in a Gorilla-less market? Polaroid... San Disk... >> Is the investment potential of a Chimp in a Gorilla-less market (if such a thing exists) really more attractive than a King? I'd take the Chimp with the patents as the lower risk/reward play. >> What criteria do you use to distinguish between primate or royalty structures in Gorilla-less markets? Patents that create a high barrier to entry. jmho, uf

To: sditto who wrote (31234)	9/8/2000 11:44:17 AM
From: Mike Buckley	Read Replies (5) \| Respond to of 54805

sditto, Thanks for referring me back to TRFM. However, on pp. 62 of TRFM in the section titled A Zoological Exception: Gorilla-less Tornadoes, Moore describes the end result as being royalty rather than primate... Though I can appreciate why you came to that conclusion, I think the authors' writing is ambiguous enough that I'm not certain of their intent. Not knowing exactly their intent (at least not for me), we might have to ask Bruce or someone else who follows the list-serve to ask Moore about that. My thinking is that there are primate markets in which proprietary architectures exist that are gorilla-less by virtue of the fact that no single company exercises control of a de facto standard. More important, no de facto standard exists. But because proprietary architectures are at the core of the many companies competing in the marketplace, it's still a primate game being played rather than a royalty game. To use a sports analogy, just because some sports can end in a tie game doesn't mean the type of game is different. Similarly, just because a gorilla is not and never will be declared doesn't mean a primate game based on proprietary architectures isn't being played. I would characterize the removable disk drive market that way as just one example. That's in contrast to the PC box-maker market in which there are no proprietary architectures of any kind, making it a royalty game. For me, to say that a primate game doesn't exist just because there is no gorilla would be tantamount to saying that just because there is no King (with a marketshare that is twice its nearest competitor) there is no royalty game being played. Neither thought process makes sense to me. Now, have I answered your questions? I dunno. Let's review them. Can there be a Chimp without a Gorilla? Yes. I hope my stuff above explains why. What are some examples of strong Chimps in a Gorilla-less market? I'm not very good at that off the top of my head, so I'll limit the list to the one above rather than get into trouble adding more without adequate thought. Because I don't follow chimps, I don't know if any of them are strong. Is the investment potential of a Chimp in a Gorilla-less market (if such a thing exists) really more attractive than a King? Probably not. This is not my area of expertise because I try to invest only in Gorillas and Gorilla candidates, not chimps with no potential for gorilladom nor Kings. Even so, I'll comment that it probably depends on the size and strength of the tornado combined with the staying power of the competitive advantages a particular company has. As an example, I can't think of a single chimp in a market with or without a gorilla that is probably as good an investment as JDSU, a huge king in a monster tornado having tremendous, long-lasting competitive advantages. Remember, though, that that's quite a bold statement coming from someone who acknowledges little expertise in the subject. What criteria do you use to distinguish between primate or royalty structures in Gorilla-less markets? The primate game involves proprietary architectures. The royalty game doesn't. By the way, I really like your distinction of referring to a gorilla-less game of proprietary architectures as a primate game. It shows that it's still primate structures at work though the gorilla is lacking. As I hope you can tell, I'm enjoying the discussion! --Mike Buckley

To: sditto who wrote (31234)	9/8/2000 6:28:16 PM
From: Pirah Naman	Read Replies (1) \| Respond to of 54805

Can there be a Chimp without a Gorilla? This might be easier to see if we look earlier in the cycle. Consider the idea of buying a basket of gorilla candidates - if we do this, we are buying multiple chimps. No gorilla yet. As we sell off the losers, our remaining chimps get more and more dominant. We won't get a gorilla unless one of those chimps becomes the standard. That might not happen, so we could have the primate game, with each chimp controlling its own POA but none of them dominant enough to become the industry standard. - Pirah