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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (2710)	10/14/1998 3:15:00 PM
From: mauser96	Respond to of 4509

Chuzzelwit... I think that there may not be an exact word to describe the relationship of Coke to the cola market. Most of the generic colas have improved to the point that they are almost the same as Coke. Nevertheless at the same price most people buy Coke. Pepsi and generics have been able to force down the price of Coke to the point that it has little profit, so in this sense the market is acting like a commodity. Nevertheless, as you point out, it isn't a commodity like milk. Even milk can sometimes not be a 100% commodity. I once lived in an area where one farm took extreme care about lactbacillus content in milk, so their milk didn't go sour as soon as the others,so they were top sellers. Paper sounds like a commodity, but Great White has established a brand name in copy paper, it jams less than other papers, so I look for it by name. Perhaps we need a new word, or should categorize by weak or strong commodity markets, or use terms like "semi-commodity". In any case IMHO it will be many years before the competitors in ERP have to distinguish themselves mostly by advertising . Since they are such complex products they will never reach the cola stage. However, somewhere down the line, as the products in ERP become more mature, pricing will become more important and profit margins will fall. Thanks for the nice discussion. Your comment about commodity talk surfacing mostly in market downturns is very interesting. It's been so long since we have had a bear that one tends to forget that glasses suddenly change from half full to half empty...<g>