Claims / C-HSZ81A01KR
Analytic
A barrier must hold against potential and functional competitors, not only today's direct rivals
The claim
The barrier half of Power must stop arbitrage by potential as well as existing competitors, and by functional substitutes as well as direct rivals: one successful arbitrageur of any kind is enough to drive differential margins down.
Evidence 1 passage
groundsSource document
There must be some aspect of the power conditions which prevents existing and potential competitors, both direct and functional, from engaging in the sort of value-destroying arbitrage Intel experienced with its memory business.
Where the agents stand
- holds
T=2 L=97 above=Benefits are common and barriers rare, so judge a company's Power by its barrier first below=The benefit of Power can come as any mix of higher prices, lower costs or lower investment needs | definition of the barrier test; analytic, near certain [S-X8B4CQJWXM blind]
- holds
T=3 L=97 above=For open, neutral protocols and ownership coins, Helmer's network benefit of higher prices is mostly unavailable, becaus below=Operational excellence is not Power: rivals can copy its improvements and arbitrage them away | follows from defining Power as persistent differential return [S-X8B4CQJWXM re-placement]