FABLE: The CEO Who Didn't Look Over The Fence (Mannerisms)

FABLE: The CEO Who Didn't Look Over The Fence

There was once a CEO who asked his CFO: "How much market share do I need to support my investment in this product line". The CFO replied: "Ten per cent".

"In that case", said the CEO, "raise enough money so that I can build enough capacity to supply ten per cent of the market'".

And the CFO and CEO executed their strategy but, unbeknownst to them, the CEO and CFO of each of their eleven competitors had the same conversation, came to the same conclusion, and executed the same strategy.

And the DRAM market was over-supplied by 20 per cent, and prices fell, and the 12 CEOs lost their shirts.

MORAL: Look over the fence and see what your neighbour is doing

Posted by David Manners on October 23, 2008 4:24 AM | Permalink|

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This page contains a single entry from the blog posted on October 23, 2008 4:24 AM.

The previous post in this blog was Are Foundry Prices Going To Rise?.

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Mannerisms

Ruminations on the semiconductor industry from David Manners