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Phil,

Determining the strength of a value chain is entirely subjective but well worth looking at. I think the best way to appreciate the strength of a company's value chain or the potential of a currently weak chain that might become stronger over time is to first examine the value chains of Intel, Cisco and/or Microsoft. Once you understand how the strongest of the strong ones have worked so well for so long, you begin to get a good idea about how value chains currently forming inure to the gorilla's benefit.

I don't remember where I read it in the book, but I think of the value chain defined as the following: the customers, vendors and third-party providers who do everything reasonably possible to ensure the success of the gorilla's product because their own success depends on the success of the gorilla.

For a more thorough discussion of how the valuation chain fosters gorilla power, check out pages 48-51 in the revised version of the book.

Hope this helps.

--Mike Buckley
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