marketing
Competitive Moat
Sustainable competitive advantage that's hard for competitors to copy - the 'moat' protecting your business.
Definition
Warren Buffett's metaphor: the wide, deep moat that protects a castle from attackers - in business, the sustainable competitive advantage that prevents competitors from eroding your position. Service business moats include: niche specialization, deep IP and playbooks, network effects (more users = more value), brand reputation, switching costs, proprietary tools. Without a moat, you compete on price - and price competition is a race to the bottom.
In your business
- →Identify 1-2 moats you can credibly build - depth beats breadth
- →Invest in deepening moats over time, not just defending the current state
- →If you can't name a moat, you compete on price by default - that's a losing game