Moat

What is a Moat?

A moat is a competitive advantage that protects a company from its competitors, making it difficult for others to replicate its success. The term, popularized by investor Warren Buffett, is used to describe the unique factors that allow a business to maintain a dominant market position. Moats can include proprietary technology, brand loyalty, economies of scale, or regulatory advantages.

Types of Moats

• Cost Advantage: Offering products or services at a lower price due to economies of scale.
• Network Effect: The value of a product increases as more people use it.
• Intellectual Property: Patents and copyrights that prevent competitors from copying innovations.

Related Terms and Concepts

Competitive advantage, barriers to entry, economies of scale, intellectual property