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What is an Economic Moat?

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Economic Moat is a term popularized by Warren Buffett that refers to “business’ ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms. The competitive advantage is any factor that allows a company to provide a good or service that is similar to those offered by its competitors and, at the same time, outperform those competitors in profits. An example of a competitive advantage would be a low-cost advantage, such as cheap access to raw materials.

“In business, I look for economic castles protected by unbreachable moats.” – Warren Buffett

 

Sources: Investopedia.com and Morningstar

About Gresham Harkless Jr.

Gresham Harkless is a Media Consultant for Blue 16 Media and the Blogger-in-Chief for CEO Blog Nation. CEO Blog Nation is a community of blogs for entrepreneurs and business owners. Started in much the same way as most small businesses, CEO Blog Nation captures the essence of entrepreneurship by allowing entrepreneurs and business owners to have a voice. CEO Blog Nation provides news, information, events and even startup business tips for entrepreneurs, startups and business owners to succeed.
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