Businesscalendar_todayLast updated: Apr 2026
What is Competitive Moat?
/ˈkɒmpɪtɪtɪv moʊt/
A structural advantage that makes it difficult for competitors to catch up or overtake a company, even if that competitor has more resources or better technology. Named after castle moats, which protected against invasion—stronger moats mean the company's market position is more defensible.
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Everyday Example
Apple's moat is its ecosystem: once you own an iPhone, Mac, and Apple Watch, switching to Android becomes expensive and inconvenient, so Apple keeps customers locked in.
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“Investors like Warren Buffett obsess over moats—he favours companies like Coca-Cola (brand loyalty) and Berkshire Hathaway itself (interlocking financial relationships) specifically because their moats protect profitability for decades.”
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Did you know?
The term 'moat' was popularized by investor Warren Buffett in the 1990s as a metaphor for durable competitive advantage, and has since become standard vocabulary in business school and venture capital.
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Key Insight
The best businesses don't compete on price or features—they build something competitors can't easily copy.
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