Wide economic moat,
Definition of Wide economic moat:
A wide economic moat can be caused by several factors that might make it difficult for other businesses to steal market share. These factors may include high barriers to industry entry, or the business with the moat might own patents on several products that are essential to providing their particular product or service.
A wide economic moat is a type of sustainable competitive advantage possessed by a business that makes it difficult for rivals to wear down its market share. The term economic moat was made popular by the investor Warren Buffett and is derived from the water-filled moats that surrounded medieval castles. The wider the moat, the more difficult it would be for an invader to reach the castle.
An advantage a company has over competitors that can be exploited for profits over a period of time. Companies that have secure patents, breakthrough technologies, and market changing products can create a wide economic moat that will stave off competition for a period of time.
How to use Wide economic moat in a sentence?
- A wide economic moat is one that is difficult to mimic or duplicate (e.g., brand identity, patents) and thus creates an effective barrier against competition from other firms.
- Companies with a wide economic moat have are able to generate large amounts of free cash flow and have a track record of strong returns.
- An economic moat is a distinct advantage a company has over its competitors that allows it to protect its market share and profitability.
Meaning of Wide economic moat & Wide economic moat Definition