Moat
Also called: economic moat, competitive advantage, durable advantage
A moat is a structural advantage that lets a company earn returns above its cost of capital for years without competition eroding them. The durable sources are few: network effects, switching costs, cost advantages from scale, intangible assets like brands and licences, and efficient scale in small markets. Everything else — a good product, a talented team — is competed away, which is why moat analysis dominates terminal value assumptions.
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