economic moat


The competitive advantage that one company has over others. Just as a "moat" is a defensive barrier that surrounds a fortified structure, a large moat around a company allows it to charge higher prices and hold a larger market share. A company can develop an economic moat by having a large share of the market, obtaining pricing concessions from suppliers, having a recognizable brand name, or operating in an industry with barriers to entry. also called investment moat.

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economic lot size soft moat