Why is Pinduoduo’s price so low that you can’t even imagine? Because Pinduoduo wants to occupy the market quickly, enjoy the first wave of dividends and then lower profits, so that latecomers dare not enter rashly. In other words, and Pinduoduo are building a "moat" for themselves.
Why does WeChat have super social attributes? Because WeChat is an APP with high switching costs, it is bundled with its social attributes, such as health code , bank cards, bus cards, etc. Therefore, the switching cost of customers is quite high, which means that WeChat There is a good "moat".
Why does Coca-Cola Company have brand advantages everywhere? Because the brand itself is the "moat" of Coca-Cola . They once said: "If Coca-Cola's factory is destroyed by fire, if there is a world financial crisis, as long as there is Coca-Cola's brand, we will stand up again the next day."
Why Tesla can become the largest player in the electric vehicle market ? Because Tesla first established a very dazzling brand, and then began to try various methods to reduce prices, form economies of scale by controlling costs, gradually occupy the market, and successfully build a "moat."
The concept of "moat" was first proposed by Buffett in a letter to shareholders in 1993. He believed that the company itself was equivalent to the "castle", and the value of the castle was determined by the "moat". Buffett's moat theory has been well verified in the investment field. He has made considerable profits from investing in companies with relatively broad moats such as Coca-Cola, Wells Fargo , and Apple .
Benchmark partner Bill Gurley wrote a very classic article "10 Characteristics of Companies that Can Make Big Money" when LinkedIn was launched in 2011. The first characteristic mentioned sustainable competitive advantage, which is our What is often called a barrier to entry is a moat.
In the current global epidemic crisis, the primary goal of many companies is to survive, but in the long run, only companies with moats can survive longer and make more money. "Look at demand in the short term and barriers in the long term." An excellent company must build its own barriers and continuously widen its moat in order to avoid being eliminated in market competition.
P18 The core of competition lies in differentiation. The highest level of differentiation is to find a moat.
P21 The moat of Happy Twist : In the past 19 years, we have only done one thing: "comedy".
P26 The moat of Midea: Maximizing efficiency and continuous growth for forty years
P32 The moat inside and outside NEIWAI: offline stores are the threshold for brand competition
P37 Capital is not a moat, technology is
Source: Chinese Businessman Magazine
