1. Consumer trends and technologies keep evolving over time, leading to a single moat becoming narrow or even disappearing.
2. Hence, multiple moats are now created by successful companies for long-term survival and leadership through:
a) Lower cost of production
b) Higher switching cost to customers
c) Stronger brand identity
d) Superior technology
e) Stringent entry barriers like patents
3. Carefully built moats enable companies to ward off any external threats from others and they can remain leaders for decades.
4. Investors should prefer such companies whose management is constantly seeking innovations for remaining ahead of rivals.
5. Shares of companies with wide and multiple moats often come with high valuations, hence investors should ensure that they don't overpay, as future benefits of these moats may already be priced in.
2. Hence, multiple moats are now created by successful companies for long-term survival and leadership through:
a) Lower cost of production
b) Higher switching cost to customers
c) Stronger brand identity
d) Superior technology
e) Stringent entry barriers like patents
3. Carefully built moats enable companies to ward off any external threats from others and they can remain leaders for decades.
4. Investors should prefer such companies whose management is constantly seeking innovations for remaining ahead of rivals.
5. Shares of companies with wide and multiple moats often come with high valuations, hence investors should ensure that they don't overpay, as future benefits of these moats may already be priced in.