Economic Moat

DEFINITION of 'Economic Moat'

The competitive advantage that one company has over other companies in the same industry. This term was coined by renowned investor Warren Buffett.

BREAKING DOWN 'Economic Moat'

The wider the moat, the larger and more sustainable the competitive advantage. By having a well-known brand name, pricing power and a large portion of market demand, a company with a wide moat possesses characteristics that act as barriers against other companies wanting to enter into the industry.

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    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages ... Read Full Answer >>
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