Narrow Moat


DEFINITION of 'Narrow Moat'

A slight competitive advantage that one company enjoys over competing firms operating in the same or similar type of industry. A narrow moat is still an advantage for a company, but it is one that only provides a limited amount of economic benefit and will typically last for only a relatively short period of time before competition marginalizes its importance.


The phrase "economic moat" was coined by legendary investor Warren Buffett. This phrase has since been refined to differentiate between "wide moats" and "narrow moats". Wide economic moats offer substantial economic benefits and are expected to endure for a prolonged period of time, while narrow moats offer more modest economic benefits and typically last for a shorter period of time.

  1. Warren Buffett

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  2. Absolute Advantage

    The ability of a country, individual, company or region to produce ...
  3. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it ...
  4. Wide Economic Moat

    A type of sustainable competitive advantage that a business possesses ...
  5. Economic Moat

    The competitive advantage that one company has over other companies ...
  6. Soft Economic Moat

    A type of economic moat (or competitive advantage) that is based ...
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  1. What is an economic moat?

    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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