Warren Buffett focuses on companies that have an economic moat. Intuitively, we know what this means, but defining what an economic moat is not so simple. Fortunately, Bruce Greenwald has done that for us.
In his article, "All Strategy is Local," Greenwald outlines the three types of competitive advantages:
In his article, "All Strategy is Local," Greenwald outlines the three types of competitive advantages:
- Customer captivity
- Proprietary technology
- Economies of scale
I highly encourage anyone to read "All Strategy is Local" for both investing and better understanding your own business and industry.
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