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"MOAT"

In simple terms, MOAT means competitive advantage. When you are competing with others, you need some advantages over other people. For example, when you have a good book or mentor who doesn't have anyone for the exam. People always find mistaken moats. Moats like great products, strong market share, great execution, and great management. Let's analyse real moats for companies. 1) the cost of switching; 2) intangible assets 3) cost advantage 4) The network effect

     Commonly, switching bank accounts is mentally hectic. Normally, people don't want to switch their bank accounts very easily. It is the same when Infosys or TCS provide any service to the government or banks that is hard to switch. There is a switching cost for customers.

     Patents, copyrights, and brand value, which is the biggest moat for pharmaceutical companies or any company which requires government permission to operate. like chemical plants. These are intangible assets. 

    Whatsapp is a great example of the network effect. We are using chat for WhatsApp because everyone is using it. The same for Facebook and Instagram.

      The cost advantage is for commodity companies (cement, metals, textiles) that are making the same product and selling it in kilograms or liters. They don't have any pricing advantage. They have to sell at world prices. Companies that have efficient operations or efficient managers can reduce their production costs. This is their competitive advantage.

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