Sustainable Competitive Advantage: Building a Moat
A sustainable competitive advantage is a structural 'moat' that makes your business hard to copy. It's seen in network effects (social media), high switching costs (enterprise software), or economies of scale (Amazon).
A sustainable competitive advantage isn't just being better; it's being better in a way that's hard for rivals to copy. Think of it as the 'moat' around your business. It arises from structural factors like network effects, high switching costs, unique IP, or massive economies of scale that competitors can't easily replicate. The common footgun is mistaking a temporary tactical win, like a clever marketing campaign or a single feature, for a durable, long-term structural advantage that protects future profits.
Read the original → Wikipedia: Sustainable competitive advantage
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