19 Business Moats That Helped Shape The World’s Most Massive Companies

A business moat is a key competitive advantage that sets a company apart from its competitors. From Amazon and Uber to Starbucks and Disney, here are how 19 of the world’s biggest companies have built and defended their moats.

What do companies like Amazon, Uber, and Starbucks have in common?

Among several shared characteristics, these companies thrive by understanding, building, and strengthening their business moats — the key competitive advantages that set them apart.

Warren Buffett helped popularize the concept, saying a company’s moat (or lack thereof) means everything when deciding to invest in it: “The key… is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”

Companies can build moats by strengthening their brands, achieving economies of scale, or even lobbying for special status from the government. In return, they can receive customer loyalty, pricing power, and legal protections that make it difficult for other companies to compete with them.

In the 20th century, the biggest companies in the world were built on moats of economies of scale or government. Standard Oil, for example, built its monopoly by buying up smaller competitor refineries and building a global distribution network. Eventually, the company controlled about 90% of all the refineries and pipelines in the United States, and could set its own prices.

Today, however, the most durable moats are being built on different types of advantages, such as network effects, data, and repeat engagement within a product ecosystem.

Google, for example, started its moat by developing a better algorithm for indexing and searching the internet. The company has since strengthened that moat by putting that advantage to work in transportation, shopping, and most importantly, advertising.

Below, we look into 19 examples of business moats and dive into how they work.

The examples below were chosen according criteria such as size, business success, and ability to illustrate the mechanics and advantages of a particular type of business moat. Many of these companies could fit into multiple categories of business moat, even though we only list one per company.

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