February 27: Warren Buffett’s anniversary statement on “Moats” (1985)

On February 27, 1985, Warren Buffett introduced the term “economic moats,” describing the importance of competitive advantages that protect businesses from competition. A “moat” is the strategic location of a company that makes it resilient. This philosophy remains relevant, especially in markets where fluctuations and innovation pose challenges.
The concept of “moat” encompasses several aspects, such as strong brand awareness, patent ownership, economies of scale and consumer confidence. For example, companies like Coca-Cola have built strong moats through global awareness and product loyalty, through strong business strategies. Many times similar products are called “coca” or “cola” on the one hand because of the unrecognizability of the brand and on the other hand because in the mind and psychology of the consumer this product automatically reminds the brand. According to Buffett himself, “good investments are those that can keep competition away for a long time.”
Businesses need to focus on boosting their own moats. This can be achieved through innovation, consistent investment in quality and strengthening the relationship with customers. These are all points that require business strategy consultants offering programs such as strategic business consulting. In a world where technological developments are constantly changing markets, creating a lasting competitive advantage is crucial.
This anniversary is a reminder that success does not lie only in short-term growth. Long-term strategies focused on resilience and adaptability are the foundation for any business’ survival and prosperity.