Moats are not forever.

[jay21]

For a moat to not be a moat something of greater emotional attachment will have to appear. Greatest moat has greatest emotional attachment.

 

Best current moats

 

starbucks

apple

whole foods

amazon

Ko

Jnj

chiptole

 

Up and coming moats

 

lululemon

groupon ( debatable)

 

My top two moats would currently  be starbucks and whole foods.

 

Wow. I would love to hear your explanation of these because I don't think of most of those having strong moats.

[premfan]

Which of those companies except groupon doesnt have a massive emotional attachment, raving fan base, and isnt the best in customer service and overall customer experience in there field?

 

 

 

 

[ourkid8]

I would definitely say JNJ USED to have the best customer service and customer experience.  The recalls were absolutely shameful and hopefully the new CEO can turn around the tarnished image it currently has.  I am a really frustrated shareholder!

 

I definitely disagree with you on numerous companies you mentioned who have the best moats.  Where are the rails? Cigarette companies? Etc...

 

Thanks,

S

 

 

Which of those companies except groupon doesnt have a massive emotional attachment, raving fan base, and isnt the best in customer service and overall customer experience in there field?

[premfan]

Yeah you are right  i forgot the rails and etc. The list was off the top of my head. The greatest indicator that i use for moats is emotional attachment for the product or service which is of course VERY subjective.

[jay21]

Which of those companies except groupon doesnt have a massive emotional attachment, raving fan base, and isnt the best in customer service and overall customer experience in there field?

 

I guess.  I could easily imagine those getting breached though. 

 

Some of my favorite moats:

 

Most alcohol, MDLZ, I'm agreed on Coke, Google, deposit franchises, Microsoft Office, etc.

 

[mpauls]

For one thing, Coke is not even close to losing it's moat.  If they don't sell sugar, they will sell water or some other form of drink.

 

If you can't ID a moat, you certainly can't ID when a moat is eroding.  By definition only a small (~1.5%) will truly be able to consistently ID moats and know enough to buy or sell when appropriate. 

 

Cheers,

MP

[Aberhound]

I thought Wrigleys had a moat that would last forever until I tried to find a pack of gum for myself and my kids. There was nothing with sugar so we went searching. Eventually we bought Bubblicious. I see it is now owned by Kraft along with Dentyne and others which are also made with sugar. Maybe Kraft has a better moat?

 

Unfortunately the world is not so simple. My wife lost weight and stopped needing stomach and gut pills once she copies me and stopped eating wheat.  Modern wheat is no good for us Scots and now I see that applies to the Dutch as well. I don't see much moat in a company like Kraft which sells so much wheat. It can't be good for a brand to be associated with obesity, pain and gas.

[twacowfca]

I thought Wrigleys had a moat that would last forever until I tried to find a pack of gum for myself and my kids. There was nothing with sugar so we went searching. Eventually we bought Bubblicious. I see it is now owned by Kraft along with Dentyne and others which are also made with sugar. Maybe Kraft has a better moat?

 

Unfortunately the world is not so simple. My wife lost weight and stopped needing stomach and gut pills once she copies me and stopped eating wheat.  Modern wheat is no good for us Scots and now I see that applies to the Dutch as well. I don't see much moat in a company like Kraft which sells so much wheat. It can't be good for a brand to be associated with obesity, pain and gas.

 

The proline bond in peptides found in wheat gluten is most difficult to break by digestive enzymes.

[jay21]

I thought Wrigleys had a moat that would last forever until I tried to find a pack of gum for myself and my kids. There was nothing with sugar so we went searching. Eventually we bought Bubblicious. I see it is now owned by Kraft along with Dentyne and others which are also made with sugar. Maybe Kraft has a better moat?

 

 

 

MDLZ moat is huge imo.  I cant see many people competing with Oreos and Chips Ahoy in the biscuit market.  Also their chocolate group is pretty good and their gum group is taking share (but in a declining market).

[no_free_lunch]

Many, many good ideas on this board.

 

I would second google.  If you have done online advertising, people continually say that they don't get good ROI with Bing.  So in addition to being the more popular search engine for consumers, they seem to be the more effective advertiser as well.  With android being completely geared around google services they have a very strong grip on the mobile market as well.  If mobile morphs into a desktop replacement then they basically just own computing.

 

What about harley davidson?  Certainly not an unbreakable moat, but such a strong brand has to count for something.  I figure when the brand is that old and still very cool that has to have some staying power.

 

Oracle has a decent little moat.  Not unbreachable but for the time being strong.  There are many software applications which just require Oracle and for those that don't it is a pain in the butt to switch.  You also have the advantage of just far more DBA's knowing Oracle, or at least that is my experience.  Once these guys learn the product they become Oracle's biggest sales people as it is in their best interest not to have to learn a new product.

 

IBM has a very strong moat based purely on reputation.  I have seen numerous times where their products were chosen simply because the competitors weren't far enough ahead of them.  If there is an grey area as to which product to use, companies will generally choose the biggest company.  Even when given the choice between Microsoft and IBM, I think IBM would win as there is such a strong stigmatism against Microsoft.  IBM is perceived as large, competent and safe.  What CIO doesn't want that?  On top of that, they can overpay for smaller vendors, plug them into their sales lineup and immediately increase the profitability of those products.