A competitive advantage gives a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. The more sustainable the competitive advantage, the longer the business in question will be able to produce outsized returns for shareholders. Warren Buffett was one of the first to recognise the benefits of a competitive advantage, or what he calls an “economic moat”, which is defined by Investopedia as
“...a business' ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms.”
But nature of competitive advantage is changing. Technology is...
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