Strategy · business glossary
What is Moat?
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
definition
A durable competitive advantage that protects a business from being easily copied or displaced by competitors.
Moat explained
A moat is a durable advantage that protects a business from competitors — like a moat around a castle.
example
Network effects, strong brands, switching costs, licences and cost advantages are common moats.
why it matters
Businesses with moats can keep earning good profits for longer.
common mistake
Mistaking a temporary lead for a moat.
Frequently asked questions
What is Moat?
A durable competitive advantage that protects a business from being easily copied or displaced by competitors. A moat is a durable advantage that protects a business from competitors — like a moat around a castle.
Why does Moat matter?
Businesses with moats can keep earning good profits for longer.
What is a common mistake with Moat?
Mistaking a temporary lead for a moat.
Related terms
Competitive advantage
Any factor that allows a business to outperform its competitors on a sustained basis.
Network effect
A property where a product becomes more valuable to each user as more people use it.
Brand equity
The added value a brand name itself creates — the reason customers will pay more or choose it over an identical unbranded alternative.