"What is your MOAT? "
MOAT by definition is the distinct advantage that a business has over its competition to protect its market share.
Traditional businesses have lived by the sole focus of building MOATs for earning PROFITS by offering the lowest price, controlling distribution channels, acquiring product patents, getting business empanelment, gaining brand loyalty, and building assets with location or proximity advantages.
However, in today's Digital Age where the entire world is connected online, the majority of these MOATS have become redundant where the user has the choice of purchasing anything from anywhere with least regards to brand loyalties and is served by diverse channels.
Failure to adapt to this new digital world has caused the downfall of many businesses and loss for many business pundits.
To that extent, even Mr. Warren Buffet who originally popularized the strategy of business MOATS failed to see this shift and missed picking stakes in Amazon and Alphabet (Google) much earlier in their journey, a misjudgment that he regrets to date.
Hence, it is imperative that Business leaders should adapt to the new shift and rethink strategies on building new MOATS around their business.
To my understanding, New Age Businesses drop the old way of solely focusing on profits and instead should build MOATS around offering enhanced CUSTOMER EXPERIENCE which would lead to loyal customers and finally resulting in profitability.
The new-age customer distinctly craves EXPERIENCE over features, specifications, price, and channels.
With the core tenet of offering enhanced customer experience, businesses should further identify touchpoints across the customer journey to build MOATS around creating value at each level.
The new MOATS that business can consider focusing on are
1) Building needs-based solutions over feature-packed products
2) Building platform-based services over single-use products
3) Building wider ecosystem support over standalone products
4) Building service-centric approach over one-time sell approach
5) Building network-effect based usage over an isolated usage
6) Building value-based offerings over lowest price offerings.
The idea should be to create immense value for your customer by offering an EXPERIENCE that is difficult to emulate by the competition.
That alone should be the FOCUS on building a business MOAT in this new age.
So do re-analyze your business approach to answer this one question
"What is your MOAT?"
Driving Operational Excellence & Growth for Manufacturing Firms | Tech Consultancy Leader | MOPS Program Specialist | Transforming Inefficiency into Scalability
1 年Thank you for sharing such an insightful and thought-provoking piece on the evolution of business MOATs in today's rapidly shifting digital landscape. Your analysis perfectly encapsulates how traditional MOATs are losing relevance and highlights the urgent need for businesses to pivot their strategies. I couldn't agree more with your emphasis on the importance of customer experience as the new MOAT. The six new MOATs you've outlined—needs-based solutions, platform-based services, ecosystem support, a service-centric approach, network-effect based usage, and value-based offerings—are spot-on and serve as an invaluable guide for any business leader looking to thrive in this new age. Your piece serves as a timely reminder that in an era where technology has leveled the playing field, offering an exceptional customer experience is not just a nice-to-have, but a must-have. It's a wakeup call for businesses to re-evaluate their strategies if they want to build sustainable, long-term value. Thank you for igniting this crucial conversation and pushing us all to rethink and re-strategize.
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