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1.
A company that was once a major player in its market but is now suffering the effects of increased buyer power and a flight to other, related products would have a _______.
Narrow moat. It would have a narrow moat of the eroding variety.
2.
When customers are fragmented and don't have much influence on a product, that is an example of weak _______.
Buyer power. For the companies producing the products, that is a positive thing, as it strengthens their competitive positioning.
3.
To find out whether a company you are investing in has a deep economic moat, you should look at _______.
How powerful any one competitive advantage is. This is what depth is about.
4.
If a company is in an industry with low supplier power, what type of moat might it most easily be able to build?
Low-cost producer. Supplier power relates to how cheaply a company is able to get the goods it needs to run its operations, so firms in industries with low supplier power could be more likely to build a moat based on being low-cost producers. Intangible assets and switching costs help a company with its prices, but not its cost of goods.
5.
What does an economic moat provide to a company?
A competitive advantage. Though the others may be true for many (or should be), a moat is the competitive advantage that one company has over other companies in its industry. As such, it has a lot of power to do what it wants.
