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Stocks 206: What's behind Economic Moats and Competitive Positioning

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1.
If a company is in an industry with low supplier power, what type of moat might it most easily be able to build?
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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.
2.
Being unable to enter a market because it would cost a huge amount of money just to break into it is an example of _______.
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Threat of new entrants. In this case, the threat is low.
3.
What does an economic moat provide to a company?
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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.
4.
A company that resides in an industry where wide moats are nearly impossible to create might still have a narrow moat. Such a moat would be of what variety?
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Moat with structural challenges. Due to structural factors, becoming a wide moat is nearly impossible, but the company can still enjoy a narrow moat and still be in a dominant position.
5.
If a company is involved in doing a lot of different things very well, that is a sign that it has a deep economic moat.
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True. In this case, they are really good at more than one competitive advantage.