"Strategy is about building and strengthening business moats" - Avinash Bhandari
While a company develops a prudent business design to achieve profitable growth, it must simultaneously look to develop strong moats. The purpose of the moats is to protect the profit stream that the business design creates. Moats will provide protection against the corrosive effect of competition and customer buying power. The moats will provide durability to the profit stream.
Large market share, patented technologies or processes, dominant brands, control over distribution networks, superior service capabilities, strong customer relationships, lead in product development, lowest cost production / operations, network effects, regulatory approvals etc are all examples of moats that can help sustain competitive advantages of the company and protect its profit streams over a period of time.
Business without moats is like a bucket with holes. Water ( profits / growth ) will ultimately drain out.
Business leaders must therefore continuously look to build and strengthen the business moats to achieve their goal of robust and profitable growth.