Switching Costs Build Moats and Retain Customers
April 24, 2019 at 07:01 AM EDT
By Brandon Rakszawski, VanEck Senior ETF Product Manager The term “economic moat” describes a company’s ability to maintain its competitive advantages and defend its long-term profitability. This moat investing education series explores the five primary sources of moat, according to Morningstar: 1) switching costs; 2) intangible assets; 3) network effect; 4) cost advantage; 5) efficient scale. Here we explore the concept of switching costs.