The concept of economic moats, popularised by legendary investor Warren Buffett, refers to the durable competitive advantages that enable companies to defend their market position and deliver superior returns over time. These moats can take many forms, including cost leadership, strong brand recognition, network effects, high switching costs, and proprietary technology. Companies with wide moats often enjoy sustained pricing power, customer loyalty, and the ability to generate consistent free cash flow. However, no competitive advantage lasts forever. In today’s fast-changing business environment, even the most dominant players can find their moats under threat. Technological disruption, shifting consumer preferences, regulatory changes, and new competitors can all weaken what once seemed like an unassailable position. Many companies fail not because their core product becomes irrelevant, but because they overlook the early signs of decline. This article explores five key early warning signs suggesting a company’s economic moat may deteriorate. Learning to recognise…
