Weak Moats in Business

Recently I wanted to buy a book a blog recommended. The book sold in India for 1300 rupees online. It was available in Amazon UK for 240 rupees, gbp converted to inr. I had friends in the UK who could get it to me quickly.

A good test of the fundamental strength of your business/ your company,does the following two questions scare you or give you hope :

What if the customer of what you are selling was really smart and well informed about his options ? Is that GOOD or BAD for your company ?

What if the customer of what you are selling was NOT constrained by Geography ? Is that GOOD or BAD for your company ?

If the answer to both were ‘We would be in good or better shape!’, then Congratulations. You are running or in the employment of a worthy business that should be looking at scaling UP.

But if these two questions drew a response along the lines of ‘We will die a painful death!’, re-look at the fundamentals propping up the business. And to you I say :

Since the number of digitally savvy people is trending UP, the first question above assumes a sense of urgency because your ‘moat’ in the first scenario is ‘our customer doesn’t have all the needed information so we have his business‘.

Since the number of international travelers is only trending north, the second question also assumes a sense of urgency because your ‘moat’ in the second scenario is ‘customer can’t get to the OTHER place’ and low cost airlines are very good at ensuring people get from A to B cheaply. You are currently located at A. That is a bad creaking moat.

 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s