Is a Brand a successful Moat or Barrier to Entry?

Is a Brand a successful Moat or Barrier to Entry?

I’ve decided in the past, that a company’s brand was a strong enough moat to keep competitors at bay, and allow the company to keep earning profits  This has been a grave error, and warrants further study.  I’ve since learned that a brand, by itself, is not a strong competitive advantage resulting in a defensible economic moat.  For a strong moat a stronger situation needs to be in place such as some kind of customer preference, distribution or network effect that is the source of a strong competitive advantage.  Companies spend a lot of money on marketing and advertising to build a brand.  This usually entails messaging that relates the name of the company or product to some benefit.  The goal is to build that association into a customer’s (or potential customer) mind so that it becomes easy to recall in one’s mind at a later time. What I have discovered over time, and what others have written about, is that a brand, by itself, is easy to replicate by spending money.  Any company, with enough cash, can “buy up” to the brands advantage and receive the same value.  The only barrier is the needed investment to “buy up” to a similar…

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