Let’s continue to examine the different types of competitive moats (Moat)
MOAT #3 - Scale
Sometimes, a company’s size is its competitive advantage.
A large company can:
- buy raw materials more cheaply
- produce more cheaply
- spread fixed costs
- sell at a lower price.
Examples:
- Walmart - massive purchasing volumes result in the lowest prices.
- Amazon - massive logistics and infrastructure.
- Costco - purchasing scale and high efficiency.
The larger the scale, the harder it is for new entrants to compete. This is called economies of scale.
Discussion on Telegram
Comments are machine translated from Russian.
- Сергей 20.03.2026I like the idea, which is somewhat reminiscent of antitrust principles: why not raise the price as the quantity of goods increases? Obviously, you can’t force anyone to do this - they’ll just find a way around it. But somehow, we need to shift the paradigm
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