4 ms·
McDonald’s has brand moat. So does Coca-Cola. And many more products. The switching cost is null, but the brand does it all.
by corentin88 1y ago
McDonald’s has brand moat. So does Coca-Cola. And many more products. The switching cost is null, but the brand does it all.
- minimaxir 1y agoAgain, that's brand loyalty, not a brand moat. Moats, as noted in Google's "We Have no Moat, and Neither Does OpenAI" memo that made the discussion of moats relevant in AI circles, has a specific economic definition.
- Sammi 1y agoThe Seven Powers is considered an authoritarian source on business moats. https://www.goodreads.com/book/show/32816087-7-powers https://www.goodreads.com/book/show/32816087-7-powers It has branding as one of the seven and uses coca cola as an example.
- qcnguy 1y agoSwitching costs only make sense to talk about for fully online businesses. The "switching cost" for McDonalds depends heavily on whether there's a Burger King nearby. If there isn't then your "switching cost" might now be a 30 minute drive, which is very much a moat.
- Incipient 1y agoThat's not entirely true. They have a 'infinite' product moat - no one can reproduce a big mac. Essentially every AI model is now 'the same' (queue debate on this). The only way they can build a moat is by adding features beyond the model that lock people in.