Comment by ucaetano
8 years ago
Exactly! A moat is less efficient than a desert. A moat is highly susceptible to niche entrants who might expand into your main market after, but a desert leaves no to little money on the table for anyone else.
8 years ago
Exactly! A moat is less efficient than a desert. A moat is highly susceptible to niche entrants who might expand into your main market after, but a desert leaves no to little money on the table for anyone else.
You are correct, if you believe competition in the marketplace (or the battlefield) is linear -- where enemies/competitors lunge at you in turns, one at a time.
If you do not believe that competition is linear, then it cannot be true by any stretch of the imagination that a moat is "less efficient" than a desert. A moat/desert/<insert metaphor> is only one of many tactics employed to win battles.
IOW, it is not a strategy as you seem to be implying with this reply.
> it cannot be true by any stretch of the imagination that a moat is "less efficient" than a desert
Nope, a moat protects a profit center by creating barriers to entry in the form of competitive advantages.
A desert kills profit centers that could be used to attack your own profit center. Competitors can't leverage neighbor markets as an entry point, they can only attack your core business directly.
You can have both, but a desert end up being more efficient for the simple fact that it reduces the total amount of profit to be had in the market, draining competitors of resources.
The desert of profitability is the Russian winter of business models (with all the "Russian winter" caveats, so let's not go down the route of discussing if it was actually the winter or German lack of fuel, or Napoleon's whatever): you don't need strong moats when enemies die before reaching your walls.
> A desert kills profit centers that could be used to attack your own profit center. Competitors can't leverage neighbor markets as an entry point, they can only attack your core business directly.
Great! You are essentially proving my point that they are tactics that can only be effective in tandem.
A desert of profitability tactic is only feasible if you are already awash in profits.
In other words, a moat must necessarily exist to justify the expense of sabotaging your competitors' defenses, otherwise, if they prove to be resilient (Intel+AGP vs PCI) or launch a surprise counterattack, you are toast.
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