Comment by sah2ed
8 years ago
> 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.
No, you don't need to use them in tandem, sure, they are more effective if used in tandem, but not required.
And neither of them guarantees anything. Markets change, and you might be sitting in a drying oasis, behind a massive moat, surrounded by a desert of profitability.
And both moats and deserts have the drawbacks: moats defend from attacks but make you less mobile and they can easily expire (or be bypassed) with technological changes, just as stone walls became irrelevant with gunpowder, and Vauban-style fortifications became irrelevant with mobile warfare and aviation.
Deserts restrict your movements, since you can't try to move to adjacent markets to increase your profits, making it harder to handle declines in your core market.