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Moats in stocks
"Switching cost"
A moat is a competitive advantage which your rival canot compete with
Switchng cost is either the cost or time or pain a customer undergoes to cancel ur contract and go to ur competitor. Some biz have a high switchg cost. Almost imposbl 1/8
"Switching cost"
A moat is a competitive advantage which your rival canot compete with
Switchng cost is either the cost or time or pain a customer undergoes to cancel ur contract and go to ur competitor. Some biz have a high switchg cost. Almost imposbl 1/8
take salesforce/ SAP/ Oracle/Service now
- needs a big installatn and traing effort of all
- gets customised n integrated into other applications
- Users keep growing as Co grows
- more and more invt of time and money on the App
- after a pt, it is almost imposbl to switch
2/8
- needs a big installatn and traing effort of all
- gets customised n integrated into other applications
- Users keep growing as Co grows
- more and more invt of time and money on the App
- after a pt, it is almost imposbl to switch
2/8
India: Cams - transaction processg co for indian MFs
- MFs have many different schemes with many subtle variances
- The co keeps custmisg its software to match scheme services
- Distributors all over India move their offices close to the cams india offices
- imposbl to switch
3/8
- MFs have many different schemes with many subtle variances
- The co keeps custmisg its software to match scheme services
- Distributors all over India move their offices close to the cams india offices
- imposbl to switch
3/8
Elevator cos: Kone etc
- when an elevator is fixed in a building, that's it
- the customer must pay annual maintenance for its life
- Razor n blade biz model
- Co can't simply remove an elevator and put a competitor elevator
- no question of switching
4/8
- when an elevator is fixed in a building, that's it
- the customer must pay annual maintenance for its life
- Razor n blade biz model
- Co can't simply remove an elevator and put a competitor elevator
- no question of switching
4/8
US, Okta - identity confirmn app on cloud
- user Identity single access pt app across many packages
- with every new cust, okta integrates with new apps. Cust pay for it
- And its moat of single pt access for many apps keep growg
- Every new app intgn, is a moat
- switch, ney
5/8
- user Identity single access pt app across many packages
- with every new cust, okta integrates with new apps. Cust pay for it
- And its moat of single pt access for many apps keep growg
- Every new app intgn, is a moat
- switch, ney
5/8
US - intuitive surgical. Robotic surgery co
- Huge installation process and training thousands of Dr's sometimes all over the world
- Dr's and assistants get used to the surgical process
- After thousands of operations, becomes imposbl to switch
- Revenues for evry surgery.
6/8
- Huge installation process and training thousands of Dr's sometimes all over the world
- Dr's and assistants get used to the surgical process
- After thousands of operations, becomes imposbl to switch
- Revenues for evry surgery.
6/8
India: Adv. Enzymes
- Enzymes are used in Pharma research during drug discovery
- customzd for every research process. Customer pays
- Cos patent their enzymes
- Cost of enzyme in drug dev is tiny. No incentive to switch
- Becomes a rec rev for life
- Switching. Very difclt
7/8
- Enzymes are used in Pharma research during drug discovery
- customzd for every research process. Customer pays
- Cos patent their enzymes
- Cost of enzyme in drug dev is tiny. No incentive to switch
- Becomes a rec rev for life
- Switching. Very difclt
7/8
One can think of several such Biz models and Cos which can benefit. If such cos grow rapidly and can keep increasing cash flows, may turn out to be great investments
8/8
8/8
