Jump to ContentJump to Main Navigation
The Nature of ValueHow to Invest in the Adaptive Economy$
Users without a subscription are not able to see the full content.

Nick Gogerty

Print publication date: 2014

Print ISBN-13: 9780231162449

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231162449.001.0001

Show Summary Details
Page of

PRINTED FROM COLUMBIA SCHOLARSHIP ONLINE (www.columbia.universitypressscholarship.com). (c) Copyright University of Minnesota Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CUPSO for personal use.date: 26 September 2021

The Value of Moats

The Value of Moats

(p.169) Chapter Ten The Value of Moats
The Nature of Value

Nick Gogerty

Columbia University Press

This chapter looks at moats—the combination of capabilities that can help firms achieve long-term positive returns. All moated firms share three traits: (i) a unique mix of capabilities not shared by any competitor; (ii) the ability to capture high margins, using pricing power relative to competitors; and (iii) durability to survive over multiple competitive products or capability and economic cycles. These traits create shareholder value via sustained high return on capital (ROC). If any one of the three is missing, there isn't a moat. By keeping competitors at bay, a moat delivers high margins and thus high ROCs. The allocator's goal is to identify a few moats, offering high margins and returns on capital while protecting and growing the value of assets and invested capital.

Keywords:   moats, clusters, capabilities, shareholder value, capital allocation, investment

Columbia Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us .