I attempted to emulate Warren Buffett’s investment approach. When asked about his strategy, Buffett often referred to the concept of an “economic moat”. I was intrigued by the idea and realized that the “moat” concept could be analyzed through Five Forces framework by Porter.
5 force stands for the followings:
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Competition in the industry
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Potential of new entrants into the industry
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Power of suppliers
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Power of customers
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Threat of substitute products
I applied this framework to an industry I know well—the heavy-duty engine industry.
Here is my analysis.