Finding The Edge
Flat, even worse, decreasing earning – is the thing that investors never want to see. Warren Buffett called the firm characteristic to preserve earning as an economic moat – or, formally in business school terms: durable competitive advantage.
Losing steam of the earning could be stem from several situations. It could be due to lower sales prices – like Amgen or other drugmakers when they lose their patent. It could be due to lower volume sold like Nokia and Blackberry RIM when iPhone and Android come in. Or both, as Xerox business gets disrupted by Japanese copiers. As Darwin says, it is survival for the fittest.
Like Darwin, Americans saw so many businesses collapsed – and they will see it again and again. Our post under the competitive advantage category helps the investor to recognize the business advantage of the company – how strong it is and, how long it could retain the customer. The first thing you need to know about your investment is they still exist today and tomorrow – not extinct in the midst of the business wilderness.
Competitive advantage is one of the most crucial aspects of your valuation. All calculation basis – whether it is earning, operating cash flow, or even free cash flow is merely a product. It is management, strategy, policy, demographic, so many factors that affect these groups of financial numbers. Understanding this – and your calculation won’t be too difficult.
So many investing blogs and channels out there – some of them are really exceptional. But few, just a few, cover the competitive advantage in detail. We are here, to bridge that gap.
The competitive advantage of GE Healthcare could be testified in its long relationship -more than 15 years – with Vizient. Formerly known as Novation LLC, Vizient Inc is one of the largest GE Healthcare clients. This Texas-based company is a giant purchasing organization of medical equipment that represents more than 2,500 hospitals in the US. Its contract with GE Healthcare includes a CT imaging scanner and machine.
Continue reading “Competitive Advantage of GE Healthcare”
Blockchain and Bitcoin are believed to revolutionize the financial industry since they offer more transparency, security, anonymity, and more cost-efficiency. Will this hot trend melt Visa’s “plastic” business? Here we make a SWOT threat analysis of VISA – another incumbent – disruptor episode.
Continue reading “SWOT Threat Analysis of VISA. The Block and The Chain”
Is Aero Industry Business Advantage exist? Seven years ago, at the Berkshire Hathaway annual meeting, Warren Buffett said, “the airline industry is a death trap for investors”.
Continue reading “Aero Industry Business Advantage: Moat In The Sky”
Teladoc Stock rocketing more than 100% third-quarter 2020. Hovering above Earth’s atmosphere, NASA astronauts received healthcare treatment from the station more than 200 miles apart.
Continue reading “Teladoc Stock Analysis. Take Care The Competition”
Daimler needs 3 years to introduce their employee to a new product lifecycle platform. Switching Cost as Business Advantage can’t be overlooked.
Continue reading “Switching Cost as Business Advantage. Microsoft”
To give you an illustration of Disney customer retention, consider this fact: since its opening in 1955, 10 years after World War II, The Mickey Mouse creator has raised ticket cost for Disneyland from $2.5 to $129, but the visitor still happily comes.
Continue reading “Disney Customer Retention”