It all began with a controversy with billionaire Warren Buffett, chairman and chief executive of Berkshire Hathaway, a holding company owned by See’s Candies.
In an article in Fortune, in 1999, Buffett introduced the word moat to economic-business slogan, referring to the competitive advantage of one company over another in the same industry. Having established a brand, having control of a larger market share, having achieved exclusive technology, all these are “trenches.” The wider the moat, the greater the competitive edge of the company.
“I think the trenches are ridiculous,” said Elon Musk to analysts last Wednesday when Tesla’s first-quarter financial results were released. “If your only defense against invading troops is trenches, then you will not stand for long. What counts is the rate of innovation, this is the key determinant of competitiveness, “he added.
A Berkshire Hathaway stakeholder asked Buffett whether he agrees with the views of Ellon Musk. Buffett defended his own views, although he admitted that accelerating technological developments have made the trenches vulnerable and “candidates for invasion”.
“Of course you have to work to improve your treasure continually and to defend your treasury constantly. And Ellon can bring up, in some areas, “Buffett said at a meeting of his company in Omaha. “I do not think he wants to face us in candy” he added.
Apparently, Ellon Musk remarked these comments as “they threw the glove”. In particular, as Buffett thinks that the See’s Candies pit is very large in the confectionery industry. And, as shown by what he stood, “he lifted the glove”.