In a competitive strategy case, most candidates can sketch out a basic competitor landscape. They list the key players, estimate market shares, and might even apply Porter’s Five Forces. This is competent. It is also insufficient.

Checking the "Competition" box isn't the goal. The goal is to determine if the client can achieve and—more importantly—sustain superior profitability. Average candidates analyze the current game. Elite candidates assess the structural reasons the client will keep winning for the next decade. To do this, you must analyze the economic moat.

What is an Economic Moat?

Coined by Warren Buffett, an economic moat refers to a durable competitive advantage that protects a business from competitors, much like a real moat protects a castle. It’s not about being the best for a quarter or a year; it’s about structural characteristics that make it difficult for rivals to erode your market share and profitability over the long term.

Applying this lens in a case interview instantly elevates your analysis from a static snapshot to a dynamic, long-term strategic assessment—the kind partners are paid to provide.

The Four Core Economic Moats

When analyzing a client’s business or a target market, actively hunt for evidence of these four moat types. They are the sources of sustainable, defensible profit.

• Intangible Assets: This includes powerful brands, patents, or government-granted licenses that prevent others from competing. A brand like Tiffany & Co. allows for premium pricing that a no-name jeweler cannot command. A pharmaceutical patent provides a legal monopoly for a set period.
• Switching Costs: These are the one-time inconveniences or expenses a customer incurs to switch from one product to another. High switching costs lock in customers. Think of your bank, enterprise software systems like Salesforce, or the Apple ecosystem. Leaving is possible, but often painful and costly.
• Network Effects: A product or service exhibits network effects when it becomes more valuable as more people use it. This creates a powerful feedback loop where the leader gets stronger. Classic examples include social media platforms like LinkedIn, marketplaces like Airbnb, or payment systems like Visa.
• Cost Advantages: This is the ability to produce goods or services at a lower per-unit cost than competitors. This can stem from massive scale (Walmart's procurement power), proprietary technology or processes (a unique manufacturing technique), or preferential access to resources (a cheap source of raw materials).

Applying the Moat Test in Your Case

Don't just add a "Moat" bucket to your framework. Weave this thinking into your entire analysis.

1. Diagnose the Client's Moat: When you analyze the company, go beyond "strengths." Ask: Why are they profitable? What structural advantage do they have? Is it a powerful brand? Are their customers locked in? Do they have a scale-based cost advantage? Quantify it if you can.
2. Assess Competitors' Moats: Don't just size up competitors. Evaluate the source and strength of their advantages. Is the market leader benefiting from network effects that will be nearly impossible for our client to overcome? Or is their advantage based on a patent that’s about to expire?
3. Shape Your Recommendation: Your final recommendation should be "moat-aware." The strongest strategies are those that either leverage and deepen the client’s existing moat, build a new one, or strategically attack a competitor's weak or non-existent moat. A plan to launch a "me-too" product against an incumbent with strong network effects is a losing strategy. A plan to use a cost advantage to undercut a competitor reliant on brand alone is a winning one.

The Bottom Line

Identifying competitors is table stakes. The elite candidate moves beyond that to assess the durability of competitive advantage. By asking "Where is the moat?" you shift the conversation from short-term tactics to long-term value creation. This demonstrates true strategic thinking and is a clear signal to your interviewer that you are partner material.