Jessica Spungin on why every business needs a moat in 2026

Jessica Spungin, LBS adjunct professor of strategy and entrepreneurship at London Business School, says a moat isn’t just a medieval water trap, it’s the secret sauce that keeps competitors at bay in a tariff-hit, AI-fuelled, market-turbulent world.

Far from new, Warren Buffett popularised the term 18 years ago, it can be a world-famous brand, a patented drug, sticky software, or a sprawling ecosystem like Amazon or Alibaba. “It’s about why it’s defensible against attack,” Spungin explains, whether that’s government backing, unique resources, or the ability to reinvent repeatedly.

Investors are paying attention: Morningstar tracks companies with durable competitive advantages, from Mastercard and L’Oréal to Apple and Nvidia. CEOs aren’t shy about claiming moat status either, while United Airlines touts a “hard to replicate” network, Domino’s leverages loyalty data, and insurance giant Gallagher speaks of building a moat around its castle.

But Spungin cautions: moats aren’t magic shields. Today’s interconnected world makes them more like Venetian canals than isolated castles. Nvidia’s chips, for example, rely on AI companies, rare minerals, and energy infrastructure. Her advice for businesses in 2026: list what you have that competitors don’t and nurture it. That’s your moat. And heed Booking.com CEO Glenn Fogel’s warning: “There’s no such thing as a moat.”

One thing is clear: moats are the talk of the corporate town, and building one could be the difference between staying afloat and being swept away.

To read the full article in Management Today by Robert Jeffery, Every business needs to build a moat in 2026. But what exactly does that mean? click here