The concept of having a wide moat of protection around a business was first coined by Warren Buffet, the financial guru and CEO of Berkshire Hathaway.  In looking for companies to acquire and bring under the Berkshire Hathaway umbrella, Mr. Buffett uses an analogy from the Middle Ages of a castle encircled by a moat of water.  The wider the moat, the greater the difficulty for a marauding army to defeat and occupy the castle.  For a company or business, the wider its moat (through a unique business model, intellectual property, cost position, position in its market, etc) the greater is its protection from the competition.  In a sense, Mr. Buffett and Berkshire Hathaway acquire companies with Blue Ocean^® characteristics.

Academic studies of companies having Blue Ocean^® characteristics show that their moat, in terms of years of operating in uncontested market space, is indeed wide.  On average, it takes 15 years, roughly a generation, before their blue-ocean approach yields to competition. ¹

1. Andrew Burke, André van Stel and Roy Thurik, "Blue Ocean vs. Five Forces", Harvard Business Review, May 2010.