Look for a company that is a franchise – Buffet

Some businesses are franchises. They have high walls and deep moats around them. Such businesses usually do well in the long run. Some of course create an addiction – ITC is a case in point.

Other companies which come to mind are say Wriggley’s gum. When you are spending say Rs. 5 (or Rs. 20) on a packet, seriously you do not consider too much about competition! You do not want to pop something into your mouth just because it is a buck cheaper, do you?

Another company which fits into this Buffet definition is of course his own favorite – Gillette. Even in the Indian context Gillette has a monopoly at a class level. It caters to the middle and upper classes of population. This category of people do not really think too hard before paying for a shaving blade, gel or after shave – giving the company a huge moat.

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