Why do moats become narrower? Why do they widen again? Just look at Kodak and Coca-Cola to understand.

Thirty years ago, Kodak was almost invincible in the photography industry. When people thought of taking photos, they thought of Kodak — this is called mental share, which is a true moat. Then they made a fatal mistake: allowing Fuji into the market and even letting them participate in the Olympics. What was the result? Fuji quickly caught up, and Kodak’s moat instantly turned into paper-thin.

Coca-Cola is a completely different approach. Thirty years ago, their moat was already very deep, and now it’s getting wider and wider. What’s the secret? Every time infrastructure is built in a new country, Coca-Cola’s moat expands outward by a circle. This is not passive defense but proactive occupation.

The key difference is this: Kodak guarded the existing market and was eventually eroded; Coca-Cola continuously explores new territories, and their moat grows along with it.