Defensibility
The ability of a business to maintain its competitive position and protect against competitive threats over time.
Definition
Defensibility refers to how well a company can protect its market position and prevent competitors from eroding its competitive advantages. Strong defensibility creates sustainable moats that allow companies to maintain pricing power and market share over long periods.
Sources of Defensibility
Network Effects
Product becomes more valuable with more users
Switching Costs
High cost or effort to change providers
Economies of Scale
Cost advantages from size
Brand Loyalty
Strong customer preference and trust
Real-World Example
Salesforce CRM: High switching costs and network effects
Enterprise customers invest heavily in customization and training, making it costly to switch to competitors. The platform becomes more valuable with more integrations.