Business strategy: moats from data

Morningstar’s latest moat methodology and Coca-Cola’s recent securities filings offer a cleaner way to assess the strategy claim circulating this week on social media: that proprietary data, expert networks and embedded workflows can be stronger defenses than product features alone. Morningstar said on March 11 that it evaluates moats through five sources — intangible assets, switching costs, network effects, cost advantage and efficient scale — and defines durability, not novelty, as the key test. Coca-Cola’s investor materials, meanwhile, show why brand and route-to-market still appear in moat discussions: the company says it sells beverages in more than 200 countries and territories through a network of bottling partners, distributors, wholesalers and retailers. ### Why are people talking about “data moats” again? Social posts this week framed proprietary data, expert networks and internal workflows as strategic assets that can be hard for rivals to copy. That argument has become common in software and AI because the underlying models and features can often be replicated faster than customer-specific data or a process embedded in day-to-day operations. (morningstar.com) Morningstar’s framework does not use the phrase “data moat” as a formal category. Instead, the research firm groups durable advantages into five buckets and asks whether those advantages can keep excess returns in place for years. In that structure, proprietary data could matter if it creates switching costs, strengthens a network effect, or supports an intangible asset, but the test is still whether the advantage lasts. (review.insignia.vc) ### What does “durability” mean in moat analysis? Morningstar says a company has a wide moat when its competitive advantage is expected to last more than 20 years, and a narrow moat when it is expected to last 10 years. The firm’s glossary says an economic moat is what allows a company to earn excess returns on capital for a long period and keep competitors at bay. David Sekera, Morningstar’s chief U.S. market strategist, said in the firm’s March 11 guide that the longer a company can generate excess returns, the more valuable that company is. (morningstar.com) Morningstar’s examples also draw a line between durable and decaying assets: patents can protect returns, but when they expire, generic competition can cut drug prices sharply, the firm said. (morningstar.com) ### Where do workflows and expert networks fit? Workday is one of Morningstar’s examples for switching costs. The firm says customers are less likely to leave when retraining employees, changing processes and taking on operational risk would be costly or disruptive. That is the clearest public-market analogue to the social-media claim that workflow can be a moat. (morningstar.com) Expert networks are harder to classify because they are usually private and company-specific. In practice, they can matter when they improve decision-making, speed or customer service in ways that become embedded in a product or operating system, but that is an inference from Morningstar’s categories rather than a separate published moat type. ### Why does Coca-Cola keep showing up in these debates? (morningstar.com) Coca-Cola’s filings give the factual basis for the example. The company’s 2025 annual report says it makes branded beverage products available in more than 200 countries and territories through independent bottling partners, distributors, wholesalers and retailers, alongside consolidated bottling and distribution operations. That scale helps explain why investors often point to Coca-Cola when discussing brand and distribution as durable advantages. (morningstar.com) Morningstar’s methodology also puts brands inside intangible assets, alongside patents and regulatory licenses. Coca-Cola is not named in the March 11 explainer, but the framework matches the way investors describe the company: a brand with pricing power supported by a distribution system built over decades rather than quarters. That conclusion is an inference from Morningstar’s published categories and Coca-Cola’s own description of its system. (investors.coca-colacompany.com) ### What is the practical test for executives and investors? Morningstar’s published test is not whether an asset sounds unique, but whether it can resist competition for 10 or 20 years. That makes social claims about “proprietary data” incomplete on their own: data that does not compound into switching costs, network effects or pricing power may not qualify as a durable moat under the firm’s framework. (morningstar.com) Coca-Cola’s investor site lists its most recent annual report as the Form 10-K filed on Feb. 20, 2026. The next concrete checkpoint for anyone testing the brand-and-distribution thesis will be the company’s next annual filing on that same investor-relations docket. (investors.coca-colacompany.com) (morningstar.com)