High Switching Costs: Porter defines switching costs as a barrier to entry that involves the one-time inconvenience or expense a buyer incurs to change over from one product or service to another. Buyers in these cases often need a big improvement in either price or performance to make the switch to another product worthwhile. Medical-device companies Biomet and Stryker benefit from high switching costs because, for example, a surgeon would have have to forgo the comfort and familiarity of doing procedures with one artificial joint product. And because the surgeon would have to be trained to use competing products, he or she would also have to contend with lost time and money resulting from not performing as many surgical procedures.

The Network Effect: The network effect occurs when the value of a particular good or service increases for both new and existing users as more people use that good or service. It can also occur when other firms design products that compliment an existing product, thereby enhancing that product’s value. For example, the fact that there are literally millions of people using eBay is the thing that both makes eBay’s service incredibly valuable and makes it all but impossible for another company to duplicate its service.

Intangible Assets: Intangible assets generally refer to the intellectual property that firms use to prevent other companies from duplicating a good or service. Of course, patents are the most common economic moat in this category. In techland, Qualcomm’s patents give it a strong moat in the cellphone industry…A strong brand name can also be an economic moat—just consider consumer-product companies like Coca-Cola and Gillette.