Switching Costs, Wabco and Buffett’s Critical Companies (Tech Strategy – Podcast 85)

In this podcast, Jeffrey Towson discusses the concept of “criticality” as a type of switching cost. He specifically talks about Wabco, one of Warren Buffett’s companies that has fairly powerful B2B criticality. Wabco is a supplier of braking systems for trucks and buses, and its products are critical to the operation of these vehicles. As a result, customers are reluctant to switch to other suppliers, even if Wabco’s prices are higher. This gives Wabco a strong competitive advantage.