Why does CSL have a competitive advantage?

• They create products essential to the healthcare sector. Products are vaccines and therapies. 
  • No matter what happens around the world, there will always be demand for their products. Highly Inelastic demand curve from a long term perspective. 
• They can manufacture new products using cash from the balance sheet. They spend $1B in R&D and generate positive operating cash flows and net profit. Other companies have to raise cash from investors to fund their R&D. 
• They have long term relationships with government stakeholders and is classified as an "essential" business to the Australian economy. In other words, they cannot die as the government needs CSL. 
  • When the pandemic hit, CSL took on the responsibility of manufacturing the new vaccine. CSL will obtain revenues in perpetuity for manufacturing the vaccine. 
• CSL think in decades, they have a 2030 plan
  • Prospect of building Seqirus into the second-largest influenza vaccine innovator in the world. 
  • Entering new markets like Cell and Gene Therapy through the acquisition of Calimmune. 
  • To put it in their words 
    • "We see potential in the years ahead to create enhanced value and to better serve our patients through the use of data, connectivity and technologies that can improve our operations and increase our understanding of the patient experience. Today, we are taking the necessary steps to enable digital transformation throughout the business."