Berkshire Hathaway Introduction Berkshire Hathaway is an American multinational company. It holds several subsidiary companies. It is a publically listed company. The company holds its businesses of insurance group, utilities and energy group, manufacturing, service and retailing group, financial products and also holds a stake in many well-known and established companies…
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The company is now a holding company that holds many diverse subsidiaries. What is the company’s Mission Statement? What is the company’s Vision Statement? Who are the Primary Stakeholders of the company? Primary stakeholders are those who have a direct interest or stake in the organization. The stakeholders of almost all the companies are same. Stakeholders can affect or be affected by the actions of a business. The primary stakeholders of Berkshire Hathaway include the owner of the company, the employees, its customers, suppliers, its creditors, the trade unions, its stockholders and the government. The employees of Berkshire have a great stake in the organization because they are directly linked to the company’s performance (BERKSHIRE HATHAWAY, INC 2010) Similarly the stockholders share the same stake in the business of Berkshire Hathaway. What are the five forces of Competition and how they impact on the company? The five forces of competition present in the environment and that affect the competition include the competitors of a firm, bargaining power of suppliers, bargaining power of the customers, new entrants and the substitutes available. Competitors of a firm result in rivalry. ...
Berkshire Hathaway has very good relations with its suppliers. Plus the company owns so many subsidiaries that it has a large numbers of suppliers, thus resulting in a low bargaining power of the suppliers. Looking at the customers as a force, they have a high bargaining power as opposed to the suppliers. Berkshire Hathaway honors its customers in every possible way. Then comes the threat of the substitutes. Berkshire has a very diverse range of business activities and it offers so many products to so many different markets. There is a threat of substitutes but Berkshire Hathaway has a very strong financial and capital position that whenever there is an alternative investment available in the market, it does not hesitate in acquiring that alternative. Berkshire faces competition but the competition is not very huge because the number of firms present in the holding industry is not very large. There are only few holding firms that equal the size of Berkshire Hathaway. So the competition is low as compared to other industries. All the forces of competition lead to rivalry, but in the case of Berkshire these forces are not that intense and thus do not result in huge rivalry. SWOT Analysis SWOT analysis is a tool that is used to look into the strengths and weaknesses of the company. It helps to determine the opportunities and threats posed by the external environment. Basically the analysis sets a direction for the organization as to how it should use its strengths to minimize the threats posed by the external environment and also to make use of the opportunities in order to overcome its weaknesses. Though Berkshire Hathaway is well established holding company but still it is not possible that it won’t have any weaknesses or
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This essay discusses that ethics comprise morality and moral issues. Ethics should be practised are intertwined in the present corporate world. This has been brought about due to laws that have been enacted in pursuance of series of corporate scandals that were witnessed in the corporate world that included; Enron, WorldCom and Tyco companies among others.
In the last 44 years, this firm recorded an annual increase in capital of 20.3% to its owners taking on big amounts of capital and minimal debts. Between the year 2000 and 2010, the stocks of Berkshire Hathaway Company generated a return on investment of 76% against a negative of 11.3%.
Returns Berkshire Hathaway (NYSE) ?907,136.43 Microsoft (NASDAQ) ?298,812.46 General Electric (NYSE) ?671,906.79 The major factor that determines what companies pay to their shareholders as dividends is profitability. In view of this, we can conclude that the more profit a company earns, the more it is capable to pay dividends to its shareholders.
Entrepreneurs in different sectors of the economy are seen to make use of their innovative ideas to make strategic business decisions. Warren Buffet is one such person who has been selected for this essay. He is claimed to be one of the most successful entrepreneur in the financial sector and the suggestions provided by this person is adopted and accepted by most of the people operating in the business world.
Williams Company develops energy technologies, natural gas and liquids, crude oil, refined products and electricity. Also, it has been involved in FDI activity in "international energy projects located in South America and Lithuania". Some years ago, having a great potential Williams Company accepted a new business strategy aimed to penetrate into a large Energy Marketing and Trading business.
The investments of Warren Buffett are being handled by his company Berkshire Hathaway as a holding company. The investments of Warren Buffett at some point of time included investments in companies like Coca-Cola, American Express, and Gillette. Buffett had the clairvoyance not to invest in the stocks of dot.com companies, which was proved a successful strategy, as there was a crash of the values of shares of these companies subsequently.
He holds the current position since 1970 prior to which he was the director of the company. Apart from this he is also a director in Washington Post Company.
It is basically an umbrella investment company having a large number of subsidiary
This is far from the case in Berkshire Hathaway Inc. whereby the succession plan is more complex and elaborate. In order to understand Berkshire Hathaway’s plan, it is important to understand the organization’s background.
To follow the vision, the CEO plays the most important role in guiding the pathway and leading from front (Ghosh, 2012).
To talk more about CEO succession, the legendary founder of Berkshire Hathaway, Warren Buffet
The age of the Chief Executive Officer of any company actually plays a major role to shareholders because the older the person often leaves the company with fewer long-term options as the shareholders tend to shy off. Though Mr. Buffett claims that his successor will comprise a team of a CEO.
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