Essay about Case Study : Berkshire Hathaway

1433 Words Oct 17th, 2014 6 Pages
Case Study on Berkshire Hathaway
1. Corporate strategy is about how a company generates value across different values and all other issues that might influence the company. An effective corporate strategy requires the management to know clearly the current situation of the company, where they want the company to be and how they can achieve their goals. One of the most distinctive features of Berkshire Hathaway was its diversified investment portfolio which covered insurance, housing manufacturing, wholesale distribution, electric utility and so on which enable the company to maintain profitability throughout economic cycles. The acquisition strategy of Berkshire Hathaway was an aggregation of different businesses and little attention is paid to business relatedness. The acquired companies were allowed to be run in the same way as before, and the only requirements for them was to follow Buffett’s management philosophy and Buffett was only responsible for managing assets allocation among different operations. Local managers were responsible for their own business performance and are not under strict controls and supervision of Buffett. The most important principle for Buffett’s was that the acquired companies deliver satisfactory financial results in a way consistent with that of Berkshire. Managers who sold their companies to Berkshire were more interested in the good reputation of Buffett and Berkshire. They did not only own a share of the company, but the owners of the…

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