Berkshire Hatthaway Report

6/17/2019 NTCC PROJECT
BERKSHIRE HATHAWAY

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A REPORT ON
Berkshire Hathaway
BY -
ARCHITAGARWAL
SECTION–D
BBA GENERAL 2018-21
AMITYUNIVERSITY,NOIDA
[Cite your sourcehere.]

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Declaration
I hereby declare that the information furnished above is true to the best of my knowledge. I do
hereby declare that above particulars of information and facts stated are true, correct and
complete to the best of my knowledge and belief

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Acknowledgement
I would like to express my special thanks of gratitude to my teacher who gave me the golden
opportunity to do this wonderful project on the topic, which also helped me in doing a lot of
Research and i came to know about so many new things I am really thankful to them.

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Content
Chapter 1 Introduction
Chapter 2 History
Section 1 Humble beginning of Berkshire
hathaway
Section 2 Diversification 1950 - 1960
Section 3 From large to gargantuan 1980s
Section 4 The mega-conglomerate
Chapter 3 Company
Profile
Section 1 Current Growth
Section 2 Products and Services
Section 3 Board of Directors

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Section 4 Board of Directors
Section 5 Berkshire’s performance vs the S & P 500
Section 6 Berkshire competition
Section 7 CustomerAnalysis of Berkshire Hathaway
Chapter 4 Operational analysis
Chapter 5 Marketing strategies
Section
1
Product
Section
2
price
Section
3
Place
Section
4
Promotion
Chapter 6 SWOT analysis
Section 1 Strengths of Berkshire

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Section 2 Weeknesses of Berkshire
Section 3 Opportunities of Berkshire
Section 4 Threats of Berkshire
Chapter 7 conclusion

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Chapter – 1
INTRODUCTION
berkshire Hathaway Inc. is a holding company with a growing number of branches engaged in
a myriad of commercial activities. Originally in the textile sector, Berkshire's reach extended
to insurance, retail, manufacturing, publishing and the banking sector. Controlled and directed
by Warren Buffett and Charles Munger, Berkshire hathaway has become synonymous with its
legendary investment portfolio, which has historically garnered results far in excess of the
progress of the S & P 500 index and other benchmark indices. Berkshire Hathaway Inc. and its
subsidiaries are involved in various commercial activities, the most significant of which is
property, claims and auto insurance, both directly (GEICO) and reinsurance (General
Reinsurance Corporation
Non-insurance classes include Nebraska Furniture Mart, R.C. Willey Home Furnishings, Star
Furniture and Jordon's Furniture; Borsheim's luxury jewelry retailers, Helzberg's diamond
shops and Ben Bridge's jeweler; and shoe retailers H.H. Brown, Dexter and Justin Brands.
Other Berkshire businesses include the publication like News Buffalo , World Book,
Childcraft; in production (See's Candies, Campbell Hausfeld, Kirby, Fechheimer Brothers
Company); and supplies for interior decoration (manufacturer of colors and paints Benjamin
Moore, manufacturer of Shaw Industries carpets). By investing through the insurance
subsidiaries, Berkshire often acquires significant shares of other publicly listed companies like
American Express, Capital Cities / ABC, Coca-Cola, Gillette, The Washington Post Company
and Wells Fargo. Its president, Warren Buffett, is famous for his experience in selecting titles
with hidden charm and endurance.
The company is known for its control and leadership by Warren Buffett, who serves as
chairman and chief executive, and Charlie Munger, the company's vice-chairman. In the early
part of his career at Berkshire, Buffett focused on long-term investments in publicly traded
companies, but more recently he has more frequently bought whole companies. Berkshire now
owns a diverse range of businesses including confectionery, retail, railroads, home furnishings,
encyclopedias, manufacturers of vacuum cleaners, jewelry sales, newspaper publishing,
manufacture and distribution of uniforms, and several regional electric and gas utilities.
According to the Forbes Global 2000 list and formula, Berkshire Hathaway is the third largest
public company in the world, the tenth largest conglomerate by revenue and the largest
financial services company by revenue in the world.
As of February 2019, Berkshire is the fifth-largest company in the S&P 500 Index by market
capitalization and is famous for having the most expensive share price in history with Class A
shares costing around $300,000 each. This is because there has never been a stock split in its
Class A shares and Buffett stated in a 1984 letter to shareholders that he does not intend to split
the stock.

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CHAPTER – 2
History of Berkshire Hathaway Inc.
SECTION – 1
Humble Beginnings: 1889 Through the 1940s
Berkshire Hathaway Inc. began as a textile company, incorporated as a Berkshire Cotton
Manufacturing Company in Massachusetts in 1889. In 1929, many other New England textile
manufacturers with many common properties - Valley Falls Company, Coventry Company,
Greylock Mills and Fort Dummer Mills - joined the company, which was later renamed
Berkshire Fine Spinning Associates. This operation accounted for about 25% of the production
of fine cotton fabrics in the United States. The glorious years of the New England textile
industry were numbered. The Great Depression of the 1930s contributed to its decline, as well
as competition from the South and overseas. Wages were lower in the South and workers in
the South had fewer alternatives than New England to work in textile factories. Moreover,
market factors favored the coarser types of goods produced in the South, while wage
differentials between the United States and foreign competition were often significant. The
New England textile industry recovered somewhat during the Second World War, thanks to
the military demand for its products, and had a similar brief revival during the Korean conflict.
However, the industry has declined again after each of these expansions
SECTION – 2
Diversification: 1950s-60s
In 1955 Berkshire Fine Spinning joined Hathaway Manufacturing Company, a textile
manufacturer from New Bedford, Massachusetts, dating back to 1888. The resulting company,
Berkshire Hathaway Inc., had 10,000 employees and nearly six million square feet of industrial
space but their financial performance was sad. Berkshire Hathaway closed its extensive
operations in Adams, Massachusetts, in 1958, and in the same year sold its tents in Warren,
Rhode Island, to the Pilgrim Curtain Company. The company recovered a little the following
year; a contract negotiated between Berkshire and its trade union employees in 1959 marked
the first pay rise for New England textile workers since 1956.
At the end of 1959 and 1960, the company operated profitably and had a backlog of outstanding
orders. Depressed conditions returned quickly, however, and in 1961 Berkshire reduced its

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work week to four days in several establishments and showed a loss for the year. In 1962 the
company closed three plants in Rhode Island and showed even greater losses, due to the
depression of the prices of its products. Financial bleeding continued into the mid-1960s,
despite cuts in the Berkshire workforce and extensive modernization of the plants. In 1965 a
major change came in the management of the company: an investor-led partnership Warren
Buffett had bought enough stocks to control the company, and in a resulting dispute Seabury
Stanton, a 50-year-old Berkshire employee, resigned as president. Kenneth V. Chace, a vice
president who had been with the company for 18 years, replaced Stanton. After Buffett gained
control of Berkshire, his operations were gradually moved from New Bedford to Omaha,
Nebraska, where Buffett was based.
Berkshire Hathaway was profitable in 1965 and 1966, but profits fell sharply at the beginning
of its 1967 fiscal year. The company was actively buying acquisitions to help it diversify and
in 1967 entered the insurance industry by buying the National Indemnity Company and the
National Fire & Marine Insurance Company for a total of $ 8.5 million. It was expected that
the acquisition of the two companies based in Omaha, which mainly operated motor insurance,
would help Berkshire overcome the cyclical nature of textile activity. In 1968 the company
made another major acquisition, Sun Newspapers, a group of Omaha weeklies. In 1969 he
bought the Illinois National Bank & Trust Company of Rockford. Buffett became president of
Berkshire in 1969, tended to acquire companies he loved to manage and produce, rather than
buy companies with the intention of making major changes. Both Buffett's company and its
reputation as an experienced investor have continued to grow in the decades to come
SECTION – 3
From Large to Gargantuan: 1980s
In 1980, Berkshire ran the Illinois National Bank & Trust, a move requested by the Bank
Holding Company Act of 1969. A year later the company sold Sun Newspapers to publisher
Bruce Sagan of Chicago and began working on a rather unprecedented practice. The following
year, in 1982, Berkshire set up an unusual corporate philanthropy program that received
appreciation from the shareholders allowing them to direct a portion of the company's
charitable contributions. With this policy, Buffett said he hopes to promote an "owner
mentality" among shareholders. Shareholders responded enthusiastically, with more than 95
percent of eligible shareholders participating each year since the start of the program. The direct
amount to charities of their choice was $ 2 per share in 1981 (the figure rose to $ 6 per share
by 1989). Buffett's favorite causes included population control and nuclear disarmament.
During the early 1980s the textile industry continued to languish and the insurance sector was
hit by poor sales and price reductions. The performance of Berkshire, however, was supported
by the performance of its investment portfolio. By buying significant but non-controlling

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blocks in companies such as The Washington Post Company, Media General and other shares
of GEICO Corporation, Berkshire's holdings grew in value by 21% in 1981, a year in which
the Dow Jones Industrial Average fell by 9 , 2% - E profits increased by 23 percent per share.
In 1983 Blue Chip Stamps, 60% owned, merged with Berkshire Hathaway, in the same year
the company bought 90% of Nebraska Furniture Mart, a high-volume Omaha discount retailer
and the largest American furniture store founded by a Russian immigrant, Rose Blumkin. The
Blumkin family maintained the management and remaining ownership of the store. Buffett was
known to promote it during annual shareholders' meetings, often leading buses to the store (a
practice continued to this day). Also in 1983, another insurance company, the National
Indemnity Company of Florida, was incorporated and added to the National Indemnity group.
The mid-1980s proved an intoxicating period for Berkshire with numerous monumental
agreements and the sad epilogue of its textile industry. In early 1985 the company participated
in the acquisition of the American Broadcasting Company (ABC) by Capital Cities
Communications. Buffett has agreed to put $ 517.5 million in funding for the deal and has
come out with an 18 percent stake in the merged company, Capital Cities / ABC. The investor
community saw the move as unusual for Buffett, who tended to chase undervalued companies
and stay away from expensive offers. Buffett, however, said he saw the change in the
investment climate, with good prospects for companies like television networks that had
intangible assets rather than heavy investments in plant and equipment.
Then came the end of Berkshire Hathaway's loss-losing textile operation, which the company
had tried to sell. After finding no buyers, Berkshire liquidated the conglomerate's original
business due to the increase in low-cost foreign competition. Buffett praised the efforts of
Kenneth Chace - who remained a director of Berkshire - and Garry Morrison, who had
succeeded him as president of textiles. Buffett also had kind words for union workers, who had
only made reasonable demands in view of the company's financial position.
Later that year Berkshire agreed to acquire Scott & Fetzer Company, a diversified
manufacturing and marketing company based in Cleveland, Ohio, for about $ 320 million.
Scott & Fetzer products included World Book and Childcraft encyclopedias and Kirby vacuum
cleaners. At the same time, the Berkshire insurance business underwent several changes. In a
narrow insurance market, many commercial insurance buyers needed a financially stable
company to underwrite large risks, so National Indemnity, Berkshire Hathaway's largest
insurance company, advertised in an insurance publication its willingness to write property
insurance policies and claims with a premium of $ 1 million or more. The advertisement
produced an explosion in large business for Berkshire; the company wrote $ 184.5 million in
net premiums for major accounts from August 1985 to December 1986, compared to virtually
no such activities previously
Also in 1985, Berkshire reached an agreement with the insurance company of the Fireman
fund, which allowed him a 7 percent stake in Fireman's activities. John J. Byrne, a GEICO
executive - an insurer partly owned by Berkshire and who shared a long history with Buffett -
left to become president of the fire department fund earlier this year and organized the
agreement. Another insurance move in 1985 was the establishment of the Wesco-Financial
Insurance Company by the Berkshire subsidiary to the Wesco Financial Corporation.

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In 1986 Berkshire concluded its agreement with Scott & Fetzer and purchased 84 percent of
Fechheimer Bros. Company, a manufacturer and distributor based in Cincinnati, Ohio. The
following year, while the stock market continued the rise started at the beginning of the decade,
Buffett's policy of buying undervalued stocks and holding them in the long term has borne
fruit. In August 1987 the Wall Street Journal reported that in the five years following the market
rally, the Berkshire stock portfolio had grown by 748%, far exceeding the average Dow Jones
(which rose by 233.6%) and Standard & Poor's (S & P) 500 share index (which gained 215.4
percent).
When the stock market crashed in October and canceled the year's gains, the Berkshire portfolio
outperformed the storm and rose 2.8%, while the S&P 500 index fell by 2, 5%. Shortly before
the crash, Berkshire had purchased $ 700 million of preferred stock (convertible into a common
12% stake) into Salomon Inc., the Wall Street investment company whose fortunes were
closely linked to the market. However, even after the crash, Buffett expressed his confidence
in the management of Salomon and in the intrinsic value of the investment. Another major
event in 1988 was the listing of Berkshire shares on the New York Stock Exchange (NYSE).
Although the stock had previously been traded on the over-the-counter market, the move was
designed to reduce transaction costs for shareholders.
Berkshire Hathaway became the most expensive stock on the stock market, with around $ 4,300
per share, from $ 12 a share when Buffett bought the company for the first time. The price
reached the peak of the decade of over $ 8,000 per share, but Buffett has always encouraged
buyers to be in the market for the long run. He was not part of the "I-don't-say-I-I-I" school,
because both he and Berkshire had been long-term shareholders in other companies, leading
some to see Buffett as a defender against the hostility acquisitions. During 1989 the company
acquired important shares of the Gillette Company, the USAir Group and the Champion
International Corporation, with each purchase widely interpreted as a defense against
acquisitions. Another important purchase was 6.3 percent or $ 1 billion from the Coca-Cola
Company (which is the second largest shareholder of Berkshire Coke) and 80 percent interest
in Borsheim, an Omaha jewelry store run by the Friedman family, relatives of Nebraska
Furniture Mart's Blumkins.
With the growth of Berkshire, also the recognition and reputation of Buffett as a no-frills
businessman. For many, part of Buffett's charm was expressing his opinion, even though his
opinions weren't always fashionable. Buffett's honest assessment of the situations brought him
both fans and enemies, even when he withdrew the Mutual Savings & Loan Association
of Pasadena, California, from the US League of Savings Institutions in 1989. Buffett's move
was in response to the League Pressing to obtain more indulgence during the federal rescue of
the S & L sector, which Buffett compared to a "robbery" of taxpayers. Another of Buffett's
business tricks, to the dismay of many corporate honors, was his belief that executive
compensation was tied to a company's performance, not its size

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SECTION – 4
The Mega-Conglomerate with a Down-Home Feel: 1990s
In the early 1990s, Berkshire continued its tendency to purchase complementary companies
and large blocks of shares, with the acquisition of HH Brown Shoe Company, 31.2 million
shares of Guinness PLC and 82% of Central State Indemnity in 1991, and Lowell Shoe
Company and 14.1 percent of General Dynamics Corp. in 1992. In a relative move, although
somewhat surprising, in 1991, Buffett was appointed interim president of Salomon Inc. (where
the company owned still shares). After ten months of service and a breakthrough, Buffett
happily returned to the helm of the Berkshire Hathaway full-time, although both Buffett and
Munger joined the council of the sick USAir in 1992.
The following year, HH Brown added Dexter Shoe to its holdings, Buffett sold ten million
shares of Capital Cities / ABC and net earnings marked a spectacular wave of $ 407.3 million
in 1992 (down from 439.9 million 1991 dollars to 688.1 million dollars). In 1994, Berkshire
added to the portfolio the main shareholdings of two companies (4.9% of Gannett Co., Inc. and
8.3% of PNC Bank Corp.) and Buffett admitted two expensive faux pas: a mistake by $ 222.5
million from the discharge of $ 10 million CapCities shares for $ 64 each when prices exceeded
$ 85 and suffered a $ 268.5 million devaluation for its questionable USAir shares (both Buffett
and Munger they resigned from the council of the company after a year). Although Buffett was
perhaps too optimistic with USAir and a bit pessimistic about Cap Cities, no setbacks made
more than a small ripple in the Berkshire bottom line
During the mid-1990s, Berkshire Hathaway imperceptibly changed the course from a long-
term strategic investment conglomerate to one still very interested in investments, but more
inclined towards acquiring and managing these investment opportunities. Already in 1993 in
his annual solicitation for interesting acquisitions, Berkshire had raised the stakes by including
the statement: "It would be likely to make an acquisition in the range of $ 2-3 billion". In 1995,
after the company acquired Helzberg's Diamond Shops and R.C. Willey's home furnishings
through stock exchanges, the stakes were up to $ 5 billion. Meanwhile, while the Berkshire
"permanent four" (Capital Cities / ABC, Coca-Cola, GEICO and The Washington Post) lost a
touch of luster in 1995, the retail segment more than made up for this loss with Borsheim,
Kirby, Nebraska Furniture Mart and Scott Fetzer (who has published exceptional numbers for
the entire decade) exceeding expectations.
In late 1995, Berkshire began the recruitment process of GEICO, the seventh largest private
car insurer in the nation. Buffett's long history (45 years) with GEICO returned to the
startingpoint, after years of tutoring from Ben Graham and Lorimer Davidson, 43 years after
selling his 350 original shares, and 15 years since Berkshire paid $ 45.7 million for a 33.3%
stake in GEICO (which grew to 50% in subsequent years) - the company spent 2.3 billion
dollars to make GEICO its own. With the GEICO agreement completed in January 1996, the
Berkshire Hathaway insurance segment grew both in terms of earnings and in terms of potential
profits, becoming more courageous as the company's main segment. In terms of numbers,
Berkshire closed 1995 with $ 29.9 billion of assets, a good jump from $ 21.3 billion the

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previous year, while Berkshire shares traded at $ 36,000 per share, plus of three and a half
times compared to only $ 10,000 in 1992 to Share.
The 1996 news provided for the planned issue of $ 100 million in new Class "B" shares (the
company's original shares were now classified as Class "A" shares), valued at one-thirtieth of
the price of its predecessor. The recapitalization was done in part, explained Buffett in the 1995
annual report, to discourage brokers from marketing funds and seductive customers with the
name Berkshire. Since most small investors discovered that the cost per share of Berkshire is
prohibitive, Buffett was trying to make the company's shares available at a lower price without
going through "mutual funds loaded with expenses" pretending to be "clones" of the Berkshire.
Yet what people had to remember, according to Buffett, was not an accounting value, but an
intrinsic value. By measuring intrinsic value, an economic indicator rather than an accounting
concept, investors had better control over value and regardless of whether or not something
was a good long-term risk. In these terms, Buffett hoped to double the intrinsic value per share
of Berkshire (of Class A shares) every five years, which was still a rather daunting task.
SECTION – 5
The Late 1990s
Buffett's interest in companies as acquisitions rather than investments increased in the late
1990s. Berkshire Hathaway increased its investment in the ice cream distributor International
Dairy Queen in 1998 and Allied Domecq, owner of Dunkin 'Donuts, in 1999. In 1998, however,
the company made the unusual purchase of Executive Jet, a company of aviation that started
timing. share the purchases of private jets by companies. The $ 725 million purchase brought
Berkshire Hathaway into an emerging market, something Buffett had always avoided. In a
more predictable move that year, Buffett added the $ 22 billion acquisition of General
Reinsurance Corporation to the Berkshire Hathaway insurance group. One of the top three
global real estate and claims reinsurance companies, General Re had a reputation as one of the
best managed US insurance companies.
The purchase of General King, however, contributed greatly to the poor performance of
Berkshire Hathaway in 1999. The transition to Berkshire Hathaway property was rocky:
Ronald E. Ferguson, CEO of General King, had kept the negotiations secret. Once the
agreement was signed, James Gustafson, president and general manager of General Re,
immediately resigned. Ferguson had not yet replaced him in early 2000. In the leadership
vacuum, the company's underwriters seemed to operate without purpose. In addition, General
Re was hit by a series of underwriting losses, combining a total loss of $ 1.6 billion in 1999.
Buffett's management style left the subsidiary to find its way through chaos.
Partly due to General King's losses, Berkshire Hathaway's net profit fell from $ 2.8 billion to $
1.6 billion in 1999. Earnings per share were halved. Buffett's criticism and his investment
philosophy has become more common. His insistence on holding a long-term stock was seen
by some as stubborn and misguided when the Coca-Cola stock touched a high of $ 87 per share
in 1998. A sale at that point would have meant a gain of $ 15, 7 billion for Berkshire Hathaway;
however, Buffett held the title as he dropped to $ 50 per share. Some questioned his continued

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resistance to high-tech and Internet actions, which were driving a boom in the stock market.
While the S&P 500 increased by around 20 points in 1999, the book value per share of
Berkshire Hathaway rose only 0.5%
Buffett was largely confirmed in 2000 when the high-tech bubble burst. The S & P 500 index
ended the year down around 9%, while the book value of Berkshire Hathaway rose 6.5%.
Buffett has continued its strategy of acquiring low-tech companies in banal, if tried, markets.
In 2000 Berkshire Hathaway completed the acquisitions of the energy company MidAmerican
Energy and the "rent-to-rent" furniture company CORT Business Services. Berkshire has also
added to its insurance group the acquisition of US responsibility, its jewelry retailers with Ben
Bridge Jewelers and its producers with the brick and shoe manufacturer Justin Industries.
Shortly before the end of the year, Berkshire purchased Benjamin Moore Paint for $ 1 billion
in cash and manufacturer of Johns Manville Corporation building products for about $ 1.8
billion, although both negotiations were not completed until beginning of 2001.
In 1973, Buffett warned that the bulk of Bershire Hathaway prohibited him from continuing to
grow at a rate of between 15 and 20 percent per year. That warning was premature. For the
next decade, the company expanded at that rate, sometimes much more. With the passing of
the century, however, the forecast was perhaps coming true. With a turnover of $ 34 billion,
could Berkshire Hathaway maintain its phenomenal growth rate? Perhaps most importantly,
how long would his 71-year-old Warren Buffett mind be out there driving the company?
Bibliography
G, R. (1994). the warren buffet way.
kilpatrick, a. (n.d.). the story of warren buffet.

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CHAPTER – 3
Company profile
Current Growth Scenario / Growth Patterns
Berkshire Hathaway Inc. one of the world's largest market value companies at around $ 470
billion, was punished by strong market sales this year. Its shares fell by 13%, compared to the
11% drop for the S&P 500 index, but lower than the financial peers in the Select SPDR
financial sector, which lost almost 19%, as of December 26 2018.
Major challenges in 2019
This performance reflects the insurance, transport and energy conglomerate built over several
decades by legendary investor Warren Buffett. It also reflects the decreasing value of
Berkshire's equity holdings which include large shares in companies such as Apple, American
Express (AXP) Coca-Cola (KO) and others. Now, the big question is whether Berkshire's
earnings and revenue can grow quite fast in 2019 when the stock is under intense pressure. The
price-to-book value of Berkshire, the most careful measure of the company, is the lowest since
2012.
The bright point is that analysts are predicting that Berkshire will offer solid earnings and
revenue growth in both 2019 and 2020 during a period when experts predict a strong slowdown
in the US economy

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IMAGE SOURCE
https://www.investopedia.com/thmb/j1CDZVl5gSHFFjY2S2IZhflUX34=/650x0/filters:no_upscale():
max_bytes(150000):strip_icc():format(webp)/BRK.B_XLF_SPX_chart-
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SOLID EARNING AND REVENUE GROWTH
According to Ycharts, analysts are looking for revenues up 3.5% in 2019 to $ 266.5 billion,
followed by a 4% increase the following year. Analysts have increased these estimates since
the beginning of the year. Berkshire is a complex society with revenue from many sources. In
the third quarter it recorded a turnover of $ 63.5 billion, with 77% coming from the insurance
sector, while 18% comes from railways, public services and energy.Analysts are forecasting
an increase in earnings of 5% in 2019 to $ 10.48 per share, followed by 8% growth in 2020.
Since February, analysts have increased estimates by 9% for next year and by 5 % for 2020.
Warning signs
Despite Berkshire's solid prospects for earnings growth in 2019, investors are clearly worried
about the industries in which it operates. The SPF Insurance ETF (KIE) is down 14% from its
September highs. Meanwhile, transport stocks, measured by the Dow Jones Transportation
Average, represent around 21% off.
What's Next
The stock market is currently at a heightened state of volatility, its exposure to insurance and
transportation may make its shares vulnerable if the economy deteriorates over the next two
years. Similarly, Berkshire has lost 12% and 27% respectively, including Apple and Wells
Fargo. Still, Buffett is very experienced for outperforming over the long term, making many

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investors millionaires in the process. That record may mitigate the severity of a decline in the
stock.
Michael Kramer is the Founder of Mott Capital, a registered investment adviser, and the
manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer
typically buys and holds stocks for three to five years.
Section - 2
Berkshire Hathaway Products and Services
1. Geico
This is probably the best known brand of Berkshire Hathaway and is also one of the most
important for the company's success. Berkshire's core business is insurance and Geico covers
over 22 million motor vehicles. Geico's market share has increased steadily over the past two
decades, from 2.5% in 1995 to 12% today.
2. Berkshire Hathaway HomeServices of America
This is the real estate brokerage branch of Berkshire Hathaway and is actually a collection of
35 different real estate companies throughout the United States. The company operates in 25
states and employs over 22,000 sales associates.
3. Dairy Queen
Next year, in 2018, Dairy Queen will be a subsidiary of Berkshire Hathaway for 20 years. Dairy
Queen has grown tremendously over the years and now has over 6,000 restaurants in the United
States, Canada and 18 other countries worldwide.
4. Brooks
I was hesitant to include Brooks on this list, simply because the running shoe manufacturer is
not well known to people who are not runners. Unlike other sportswear companies, Brooks is
rather specialized, produces only racing equipment and has been operating for over 100 years.
5. BNSF railway
One of the largest freight transport networks in the United States, BNSF is only smaller than
the Union Pacific Railroad and operates mainly in the western United States. The company has
44,000 employees and over 8,000 locomotives operating on approximately 32,500 miles of
tracks.
6. Clayton houses
Clayton is the largest manufacturer of built and modular homes in the United States, and was
acquired by Berkshire in 2003. In fact, the homes produced represent 70% of American homes

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that cost less than $ 150,000 and Clayton produces almost half of them . In 2016, Clayton
delivered more than 42,000 homes, representing 5% of all homes sold in the United States.
7. Duracell
Berkshire acquired Duracell from Procter & Gamble in 2014, in exchange for shares owned by
Berkshire on P & G. I would rate Duracell among the top two or three most famous brands on
this list, as the brand generates over $ 2 billion in annual revenue. It's a lot of batteries.
8. Fruit of the frame
Founded in 1851, Fruit of the Loom is certainly one of the oldest brands in America - older
than cars, light bulbs and phones - and was acquired by Berkshire Hathaway in 2002. Today
the company employs over 32,000 people and is one of the producers of the most famous
underwear in the world
9. Chef pampered
Pampered Chef is a multilevel marketing company that sells kitchen utensils, food products
and cookbooks. Acquired by Berkshire in 2002, the company has around 35,000 sellers and is
the largest direct seller of kitchen utensils and products.
10. Oriental Trading Company
The Oriental Trading Company was founded in 1932 in Omaha, Nebraska (the Berkshire base)
and is well known for its mail order catalogs full of party supplies, art and craft items, toys and
novelties various. Since e-commerce has developed, Oriental Trading, which is now ranked
among the best online retailers in the United States, has also developed.
Section - 3
Board of Directors
DIRECTORS
WARREN E. BUFFETT, president
CEO of Berkshire
CHARLES T. MUNGER
Vice President of Berkshire
SUSAN T. BUFFETT

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HOWARD G. BUFFETT,
President of Buffett Farms and BioImages, a photograph and publishing company.
MALCOLM G. CHACE,
Chairman of the Board of Directors of Bank RI, a community bank in the state of Rhode Island.
RONALD L. OLSON,
Partner of the law firm of Munger
WALTER SCOTT, JR.,
President of Level 3 Communications, a determined successor companies of Peter Kiewit Sons'
Inc. which is engaged in telecommunications and computer outsourcing.
OFFICIAL
WARREN E. BUFFETT,
President and CEO
CHARLES T. MUNGER,
Vice-President
MARC D. HAMBURG,
Vice-President, Treasurer
DANIEL J. JAKSICH,
Controller
FORREST N. KRUTTER,
Secretary

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REBECCA K. AMICK,
Director of Internal Auditing
JERRY W. HUFTON,
Tax Director
MARK D. MILLARD,
Director of financial activities
Section – 4
Berkshire Mergers and Acquisitions
Below is a list of the companies acquired by Berkshire Hathaway, under the management of
Warren Buffett and Charlie Munger.
1967
100% of the national compensation group for $ 8.6 million
1970
Cornhusker Casualty Company now Berkshire Hathaway Homestate Companies
1972
67.30% of See's Candy for $ 25 million
100% of Wesco Financial for $ 127 million
1977
100% of The Buffalo News for $ 32.5 million

P a g e | 21
1979
Precision steel warehouse
1983
Nebraska Furniture for $ 60 million ( 90 % )
1986
84% by Scott Fetzer
100% of Fechheimer Brothers for $ 315 million
1988
80% of the Borsheim jewels
1991
H. Brown
1992
82% of central state compensation
1995
100% of GEICO for $ 2.76 billion
Helzberg Diamonds
R.C.Willey Home Furnishings
1996
Kansas Bankers Security for $ 75 million.
Flight Safety International for $ 1.5 billion

P a g e | 22
1997
International Dairy Queen for $ 590 million
Star Furniture
1998
100% of General King for $ 22 billion
Netjets for $ 725 million.
1999
MidAmerican Energy for $ 1.25 billion
Jordan's Furniture
2000
United States liability insurance group
Jewel of Ben Bridge
Benjamin Moore Paint for $ 1 billion
CORT business services for $ 386 million
Johns Manville Corp for $ 1.8 billion
Justin Industries for $ 570 million
Shaw Industries
2001
Larson Juhl
MiTek Inc for $ 500 million
XTRA for $ 590 millio
Fruit of Loom for $ 835 million
2002
CTB International for $ 180 million

P a g e | 23
Garan for $ 270.6 million
The pampered chef
2003
Clayton Homes for $ 1.7 billion
McLane Company for $ 1.45 billion
2005
Medical protector for $ 825 million
Applied Underwriters
Business thread
Forest River for $ 800 million
100% of Iscar for $ 6.05 billion
TTI
2007
Boat America Corporation
Richline Group
Russell Corporation for $ 600 million
Marmon Group
2009
100% of Burlington Nothern Santa Fe for $ 44 billion
2011
100% of Lubrizol for $ 9.7 billion
Omaha Herald for $ 150 million
2012
General media for $ 142 million

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Connecticut prudential
Oriental trading company
2013
50% of H.J. Heinz for $ 12.25 billion
100% of NV Energy for $ 5.6 billion
2014
Van Tuyl Group now Berkshire Hathaway Automotive
Charter Brokerage
Duracell for $ 4.7 billion
2015
Detlev Louis Motorrad-Vertriebs GmbH
Precision castparts for $ 37.2 billion
2017
38.60% in Pilot Flying J.

P a g e | 25
Section - 5
Berkshire’s performance vs the S & P 500
Source – Berkshire Hathaway annual report 2018

P a g e | 26
Section – 6
Berkshire Competitors
Berkshire Hathaway is involved in various industrial sectors, with several competitors in each
of them. In the diversified holding sector, Berkshire competes against challengers like Leucadia
National Corporation (LUK). Because many of its assets are insurance subsidiaries, Berkshire
Hathaway is also a rival to large insurance companies like The Allstate Corporation. Berkshire
is also seen as a managerial investment company, in competition with players such as
Blackrock, Inc., and as a private equity firm, contended with the likes of KKR & Co. LP.
Buffett is the principal investor of Berkshire Hathaway and serves as president and CEO. Many
other investors in the listed company include billionaires like Bill Gates, founder and former
CEO of Microsoft Corporation, and Mexican Carlos Slim. Beyond insurance, the company's
holdings range from the food, clothing and public services sectors. Other activities include
jewelers and furniture retailers.
Leucadia National Corporation isreferred to as "Baby Berkshire". While his shares sell at lower
prices and his positions are not so large, Leucadia follows a similar business model. Like
Berkshire Hathaway, it acquires very promising assets at a value below fair value and builds
them into valuable investments.
Just as Berkshire Hathaway relies heavily on its investments in the insurance industry,
Leucadia relies heavily on its core business, the investment banking company of the Jefferies
Group, acquired in 2012. Leucadia also owns National Beef, the fourth largest beef producer
in the States United, and Garcadia, the fifteenth largest car dealer in the nation. Leucadia has
other investments in the catering and telecommunications sectors. The company is also 50%
owner of a real estate loan joint venture with Hathaway Berkshire.
In the insurance industry, Berkshire Hathaway competes through its Geico Corporation which
holds in some of the same lines of personal insurance, such as car insurance and real estate,
like Allstate. Other insurance activities of the holding company include the reinsurance giant
General Re and National Indemnity, a specialist in the insurance of commercial drivers such
as truck drivers and taxi drivers
Although Berkshire Hathaway is not officially a management investment company, it actually
plays in this space by selling and managing a portfolio of securities for its investors. Blackrock
is the largest public investment company in the world, with assets of 4.55 billion dollars. Unlike
Berkshire Hathaway, however, Blackrock does not participate in proprietary trading.
In addition, Blackrock's customer base is limited to institutional and retail investors such as
pension plans, mutual funds, insurance companies and charities. Like other investment
management companies, Blackrock provides formal mechanisms that allow investors to pool
their capital with that of other investors in order to purchase professionally managed groups of
diversified securities.

P a g e | 27
Some may not see Berkshire Hathaway as a private equity company; however, reports say that
private shareholder Henry Kravis once referred to Berkshire as "the perfect private equity
model" due to its enormous amount of money and publicly traded shares to make acquisitions.
Kravis co-founded KKR, a very important player in the private equity sector.
Indeed, just like KKR and other private equity companies, Berkshire Hathaway is indeed a
source of investment capital from wealthy individuals and institutions to invest in and acquire
shares in companies. However, private equity companies tend to be more focused on raising
these funds and managing money to ensure positive returns for shareholders.
Section - 7
Customer Analysis of Berkshire Hathaway
The development of effective marketing mix strategies depends on Berkshire Hathaway's
knowledge of his potential customer base. Strategies will be more effective if the company
understands the needs, expectations and attitudes of its customers. Detailed analysis leads to
the identification of different customer profiles or segments (as explained in detail in the next
section).
Berkshire Hathaway can follow three steps to conduct customer analysis:
First, should Berkshire Hathaway clearly define who the current and potential customers are?
In this phase, an entire group of customers is identified so that it can be divided into different
segments based on their motivations, characteristics and characteristics. Identifying potential
customers can be more demanding than current customers.
Client analysis should offer information on how the needs and expectations of different groups
differ and what the possible reasons may be.
Finally, Berkshire Hathaway should analyze how the product / service is offered to the needs
of different groups and which customer groups have the most profit and growth potential. This
information will help Berkshire Hathaway develop customer profiles and characters.
Berkshire Hathaway can consider the following factors when developing customer profiles:
Customer analysis must identify the total size of the market, including current and potential
customers that could be divided into small measurable segments.
Customer profiles must show some observable differences.The company should also conduct
behavioral analyzes to identify psychographic profiles. This involves identifying and assessing

P a g e | 28
the relative importance of the factors considered when making a purchase decision or, more
commonly, called purchasing criteria. The common purchasing criteria are: prestige,
convenience, quality and price.
Berkshire Hathaway can therefore develop customer characters. Important elements to include
in customer character development are:
Demographic information (for example, gender, family, age, place, etc.)
Favorite communication channels.
Possible influencers (publications or celebrities that follow)
CHAPTER – 8
Berkshire operational Analysis
Berkshire Hathaway is known to many. To a certain extent, this reputation is well founded,
given the success of the investments that the company has enjoyed under his leadership. Less
attention, however, has been devoted to the managerial success of Berkshire Hathaway.
By 2008, the range of companies owned by Berkshire Hathaway was unique in its diversity. It
included insurance lineup like (GEICO, Berkshire Hathaway), manufacturers (Clayton
Homes), wholesale distribution (McLane), regulated gases and electric utilities (MidAmerican)
and many companies specialized in finance, production, services and retail sales. Even more
unique was the operational structure that the company used to manage these operations. It was
a model based on the extreme decentralization of the operating authority, with responsibility
for the company performances placed entirely in the hands of local managers. While many
public companies have implemented strict controls and supervision mechanisms to ensure
management performance and regulatory compliance, Berkshire Hathaway has moved in the
opposite direction. The company had only two main requirements for operational managers: to
present information on the financial statements on a monthly basis and to send free cash flows
generated by operations to the central office. Management was not required to meet with
executives of the head office or participate in investor relations meetings; nor was it necessary
to develop strategic plans, long-term operational objectives or financial projections. Instead,
local managers were left to manage their businesses largely without corporate supervision or
control. Vice President Charles T. Munger described the Berkshire Hathaway system as a "little
less than abdication delegation".
Many of the company's operating principles were in stark contrast to those generally used by
most public companies. Company shareholders should decide whether these operating

P a g e | 29
principles shows a risk to long-term performance or whether, contrary to expert opinion, they
represent a source of competitive advantage that could be sustained in the future.
CHAPTER – 9
Marketing Strategies of Berkshire Hathaway
Berkshire Hathaway Marketing Mix:
SECTION -1
Product:
The product strategy and mix in Berkshire Hathaway's marketing strategy can be explained as
follows:
Berkshire Hathaway is a holding company. All its subsidiaries offer a wide range of products.
The company owns Net Jets, BNSF, GEICO, Dairy Queen, Fruit of the Loom, Lubrizol and
Flight Safety. The government employee insurance company (GEICO) offers vehicle
insurance, property insurance, business insurance and complementary insurance to customers.
It is the most important part of the company that owns Berkshire Hathaway. GEICO has
branches that work for the insurance of government employees: insurance, indemnity, claims,
marina and benefits. In addition, they offer automobile insurance in the United States. General
Re Corporation - offers insurance and reinsurance coverage worldwide. They offer products
through the division of individual products and group and specialty division. The company also
offers services in the railway and logistics sector. Mc Lane, another subsidiary of the company;
offers food and non-food items to the US to the customer through shops, retailers and
wholesalers. Mc Lane offers its services to Walmart through food, food service and beverage
distribution. The company also offers business services to aviation programs, media and
logistics activities. The range of financial products also includes integrated construction and
finance, furniture leasing, transport equipment leasing. Berkshire Hathaway offers a wide range
of products in its marketing mix strategy by understanding what the customer wants.
SECTION – 2
Price:

P a g e | 30
Below is the pricing strategy in the Berkshire Hathaway marketing strategy:
Berkshire Hathaway is one of the leading financial institutions in the world, able to meet the
needs of millions of people. Price is one of the most important marketing mix strategies as it
directly affects the organization's ability to compete. Existing and potential competition in the
market pushes the company to select a pricing strategy as the pricing decision offers new
opportunities and offers new possibilities. Berkshire offers a wide range of products in a
dynamic market, so price policies change according to market needs. Berkshire's net assets
during 2015 were $ 15.4 billion. The company chooses a policy of low prices to satisfy the
requirement of 14 million policyholders at GEICO. Berkshire Hathaway claims to have $ 84.80
billion in cash at the end of the third quarter of 2016. The company has successfully acquired
numerous subsidiaries and is growing exponentially.
SECTION – 3
Place:
The following is the Berkshire Hathaway distribution strategy:
Berkshire Hathaway aims to reach its customers at affordable prices. The company's
headquarters is located in Omaha, Nebraska, in the United States. They serve all over the world
through its enormous number of subsidized Acme Brick, Boat US, Dairy Queen, Fruit of the
Loom, GEICO, Forest River and many others. The company serves mainly in the insurance
sector in America.
SECTION – 4
Promotion:
The promotional and advertising strategy in Berkshire Hathaway's marketing strategy is as
follows:
Berkshire Hathaway uses numerous promotional activities for the wide range of products
offered under its own brand. The company actively uses social media platforms to offer
discounts on consumer goods, furniture, jewelery and other products and services. They also
use print media, TV commercials - Home services and Moving (2016) to advertise their offers
to reach the target customer. The company is a leader in accepting social responsibility.
Berkshire Hathaway's Corporate Social Responsibility (CSR) program includes many
initiatives. For example, McLane's "Green advantage" initiative to reduce environmental
impact. This gives an overview of the Berkshire Hathaway marketing mix

P a g e | 31
CHAPTER – 10
Swot Analysis of Berkshire Hathaway
Berkshire Hathaway Inc. is a multinational company based in Omaha, Nebraska, USA. It serves
as an investment vehicle for Warren Buffett. At the beginning of the 21st century, it was one
of the largest organizations.
Berkshire Hathaway owns companies such as Duracell, Lubrizol, Long & Foster, NetJets, Fruit
Of the Loom. It also holds a large share of companies such as Coca-Cola Company and is now
the largest shareholder of Delta Airline and United Airlines.
SECTION – 1
Strengths in the Swot analysis of Berkshire Hathaway
Expanded wallet
The Berkshire Hathaway clothing business includes distributors and manufacturers from the
number of footwear and clothing manufacturers and distributors. The clothing business
includes companies such as underwear Corp, Garan, Russell Corporation. Under the footwear
industry, there are the Chippewa boots, Justin Boots, etc.
Berkshire Hathaway also entered the building products business after acquiring Acme Building
Brand and Clayton Homes. Berkshire Hathaway acquired FlightSafety in 1996 and NetJets in
1999. Home furnishing activities are RC Willey Home Furnishings and Nebraska Furniture
Mart etc.
The expanded portfolio offers the Berkshire Hathaway a good foothold in the industry.
Attractive investments
Berkshire Hathaway has made interesting investments in its history. The company's recent
rapid growth is credited by the President's financial acumen.
Berkshire Hathaway has acquired a significant share of Apple and continues to increase its
investment in Apple. He owned 239.6 million shares of Apple.
Other investments by Berkshire Hathaway have included Coca-Cola and also those of Delta
Airlines, American Express, Phillips 66 and General Motors.

P a g e | 32
Shelter and Business Industries
Their main strength is the shelter and the business industry, Berkshire Hathaway has huge
holdings in various sectors such as production, services and retail and the main strength is the
housing and business industry .
In 1996, the company acquired GEICO, top management and leadership are known throughout
the world for its excellence.
SECTION – 2
Weaknesses in theSwot analysis of Berkshire Hathaway
Limited decisions
Warren Buffett is the leading producer of choices on the Berkshire Hathaway. Apart from this,
the choice of the maximum choice is limited to a few individuals in Berkshire. While it reduces
the chances of errors on the one hand, on the other it can have a number of negative aspects.
Buffett himself regrets some selections made in his life in which he did not focus on his crucial
advisers. These financing choices did not yield the right results or Berkshire could have been
even richer.
Acquisition and investment errors
Warren Buffett was able to make numerous more important and crucial acquisitions. However,
not all the acquisitions he made had been a success. Some of them failed and numerous failed.
Since the purchase of the fabric agency Berkshire Hathaway in Tesco, the Dexter shoe, the
Waumbec fabric, etc., Warren Buffett regrets his purchase or over-financing in those securities.
In addition, it has also ignored numerous important investment opportunities on Google and
Amazon
Investment in research and development
Investments in Research and Development are lower than those in the fastest-moving
companies within the company. Although Berkshire Hathaway is spending above the common
R&D sector, it has not been able to compete with major companies within the company in
terms of innovation.
It is a mature company that is committed to distributing goods and products based on the
functionality tested on the market

P a g e | 33
Investment in technology
Berkshire Hathaway needs more funding for new technologies. Given the growth rate and the
geographic areas in which the organization is planning to expand, Berkshire Hathaway will
have to invest extra money in technology to integrate strategies at all levels.
Technology funding is not on a par with the company's vision.
SECTION – 3
Opportunities in the Swot analysis of Berkshire
Hathaway
Profitable business
The stable cash flow in the organization allows Berkshire Hathaway to offer opportunities to
invest in the number of product segments. With greater cash flow and profits, the company
acquired in 2018, the company can spend money on new technologies as well as new product
segments
This must open a window of opportunity for Berkshire Hathaway in other product categories
New customers
In recent years, the company has invested a large amount of funds in the online platform. This
funding has opened a new sales channel for Berkshire Hathaway.
In the coming years the Berkshire Hathaway will be able to take advantage of this opportunity
with the help of better understanding its client and his needs with the help of technologies such
as big data.
The decreasing cost of transport
The cost of transportation has decreased and, due to less shipping, lower delivery costs can also
bring down the cost of Berkshire Hathaway's merchandise, thereby providing an opportunity
for the commercial enterprise - both to strengthen its profitability and to transfer the benefits
to customers to gain more market shares.
Investments in emerging economies

P a g e | 34
Berkshire should always be aware of investment opportunities within emerging economies to
identify the fastest boom. The growing Asian economies offer new possibilities for good
growth and can be valid for financing.
These economies are growing at a rapid rate and investing in them may want to offer attractive
returns near destiny. Berkshire can increase investments in countries like China, India,
Malaysia, etc.
Invest in technological brands
In addition to Apple, Berkshire has only invested in some good companies. While playing
cautiously is a good financial approach, however from time to time Berkshire should resent
being too cautious. Buffett himself does not resent himself for not investing on Google and
Amazon on a first level.
If he had been executed, he could have been richer in billions. The technology companies of
this generation have grown faster than expected. Investing in new technologies could generate
captivating returns over the long term
SECTION – 4
Threats in the Swot analysis of Berkshire Hathaway
Fluctuating economies
Trump's growing efforts in the direction of isolationism within the American economy can lead
to a similar response from other authorities, thus negatively affecting international sales.
Accountability laws in different countries are different and Berkshire Hathaway may face
various compensation claims regarding the responsibility of policies in those markets.
Currency fluctuations
Given that Berkshire Hathaway is active in several countries, it is exposed to forex fluctuations,
particularly given the unstable political climate in the range of markets around the world.
Competition
Competition and advanced technologies can also erode the Berkshire franchises and lead to
lower earnings. Each of its activities operates in a highly competitive market.

P a g e | 35
Changes in the market and the technological environment can also cause the weakening of the
brand's aggressive gain. They will have an immediate impact on his earnings
CHAPTER – 11
Conclusion
Berkshire Hathaway is an investment manager with a variety of investments in a number of
sectors. It was reported that the company made significant gains from investments during the
financial crisis. The stock has risen in recent years and is now consolidating ever higher prices.
In the last four quarters, earnings and revenues have increased. Compared to his peers and
industry, Berkshire Hathaway has been an average actor from year to year. Search for Berkshire
Hathaway to OUTPERFORM.
Bibliography
https://en.wikipedia.org/wiki/Berkshire_Hathaway
https://www.berkshirehathaway.com/
https://www.investopedia.com/terms/b/berkshire-hathaway.asp
https://www.britannica.com/topic/Berkshire-Hathaway
https://www.referenceforbusiness.com/history2/71/Berkshire-Hathaway-Inc.html
https://www.mbaskool.com/marketing-mix/products/16796-berkshire-hathaway.html
https://www.barrons.com/articles/berkshire-hathaway-shows-it-is-a-powerful-profit-machine-
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