Products Services Company Berkshire hathaway Inc is a

Products & Services

Company • Berkshire hathaway Inc. is a publicly owned investment manager, that oversees and manages over 70 companies. • It was found in 1889 and is based Omaha, Nebraska • Many of its subsidiaries, a company controlled by a holding company, are insurance businesses so it mainly engages in that business. • Berkshire does have final say in selecting Chief executives. But doesn’t like to get invovled with the firm’s day-to-day decisions

Company History • Berkshire hathaway can traced back to 1839 as a textile manufacturing company called the Falls Valley Company stationed in Rhode Island. • In 1929 they merged with the Berkshire Cotton manufacturing company to form the Berkshire Fine Spinning Associations • 1955 they merged with Hathaway Manufacturing Company to give us Berkshire Hathaway, the company owned a total of 15 plants employing 12, 000 with a revenue of 120 million. unfortunately 7 plants closed down by the 1960 s causing stock price to drop way below value • It wasn’t until 1963 when warren buffett obtained 49% of the shares to change the management in his favor to bring the price per share from a staggering $15 to $18 • Buffett’s idea of “Dual Roles” meant the company would to continue to operate as usual while using excess revenue to invest in other companies, but this system would not be able to compete with foreign imports of the textile industry. • Thats when in 1967 Buffett purchases two insurance companies. The reason was because Insurance companies charge premiums which allow spare cash to be further invested

Market Since Berkshire Hathaway is an investing firm, its two greatest competitors are Kohlberg Kravis Roberts (KKR & Co. L. P. ), and Black. Rock Inc. Revenue and Net Income earned for the year of 2013 BRK Rev: 182. 150 B Inc: 19. 476 B KKR Rev: 8. 896 B Inc: 691. 2 M BLK Rev: 10. 2 B Inc: 2. 932 B

Strengths & Weaknesses Berkshire’s approach of success is to seek out business and buy them with no intention to sell in hopes that they turn a profit Their biggest advantage Berkshire has is that their companies vary in products and services which allows for greater There is a risk when buying a new company Management faces difficulties due to limited knowledge of all subsidiaries and may result in poor decision making Subsidiaries also face the difficult task of reporting to new management and their corporate structure.

Chapter 4 Insight: Choosing a form of Business Ownership There are the common forms of business ownership 1. Sole Proprietorship: A business owned by 1 person 2. Partnerships: A voluntary association of two or more persons to act as co-workers 3. Corporations: Artifical person with most of the legal right of a person Special types of Business ownership 1. S-Corporation: Corporation taxed as if it was a partnership 2. Limited-Liability Company: Combines the benefits of a corporation and a partnership 3. Not-for-Profit: provide social, educational, religious, or other services, rather than to earn a profit 4. Joint Venture: an agreement between two or more persons to form a business for a specific time 5. Syndicates: temporary agreement to perform a specific task requiring a large amount of capital. 6. Mergers: The purchase of one corporation by another

Chapter 4 Insight: Forming a Corporation • Incorporation: the ab

Case Summary and chapter 4 Berkshire Hathaway came to be when Hathaway Mills formed with Berkshire Fine Spinning Associations Media General Inc. newspaper company operating in the southeast, Berkshire Hathaway purchased them for 142 M, even though they operate in different industries. Nov 13, 2014 BH acquires duracell from Procter & Gamble plus 1. 7 B dollars in exchange for shares of P&G stock estimated at 4. 7 B Horizontal Merger Conglomerate Merger:

Question Time What type of merger is Berkshire Hathaway classified under? A. Conglomerate B. Vertical C. Horizontal D. I Dunno Know