How important to the success of Berkshire Hathaway’s strategic planning is Buffet’s criteria for investments? Please discuss the key aspects of Strategic Planning (as discussed in the readings) related to Berkshire Hathaway.
In any organization, strategic planning is highly important for any management to utilize. In the case of Warren Buffett’s leadership, there is a need to say that he is prudent and hardworking regarding his investments all over the world. Berkshire Hathaway’s leadership was a factor that hindered managerial efficiency and profits. Warren believed that debts tend to affect the financial health of companies and people. One should only buy stocks in certain companies that exhibit solid fundamentals or have evidence of strong earnings power. Someone needs to invest in a company that has the potential for continued growth in which Berkshire Hathaway was one of them. This company gave its subsidiaries autonomy and independence mainly since they trust believed and trusted on them to run and manage the company well. Warren Buffett and Charlie Munger were able to fully trust their subsidiaries to run the company as a strategy to ensure sound business development. He believed in smart investments. In this company, Warren Buffett was one of the largest shareholders in Berkshire Hathaway, which shows his strategy in picking companies and investing in them. According to ( Anand & Jayanti, 2009) explained how Buffet diversification portfolio and the allocation strategy he had are aspects that make his investment unique.
Reference
Anand, B. N., & Jayanti, S. P. (2009). Berkshire Hathaway.
Responses
Matthew Swain
Great post-Matthew, I agree that Buffett’s leadership and investing highly influenced the strategic planning of the Berkshire Hathaway. You talked about GEICO and Nebraska Furniture Mart I, which are some investment of Buffett, making him rich. The way he plans his investment and the strategy he uses to choose the companies is mostly about the company’s financial stability and growth. The Berkshire Hathaway investment strategic planning involved the financial evaluation and analysis in which Warren was highly involved before investing. People need to understand companies’ financial growth and strategy. Thank you for your interactive post
Korin Adamson
Hello, I agree with your post that Warren investing in Berkshire Hathaway is idealistic and very profitable. I believe that leadership of a company is based on the strategy they tend to utilize. Under Warren’s investing plan, it is imperative to state that this company has changed its strategic action plan from a financial perspective. The potential of company borrowing and sorting debts means there’s financial efficiency. The leadership of Warren in investing in Berkshire Hathaway proves that he is hardworking and prudent. I appreciate your informative post.