Berkshire Hathaway SWOT Analysis.doc

Competition competition and technology can also erode

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Competition :- Competition and technology can also erode Berkshire’s franchises and result in lower earnings. Each of its businesses is operating in an intensely competitive environment. Changes in the market and technological environment can also lead to weakening of the brand’s competitive advantage. They can have a direct impact on its earnings. Economic fluctuations: Deterioration in the general economic environment can significantly reduce the operating earnings of Berkshire and impair its ability to access capital markets at reasonable costs. Economic deteriorations for prolonged periods can materially harm
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Berkshire’s most significant businesses which are subject to normal economic cycles. Traditional risks related to insurance and investment businesses :- There are several kinds of risks associated with any financial business including insurance and investment. There are several risks inherent to the insurance business. Berkshire’s tolerance for risks may result in significant underwriting losses in its insurance business. Same losses can result from degree of estimation error inherent in the process of estimating property and casualty insurance loss reserves. CONCLUSION: Berkshire Hathaway has enjoyed fast financial growth driven by growth in insurance premiums over the past five years. Apart from attractive investment which has grown fast left Warren Buffett richer by several billions, Berkshire has grown through acquisitions, both stand alone and jolt on. Moreover, the large and varied business portfolio is also a significant strength for the business. However, Warren Buffett has also made several investment errors in his life which he regrets. He also missed several important investment opportunities like Amazon and Google. To grow faster Berkshire must consider investing in technological brands. The emerging Asian economies also offer significant investment and growth opportunities that the brand can exploit. This will bring both faster growth and higher stability. Otherwise, Berkshire is in a strong financial position and has more than sufficient cash reserve. Warren Buffet is worried that with his more than 116 Billion dollars cash reserve, he is unable to find the right big brands to acquire.
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  • Fall '17
  • Berkshire Hathaway, Warren Buffett

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