Academic journal article Journal of the International Academy for Case Studies

Warren E. Buffett and Berkshire Hathaway, Inc.(Instructor's Note)

Academic journal article Journal of the International Academy for Case Studies

Warren E. Buffett and Berkshire Hathaway, Inc.(Instructor's Note)

Article excerpt

CASE DESCRIPTION

The case is beneficial to students because of its emphasis on Buffett's core values. Students will see that Buffett is not only one of the richest people in the world, but he attributed his success to his value system. Furthermore, Buffett explains that what makes him the most happy is not money, but being surrounded by people that love him.

The case also gives an overview of the stages that Berkshire Hathaway goes through leading up to 2008. Financial statements are provided so the students can perform financial ratio analysis and evaluate the company's financial disposition. The current economic crisis facing the U.S. is evaluated. Students are required to evaluate Buffett's investment philosophy and make recommendations as to what moves the company should make.

CASE SYNOPSIS

The case discusses the history and background of one of the most successful entrepreneurs, Warren E. Buffett, and the company that he built, Berkshire Hathaway, Inc. The investment genius of Buffett who is affectionately called the "Oracle of Omaha" is examined. The progressions of Buffett's entrepreneurial endeavors are followed from his youth, college, Wall Street, investment partnership, and Berkshire Hathaway. The case discusses Buffett's keys to success, including his value system, and investment philosophy. Students are required to analyze the entrepreneurial personality of Buffett as well as perform a financial analysis on the company. Students are required to make recommendations on what Berkshire should do next in this fragile economy, which Buffett characterized as a recession.

The case gives an in-depth analysis of the background, personality, and history of Warren E. Buffett. Buffett's childhood and psychological makeup are discussed as well as the various influences in his life. The case is especially interesting because it follows the path of one of the most successful entrepreneurs of all time. Students have the ability to follow the life of one of the richest people in the world.

INSTRUCTORS' NOTES

Recommendations for Teaching Approaches

Students will find the case interesting from a number of dimensions (e.g., Buffett is the richest man in the world, yet he has a strong value system; Buffett's background, the companies Berkshire has a vested interest in, etc.). Most students will have used or eaten one of the many products associated with Berkshire Hathaway (e.g., Coke, Gillette, Dairy Queen). Instructors have the ability to integrate the entrepreneurial mindset into the case by taking students through Buffett's youth to adulthood. Instructors also have the ability to integrate Buffett's value system and integrate it into their teaching plan.

The case can be used in a variety of classes including undergraduate and graduate strategic management, entrepreneurship, and finance. The estimated time to read and answer the questions for the case is between 6-8 hours. Since the case covers material on financial statements, SWOT, and investment philosophies, instructors will have the ability to use the case in more than one session or just focus on one or more of these issues. Before teaching the case, students should be familiar with analyzing a company's financial statements.

Key Issues and Discussion Points

The case allows students to follow Buffett's path through life from his entrepreneurial endeavors at a young age, through his teens, college years, Wall Street, partnership, and the purchase and growth of Berkshire Hathaway. The case serves as a benchmark for students to follow in their own careers.

The case also allows students to evaluate Buffett's keys to success including his personal value system and investment methodology. There are many books and articles that have been written on Buffett; however few have evaluated his investment methodology in depth. The case allows students the ability to evaluate some of the factors that Buffett uses during his investment decisions. …

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