World’s Greatest Strategist

Warren Buffet: Berkshire Hathaway Strategies

At 83, Warren Buffet is considered a
legendary investor who remains at the top of
his game. He is a visionary value creator with
a one-of-a-kind mind. Berkshire Hathaway
looks stronger than ever, with shares near a
record high, capping a 9,000-fold increase
during his tenure.
Buffet continues to fortify Berkshire for the
future and for his yet unnamed successor. The
company interested $10 billion last year in the
Heinz buyout and keeps searching for an
“elephant size” deal to deploy a chunk of its
$42 billion in cash.
Berkshire’s next CEO will get to run a
company with more than $15 billion of
annual earnings power and an impressive
portfolio of businesses. Buffet has built a
legacy and he is still adding to it.
 Someone is sitting in the shade today
because someone planted a tree a long
time ago.
 It takes 20 years to build a reputation
and five minutes to ruin it. If you
think about that, you will do things
differently.
 Risk comes from not knowing what
you’re doing.
 It is better to hang out with people
better than you. Pick out associates
whose behavior is better than yours
and you will drift in that direction.
 Wall Street is the only place that
people ride to in a Rolls Royce to get
advice from those who take subway.
 Price is what you pay. Value is what
you get.
 Chains of habit are too light to be felt
until they are too heavy to be broken.
 There seems to be some perverse
human characteristic that likes to
make easy things difficult.

Strategic Guides:
1. Study the biography of Warren Buffet, CEO of Berkshire Hathaway. Include his
childhood, of there is something significant, his interests, his educational attainment,
professional and career orientation, and other facts that might have contributed to the
success he is enjoying now.
2. Study the beginnings of Berkshire Hathaway, the challenges it encountered through the
years, and its journey towards success.
3. From the management, result-driven, practical, and inspirational strategies implemented
by Buffet at Berkshire Hathaway, which struck you as something worth imitating?
Explain your answer.
 World’s Greatest Strategists
Yang Yuanqing: Lenovo
Yang Yuanqing, 49, has dominated the
headlines in the field of technology. He made
Lenovo the world’s biggest PC company with
sales of $37.2 billion. He bought IBM’s low-
end server division followed by Google’s
Motorola handset business. Not content to
keep gaining share at the expense of former
PC leaders, he now aims to challenge Apple
and Samsung Electronics in mobile devices, a
strategy he calls PC-plus.
Lenovo pushes hard on costs, boasting a strong
supply chain and deft inventory management.
Yang thinks he can make money-losing
Motorola profitable.
Yang began learning English after Lenovo
bought IBM’s PC division which placed the
company on the map. Today, English is its
official language and Yang is the steward of
China’s first truly global brand.
Strategies
 In the past, we were a Chinese local
brand. Now they view us a very serious
competitor – we are more competitive
in the market. This is a volume
industry, a scale industry. If you have
the scale, you have the advantage. So,
first, becoming one of the leaders is
very important from an efficiency point
of view. And, second, being a top PC
company promotes our brand.
Someone in the Chinese media asked
me how important it was to become
number one, and I asked him, “Can you
name the world’s highest mountain?”
And he replied, “Everest.” Then I
asked, “And what’s the world’s second
highest?”
 For consumers, we believe the
transactional model works best; it must
be a push model in which products are
pushed from the manufacturer, not
requested by customers. So we built
our end-to-end integrated-transaction
model in China. We have replicated
that in India across all of our functions.
In terms of growing organically there,
we have approached low-tier cities first
in an effort to be the pioneer to develop
these emerging markets. Basically, we
have been careful not to view India as
just one big emerging market – we look
at it as a number of smaller markets,
and we separated it into different tiers.

Strategic Guides:
4. Study the biography of Yang Yuanqing, CEO of Fast Lenovo. Include his childhood, if
there is something significant, his interests, his educational attainment, professional and
career orientation, and other facts that might have contributed to the success he is
enjoying now.
5. Study the beginnings of Lenovo, the challenges it encountered through the years, and its
journey toward success.
6. From the management, result-driven, practical, and inspirational strategies implemented
by Yuanqing at Lenovo, which struck you as something worth imitating? Explain your
answer
 World’s Greatest Strategist
Bernard Arnault: Louis Vuitton
Bernard Arnault is a luxury brand builder who is
many steps ahead of his generation. He is
credited to building a luxury goods juggernaut
with $40 billion in annual sales. At 65, his family
controls 46.5% of Paris-based Louis Vuitton
products, turning them into a red-hot brand. He
has added lustrous new names like Bulgari in
jewelry and Thomas Pink in shirts and has raised
them to the company’s status labels.
Because sales of spirits and leather goods were
flat the previous year, the richest man in France
is not taking it lying down. He is investing in new
designers and paying more attention to
menswear and shoe brands.
Still on his lists is to pick an heir to fill his own big
Berlutis shoes when he decides to step down.
Strategies
 We have unique products.
 Our strategy is to trust the creators.
 We do not like failures.
 Designers are closer to artists than to
engineers.
 Every time there has been crisis, we have
gained market share.
 We do not put the entire company at risk
by introducing all new products all the
time.
 If one day we must sell something, first
we want to turn it around and make it
profitable.
 Sometimes you do not succeed.
 We learned that genius is not enough to
succeed.
 The key to success is this duality –
timelessness and the utmost modernity.
 It is not enough to have a talented
designer; the management must be
inspired too. The creative process is very
disorganized; the production process has
to be very rational.
 A good product can last forever.

Strategic Guides:

7. Study the biography of Bernard Arnault, CEO of Louis Vuitton. Include his childhood, of there is
something significant, his interests, his educational attainment, professional and career orientation,
and other facts that might have contributed to the success he is enjoying now.

8. Study the beginnings of Louis Vuitton, the challenges it encountered through the years, and its
journey towards success.

9. From the management, result-driven, practical, and inspirational strategies implemented by

Arnault at Louis Vuitton, which struck you as something worth imitating? Explain your answer.
 World’s Greatest Strategist
Ma Huateng: Tencent
Ma Huateng is not big on visionary speeches,
but the company he co-founded speaks for
itself, with higher sales than Facebook and
more users than Twitter. It also ranks third
globally in five-year total stock returns among
large technology, media, and
telecommunication firms according to Boston
Consulting Group. After encountering ICQ in
the United States, Ma, 42, localized for it for
Chineses users, creating QQ. The free
messaging service with 800 million users has
become a lucrative Launchpad for online
gaming, social networking, and other
services.
Rivals are encroaching, but Ma, China’s
richest man, has stayed ahead of the trend.
Tencent is bulking up in e-commerce and
expanding abroad with the mobile chat
service, WeChat.
Strategies
 “Internet companies, big or small,
have to be aware of the industry’s
transformation and cautious about
every step in the wake of the mobile
Internet era. We are lucky that we
experienced a smooth shift from
traditional Internet to the mobile one,
and we still have space for
improvement. We should create a win-
win solution from multiple aspects
involving developers, platforms, and
partnerships.”
 “The industry is on the rise and its
beauty lies in its uncertainty, but we
are passionate and interested in
exploring the unknown.”
 “The leader of the market today may
not necessarily be the leader
tomorrow.”
 “The United States is the most
difficult market to tap in our global
campaign.
 “The booming mobile Internet
industry crates a golden opportunity
for Asian countries to shine. For the
first time, we are at the same starting
point and even take a minor leading
position over some of the American
giants such as Facebook.”

Strategic Guides:
10. Study the biography of Ma Huateng, CEO of Tencent. Include his childhood, of there is
something significant, his interests, his educational attainment, professional and career
orientation, and other facts that might have contributed to the success he is enjoying now.
11. Study the beginnings of Tencent, the challenges it encountered through the years, and its
journey towards success.
12. From the management, result-driven, practical, and inspirational strategies implemented
by Ma Huateng at Tencent, which struck you as something worth imitating? Explain your
answer.