Berkshire subsidiaries are a mix of companies with instant brand name recognition, such as Dairy Queen and Fruit of the Loom, and less familiar ones such as FlightSafety, ISCAR/IMC, and Lubrizol. What unites all of them is a sense of modesty and simplicity. Berkshire’s acquisition criteria state a preference for businesses that are easy to understand, noting that those with a high degree of technology are harder to grasp. But there is much more to this “rudimentary” feature of Berkshire culture than mere personal idiosyncrasies. A focus on the rudimentary reduces the potential for wasting resources. Rudimentary businesses are also more insulated from technological onslaughts compared to technology-driven businesses. The remainder of the chapter discusses Berkshire’s acquisition of Burlington Northern Santa Fe Railway. It also details how many Berkshire subsidiaries share events in their corporate histories in which they learned the hard way the value of sticking to the basics.
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