<p align="justify">Berkshire Hathaway is the holding company and has multitude businesses. Originally, it is a company of many textiles milling and plants. It is operated by CEO and Chairman Warren Buffet. Its headquarter is in Omaha. Its market capitalization is $500 billion as of March 2019 and considered as one of the biggest publicly trading company across the globe. Berkshire Hathaway has the long history of keen investments and success and ranked fifth amongst the leading public companies worldwide according to market capitalization. Its stock trades in Stock exchange of New York as per two classes- shares A and shares B (Hargrave, 2019). </p>
<p align="justify">However, it is necessary for Berkshire Hathaway to consider the competitive factors which impact the business operations. Porter’s five forces helps in analyzing such factors. At first, low threat of the new entrants evaluates the competitive factors which should be considered with different business aspects. Secondly, threats of the substitute products show the other products considerations and concerns. Thirdly, bargaining power of buyers push the prices below the selling prices, whereas bargaining power of suppliers raises the prices. Lastly, rivalry of the existing players influences the business for altering the market, if there are too many competitors. These five main points helps in determining the competitive factors (Kepler, 2015). Here is the porter’s five forces analysis of Berkshire Hathaway;
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<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The bargaining power of buyers are relatively high, because of which prices needs to be lower down and this limits potential of Berkshire Hathaway from earning sustainable revenue. In case of recession, buyers purchasing power tends to decrease and so is there affordability, which decreases the demand of many companies of Berkshire. Hence, it is mandatory for the company to lower down the prices for retaining the customers. However, for the products like GEICO, See’s Candies, bargaining power of buyers are low because of loyal customers, who are willing to pay the prices it will charge. This is the positive point for the company (Kepler, 2015).
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<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">The bargaining power of suppliers are low because of high competition level among suppliers. It is beneficial for the Berkshire Hathaway. However, if the Russell, VFB (FOL), and Fruit increase the raw material costs, it will decrease the businesses’ production operations. In addition to this, if raw materials get affected by weather, prices will rise, or materials will be short in the market. Hence, changes in supply chain of the product might affect the prices negatively and so will be the prices and profit level of Berkshire (Wikiwealth, 2019). 
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<h2 align="justify">Threats of New Entrants</h2>
<p align="justify">There are high barriers to entry in the financial industry, because of the requirement of strong distribution network, which is expensive to develop and maintain. Weak distribution channels mean products are expensive to move. Moreover, the sunk costs are also high, which makes it difficult for the competitors to enter in the market due to the commitment without any guarantee of returning in the end. However, the businesses own by Berkshire have high level of competition. If the new companies have technological advancements, then the financial performance of Berkshire will be affected. Domestic and international competitors may negatively affect the profit of Berkshire (Blue Ocean, 2019).
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<h2 align="justify">Threats from the Substitute Products</h2>
<p align="justify">Every aspect of the operations of Berkshire has vey high competition. Technology and market changes by the competitors and deteriorates the earnings of Berkshire. For example, there are several insurance companies like Allstate, Farmers Insurance group, etc. GEICO needs to lower the rates. Moreover, energy, chemical and transportation industries also have many competitors (Kepler, 2015). 
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<h2 align="justify">Rivalry of Existing Players</h2>
<p align="justify">The insurance industry of automobile is very competitive, and hence competition leads to reduction in the market share. Moreover, railroad industry BNSF- Burlington Northern Santa Fe Company also operates in strong competitive market. The FOL is also very competitive which reduces the profit level. However, because of high switching cost or lack of differentiation, like GEICO, it is difficult for the businesses to have differentiation (Smith, 2019). 
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<h2 align="justify">References</h2>
<p>Blue Ocean, 2019. Berkshire Hathaway Porter Five (5) Forces Analysis. [Online], Available at: <a href="http://blueoceanuniversity.com/frontpage/portercoanalysis/25778-berkshire-hathaway">http://blueoceanuniversity.com/frontpage/portercoanalysis/25778-berkshire-hathaway</a>, [Accessed on: 21st March, 2019].<br />
Hargrave, M. 2019. Berkshire Hathaway. [Online], Available at: <a href="https://www.investopedia.com/terms/b/berkshire-hathaway.asp">https://www.investopedia.com/terms/b/berkshire-hathaway.asp</a>, [Accessed on: 21st March, 2019].<br />
Kepler, J. 2015. Berkshire Hathaway. [Online], Available at: <a href="http://jeffkepler.com/wp-content/uploads/2016/11/kepler-jeff-final-1.pdf">http://jeffkepler.com/wp-content/uploads/2016/11/kepler-jeff-final-1.pdf</a>, [Accessed on: 21st March, 2019].<br />
Smith, L. 2019. Porter five force analysis of Berkshire Hathaway. [Online], Available at: <a href="https://boards.fool.com/berkshireinsurance-porters-5-forces-16157506.aspx">https://boards.fool.com/berkshireinsurance-porters-5-forces-16157506.aspx</a>, [Accessed on: 21st March, 2019]. <br />
Wikiwealth, 2019. Berkshire Analysis- Five forces analysis. [Online], Available at: <a href="http://www.wikiwealth.com/five-forces:berkshire-hathaway">http://www.wikiwealth.com/five-forces:berkshire-hathaway</a>, [Accessed on: 21st March, 2019]. </p>