Buffett’s lessons in brand franchise value

“‘Buy commodities, sell brands’ has long been a formula for business success. It has produced enormous and sustained profits for Coca-Cola since 1886 and Wrigley since 1891. On a smaller scale, we have enjoyed good fortune with this approach at See’s Candy since we purchased it 40 years ago.” (Warren Buffett, 2011 Letter to shareholders of Berkshire Hathaway)

1. Be in a position to buy inputs in a competitive market with many suppliers, but sell where you have pricing power:

2. Always praise your key managers:

“Give the credit for this performance to Chuck Huggins. Charlie and I put him in charge the day of our purchase, and his fanatical insistence on both product quality and friendly service has rewarded customers, employees and owners.” (Warren Buffett, 1999 Letter to shareholders of Berkshire Hathaway)

“Credit Brad Kinstler for taking the company to new heights since he became CEO in 2006” (Warren Buffett, 2011 Letter to shareholders of Berkshire Hathaway)

3. Try to evaluate what is the minds of customers

“See’s was a legendary West Coast manufacturer and retailer of boxed chocolates…………………….To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

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