An Assignment on

In spite of all the difficulties and failures during recession, why firms like
McDonalds, Wal-Mart, and Amazon.com were so successful?

Submitted to

Dr. Sayed Golam Maola

Professor, Department of Management Studies, University of Dhaka

Submitted by
Group #3
Md. Shafiqul Islam

MBA (SIM)

ID # 317

Shuvasish Dutta

MBA (SIM)

ID # 323

Md. Osman Gani

MBA (SIM)

ID # 324

Md. Wahidud Jaman Tusher

MBA (SIM)

ID # 328

Department of Management Studies, University of Dhaka

Date of Submission: May 20, 2015

Brief description on McDonalds, Wal-Mart and Amazon.com:

McDonalds
Industry
Area Covered
Founded
CEO
Sales
Headquarter
Slogan
About

Restaurant
Worldwide
May 15, 1940 in San Bernardino, California
Steve Easterbrook
US$ 28.1057 billion (2013)
Oak Brook, Illinois, U.S.
Im Lovin It
The McDonald's Corporation is the world's largest chain of hamburger fast food
restaurants, serving around 68 million customers daily in 119 countries across
35,000 outlets. The company began in 1940 as a barbeque restaurant operated
by Richard and Maurice McDonald.

Wal-Mart
Industry
Area Covered
Founded
CEO

Sales
Headquarter
Slogan
About

Retails
Worldwide
July 2, 1962 in Rogers, Arkansas, US
Doug McMillon (President & CEO)
US$ 485.651 billion (FY 2015)
Bentonville, Arkansas, U.S.
Save Money. Live Better
Wal-Mart is an American multinational retail corporation that operates a chain
of discount department stores and warehouse stores. Headquartered in
Bentonville, Arkansas, the company was founded by Sam Walton 1962
and incorporated on October 31, 1969. It has over 11,000 stores in 27 countries,
under a total 71 banners.

Amazon.com
Industry
Area Covered
Founded
CEO

Sales
Headquarter
Slogan
About

Internet: E-Commerce
Worldwide
July 6, 1994 in Seattle, Washington, US
Jeff Bezos
US$ 88.988 billion (2014)
Seattle, Washington, US
Amazon.com is an American electronic commerce company with headquarters
in Seattle, Washington. It is the largest Internet-based retailer in the United
States. Amazon.com started as an online bookstore, but soon diversified, selling
DVDs, VHSs, CDs, video and MP3 downloads/streaming, software, video
games, electronics, apparel, furniture, food, toys, and jewelry.

The Financial Crisis 2007-09

The financial crisis of 20072008, also known as the Global Financial Crisis and 2008 financial
crisis, is considered by many economists the worst financial crisis since the Great Depression of
the 1930s. It resulted in the threat of total collapse of large financial institutions, the bailout of
banks by national governments, and downturns in stock markets around the world. In many
areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged
unemployment.
Causes:
The immediate cause or trigger of the crisis was the bursting of the United States housing
bubble which peaked in approximately 20052006.
The U.S. Financial Crisis Inquiry Commission reported its findings in January 2011. It
concluded that "the crisis was avoidable and was caused by: widespread failures in financial
regulation, including the Federal Reserves failure to stem the tide of toxic mortgages; dramatic
breakdowns in corporate governance including too many financial firms acting recklessly and
taking on too much risk; an explosive mix of excessive borrowing and risk by households and
Wall Street that put the financial system on a collision course with crisis; key policy makers ill
prepared for the crisis, lacking a full understanding of the financial system they oversaw; and
systemic breaches in accountability and ethics at all levels".
Lower interest rates encouraged borrowing. From 2000 to 2003, the Federal Reserve lowered
the federal funds rate target from 6.5% to 1.0%. This was done to soften the effects of the
collapse of the dot-com bubble and the September 2001 terrorist attacks, as well as to combat a
perceived risk of deflation. As early as 2002 it was apparent that credit was fueling housing
instead of business investment as some economists went so far as to advocate that the Fed "needs
to create a housing bubble to replace the Nasdaq bubble".
Rapid increases in a number of commodity prices followed the collapse in the housing bubble.
The price of oil nearly tripled from $50 to $147 from early 2007 to 2008, before plunging as the
financial crisis began to take hold in late 2008.
Another analysis, different from the mainstream explanation, is that the financial crisis is merely
a symptom of another, deeper crisis, which is a systemic crisis of capitalism itself.
Effects:
The recession resulted in worldwide liquidity crisis.
The effects were basically in the banking industry. The crisis rapidly developed and spread into a
global economic shock, resulting in a number of European bank failures, declines in various
stock indexes, and large reductions in the market value of equities and commodities.
Some developing countries that had seen strong economic growth saw significant slowdowns.
For example, growth forecasts in Cambodia show a fall from more than 10% in 2007 to close to
zero in 2009.
The output of goods and services produced by labor and property located in the United States
decreased at an annual rate of approximately 6% in the fourth quarter of 2008 and first quarter of
2009, versus activity in the year-ago periods. The U.S. unemployment rate increased to 10.1% by
October 2009, the highest rate since 1983 and roughly twice the pre-crisis rate.

In spite of all the difficulties and failures during recession, why firms like
McDonalds, Wal-Mart, and Amazon.com were so successful?
There's no such creature as a "recession-proof" company or sector. But some businesses appear
to be recession-hardy, warding off the downturn with strong balance sheets, long-range planning
and rising global sales of products and services that people want even in scary economic
times.

Why?
Cash-short consumers may hold off buying big-ticket retail items. But they still need food,
clothes and medicine. And they can't seem to do without guilty pleasures such as alcohol,
cigarettes. This is the real fact.
But now question is why firms like McDonalds, Wal-Mart, and Amazon.com were so successful
where other firms were in difficulties in the respective industries?
Because, during recession, people expect and want best value at lowest price. And firms
like McDonalds and Wal-Mart were able to meet customers expectation because of their
capabilities. Amazon.com was in addition to its online shopping system. Amazon sells
quality products at very fair price with no bargaining where other online shopping firms
bargains with customers. One another reason in case of Amazon is that it is less time
consuming and cost efficient to shop online.
They were able to meet customers expectation because of their competitive advantage to
provide best products of best brands in lowest possible price.