However, the company overcame the hurdles and became successful. 1. Apple would not have gotten so profitable if it weren’t for music. After Steve Jobs returned to Apple, the iPod was the company’s first major product addition.
How did Apple get back on its feet after the Great Recession?
While selling additional premium-priced PowerMacs, Apple continued to deal with the Dotcom Bust and economic hardship. It also unveiled the posh new Titanium PowerBook G4, a laptop that was just as much of a high-priced showboat as the G4 Cube at a time when there were plenty of low-cost PC notebooks on the market.
What happened to Apple during the financial crisis of 2008?
Despite the fact that the recession is deepening and rivals’ sales are faltering, Apple Inc. stated today that it sold more than 2.5 million Macs and 4.3 million iPhones in the last three months of 2008, setting a new single-quarter revenue record.
In its first fiscal quarter, which ended Dec. 31, 2008, Apple sold 1.8 million notebooks and 728,000 desktops, a 34 percent increase for the former and a 25 percent dip for the latter over the same time previous year. Although Mac sales income was basically flat year over year, Apple sold 9% more Macs during the period than it did in the last three months of 2007.
What firms made it through the 2008 financial crisis?
Small businesses benefit from TeamLogic IT’s IT solutions and consulting services. Surprisingly, during times of uncertainty, such as the 2008 recession, the IT business has grown.
Because consumers are becoming increasingly reliant on newer technologies, this industry often does well during economic downturns. From our security to our enjoyment, technology has an impact on practically every aspect of our lives.
If you wish to start a firm, you should think about how well that industry has performed through periods of economic uncertainty. Tech, cheap stores, accounting, food, healthcare, and DIY/repairs are all doing well.
Netflix
“Of course Netflix survived the 2008 recession; it’s a gigantic corporation,” you would assume.
In reality, around the time of the Great Recession, Netflix launched a new product (the streaming service) in response to the demise of video rental outlets.
The company then continued to work on agreements with organizations such as Xbox in 2008 and 2009 so that customers may stream through such devices.
During the economic slump, it was thanks to these advances that the company was able to continue to thrive. During the 2008 recession, they actually increased memberships and subscriptions as other businesses struggled to stay afloat.
Furthermore, the year 2008 was not the first time this organization experienced a downturn. Netflix was formed before the dot-com boom burst in the early 2000s, so it had to weather the storm.
During this time, the brand experimented with new ways to appeal to their audience, whether it was through the introduction of new products or the expansion of existing ones through partnerships and collaborations.
Citigroup
The Federal Reserve performs stress tests every year to determine how much capital banks would have if they suffered significant losses.
Citigroup’s assets increased in 2014, making it one of the few banks to do so since the 2008 financial crisis.
Because they concentrated on branding and providing quality services, this bank grew in the aftermath of economic turmoil when others did not. Citigroup began to fund various community services, which aided in the development of their brand story.
In truth, marketing played a significant part in Citigroup’s capacity to recover from the 2008 financial crisis.
Lego
Lego is an intriguing case study since you may believe that toys, amusement parks, and play centers are unimportant, thus an economic downturn would have little impact on the business.
During the 2008 recession, however, Lego made the decision to grow into a global market.
While the United States was experiencing economic difficulties, the corporation focused its efforts on growing income in Europe and Asia.
During a recession, the corporation was able to achieve an all-time high profit margin by doing so. When its core market was experiencing a downturn, this company had the foresight to extend to worldwide markets.
Groupon
“Of course they survived an economic downturn,” you would think of Groupon as another company.
In 2008, though, Groupon was still a startup. In reality, the business began operations in the midst of the Great Recession. What is causing this?
Surprisingly, entrepreneurs do well during recessions since they typically meet a demand and may spend less money due to discounted prices.
During recessions, discounts are in high demand because people are looking for ways to save money wherever they can. Discounts provide consumers with a means of surviving a recession, which is why bargain retailers do well during periods of economic uncertainty.
Mailchimp
Mailchimp has been operating for nearly two decades and has weathered various economic storms. The company survived both the 2001 economic slump (when it was created) and the 2008 recession.
So, how did the brand survive and thrive in the midst of a downturn? Well, the company was created amid the 2001 financial crisis and prospered as a result of it.
The company was able to survive in 2008 because they modified their entire business approach. They switched to a freemium model, and their revenue skyrocketed.
During a recession, many clients wanted to use Mailchimp since it was free. The brand was able to develop by adapting to the times and offering a free product, and they’ve stuck to that business model ever since.
Warby Parker
Another company that was formed during the Great Recession is Warby Parker. What was the secret of their success throughout this period? They filled a massive void in the market.
While you might believe that starting a business during a recession is a bad idea, it’s actually a fantastic time to spot market gaps and pain points and fill them.
When Warby Parker recognized it was difficult to get a cheap pair of attractive glasses online, they took action.
Customers showed up even if they weren’t spending a lot of money because they met a need. Customers required an affordable glassware solution, therefore the company was marketed as affordable (which was necessary during the recession).
Even if your firm isn’t as large as these, keep in mind that many enterprise businesses today began during a recession.
Microsoft, for example, was founded following the 1970s recession. Following the economic slump of September 11, 2001, Apple relaunched its brand with new products and investments.
The global economy has always been robust, and periods of uncertainty have always passed. Although the economy will rebound, it is critical for your firm to be prepared in the event of a financial crisis.
These businesses were successful because they sought out new opportunities, expanded into new markets, adapted existing offerings, developed new products, and provided consumers with a cost-effective option. In the next economic slump, innovation and creativity can help you prosper.
How did Netflix make it through the Great Recession?
Consumers with less disposable income try to cut costs everywhere they can during a recession, sometimes significantly. People, on the whole, seek to keep their lifestyles and routines as consistent as possible. What is the solution? Finding less expensive options. Netflix provided exactly that during the 2008 financial crisis.
Netflix’s stock had risen 57 percent over the previous year, its earnings had increased by 24 percent, and its subscriptions had surpassed 9 million in 2009, at the height of the economic crisis. In comparison, the Blockbuster video rental chain lost $374 million and closed hundreds of locations during the same time period.
Netflix supplied the great product at the optimum price during the recession. Netflix was still primarily a DVD rental service delivered to your home at the time. The company’s streaming services were innovative and unique, allowing members to watch a wide variety of content from the comfort of their own homes. The fact that both the streaming and DVD rental services were significantly less expensive than traditional video rentals and expensive cable subscriptions was a key factor in their success.
Consumers were not willing to give up home entertainment despite the economic crisis. In an odd twist, during the present coronavirus epidemic, demand for streaming services is (again) expanding dramatically. What started out as a less expensive alternative to DVDs has become a critical comfort for survival and sanity.
What role does Apple play in innovation?
The successful application of fresh ideas is known as innovation. The majority of this is accomplished through research and development (R&D). R&D refers to the research and development required to discover new products or manufacturing techniques.
Improved quality: Innovation leads to the development of higher-quality items that are more appealing to customers, resulting in more sales and a better reputation.
A NEW IPHONE MODEL, FOR EXAMPLE, IS AN EXAMPLE OF INNOVATION. Every new model contains additional features that improve the user’s experience. This might feature better graphics, quicker processors, and a higher pixel camera, among other things.
THE APPLE WATCH, FOR EXAMPLE, IS AN EXAMPLE OF INNOVATION. This allowed Apple to enter the watch business and get a foothold in the burgeoning Smartwatch market.
Increase the value added: Innovation fosters the creation of highly differentiated products with a distinct selling point (USP). Because there are no identical products on the market, demand for differentiated products is inelastic. Firms with inelastic demand can raise prices without losing many clients, resulting in a bigger profit margin. Similarly, the absence of similar products to a differentiated one provides an opportunity to patent the product and secure its long-term success.
EXAMPLE: With the original iPhone model, Apple innovated, providing a significantly distinctive mobile phone that no other company offered at the time (the market was still fixed on Motorola flip phones). Because of the inelastic demand, Apple charged more than 400 for the iPhone and made a large profit margin on it. EVALUATION: Apple’s long-term success is aided by a mix of high profit margins and the purchase of various patents over the years. Profit margins that are high create more profit, which can lead to a higher R&D expenditure. A higher R&D expenditure improves the possibility of invention, which is protected by the use of patents. This means that Apple may continue to innovate without fear of losing their smartphone monopoly.
Product range expansion: Innovation stimulates the development of new items and a broader product range.
EXAMPLE: The iPhone, iPad, Macbook, iMac, and Apple Watch are all examples of Apple innovation.
Reduces costs: Innovation can help to improve and streamline operations. I can utilize less corporate resources and save money if I reinvent a process and make it faster.
FOR EXAMPLE, MANY LARGE BANKS USE COMPUTER SOFTWARE INNOVATION TO IMPROVE PROCESSES. These banks’ various technology departments improve company software to assist speed up processes.
How did Amazon weather the storm of the Great Recession?
So did Amazon: after the dotcom bust, it liquidated a number of warehouses and restructured itself, then aggressively redeemed debt when interest rates fell and its stock value surged as a strong dotcom survivor.
Which industry is immune to the downturn?
A recession-proof business can be extremely profitable for people in both good and bad times. Whatever the state of the economy or the stock market, certain company concepts, such as those listed below, have a good possibility of succeeding despite the rest of the financial doom and gloom.
Many well-known or historically successful enterprises were founded during economic downturns. The Walt Disney Company was created in the late 1920s, at the commencement of the Great Depression, and the Hewlett and Packard electronics company was founded in the late 1930s, during the second recession.
Rising interest rates and shifting GDP pose far less of a threat to the finest recession-proof enterprises mentioned below than they do to most other businesses, with many of them having the ability to do even more business than usual.
Food and Beverage Business
Because everyone still needs food and drinks to live, the food and beverage business is one of the most recession-proof industries. Because it is not a luxury that can be put aside in difficult times, enterprises in this area can thrive even in a downturn.
Who profited the most from the financial crisis of 2008?
Warren Buffett declared in an op-ed piece in the New York Times in October 2008 that he was buying American stocks during the equity downturn brought on by the credit crisis. “Be scared when others are greedy, and greedy when others are fearful,” he says, explaining why he buys when there is blood on the streets.
During the credit crisis, Mr. Buffett was particularly adept. His purchases included $5 billion in perpetual preferred shares in Goldman Sachs (NYSE:GS), which earned him a 10% interest rate and contained warrants to buy more Goldman shares. Goldman also had the option of repurchasing the securities at a 10% premium, which it recently revealed. He did the same with General Electric (NYSE:GE), purchasing $3 billion in perpetual preferred stock with a 10% interest rate and a three-year redemption option at a 10% premium. He also bought billions of dollars in convertible preferred stock in Swiss Re and Dow Chemical (NYSE:DOW), which all needed financing to get through the credit crisis. As a result, he has amassed billions of dollars while guiding these and other American businesses through a challenging moment. (Learn how he moved from selling soft drinks to acquiring businesses and amassing billions of dollars.) Warren Buffett: The Road to Riches is a good place to start.)
In 2010, how much was Netflix worth?
The stock of Netflix was trading at $7.87 at the start of the decade. Netflix exploded in popularity in 2010 and 2011, reaching a high of $43.54 by mid-2011. By mid-2012, however, concerns over Netflix’s large investments and losses had driven the stock back down to its decade low share price of $7.54. The stock took off after that and hasn’t looked back since.
And Beyond
Despite a recent dip in price, the popular streaming stock was unquestionably one of the best investments of the decade.
In fact, a $100 investment in Netflix shares in 2010 would now be worth $4,040.
Netflix is expected to grow even more in 2020, according to analysts. The 38 analysts that follow the stock have an average price target of $397.50, implying a 21.9 percent increase from present levels.
Why did Netflix’s popularity plummet in 2011?
(Image courtesy of CNN Money) Following a price raise and an announcement that the firm would break up its operations and rename the DVD rental side, Netflix’s stock price dropped in October 2011.
The corporation needs to turn things around quickly. Much of this was the responsibility of the financial department. They were well aware that the company would have to make the transition from Netflix as a DVD rental site to Netflix as a streaming video destination while also regaining its users’ trust.
The company’s key statistic, as Wells and the rest of the finance staff knew, was subscribers. Win there, and the rest will fall into place.
This necessitated that they analyze the important variables that would allow them to complete the journey. First and foremost, the organization wanted to demonstrate that it was paying attention to its clients. Second, they needed to minimize risk by leapfrogging the competitors into streaming video. Third, they needed to transform the company into its own creative force.
The finance team was probably well aware that this plan would result in short-term losses. Since its beginning in 1997, DVDs had been a profitable business line that had kept the company afloat. Its absence would have a significant impact. Finally, Netflix needed to find a method to differentiate itself from its competition, which included industry heavyweights like HBO.