While hundreds of companies went bankrupt and suffered losses due to the global financial crisis, there were still many businesses that thrived thanks to knowing how to take advantage of opportunities.
The San Francisco Chronicle sees the economic cycle as a Darwinian evolution, weeding out weak companies and making the survivors stronger. That has been proven more than a year into the recession.
Steady retailers are finding their niche. Established banks are seeing more savings deposits. Financially strong tech companies are hiring at will.
Staying in business is not easy as the threat of falling sales and job cuts always lurks. However, the winner is always those who know how to seize the opportunity and maintain an innovative, sometimes daring, business strategy.
Seize the opportunity
One of the biggest winners of the recession was Wal-Mart, which slashed prices across most of its products. It was one of the few retailers to post a profit in November, with sales up 3.41% year-over-year. Wal-Mart benefited from shoppers switching to cheaper stores and focusing on essentials like groceries and toilet paper. Lower gas prices also helped, as customers were more likely to go out and shop.
Another success story is fast-food giant McDonald's, whose sales rose nearly $81.3 billion in November. The chain added healthier options to its menu and improved the quality of its food before the recession hit. McDonald's also extended its hours, opened earlier, and closed later, and as a result, sold more.
Too many beautiful premises
Kohl's and Forever 21 are a rarity among U.S. retailers: They're expanding, looking for new locations. Rivals Bombay and Sharper Image have closed stores in the past year, leaving empty spaces in malls across the country, while retailer Mervyns is in the process of liquidating.
As a result, landlords who previously made it difficult for retailers, such as having to agree to rent premises in second-tier malls if they wanted to open stores in major malls, are now willing to accommodate customers from AZ because there are too many vacant premises.
Kohl's and Forever 21 also have the advantage of leasing the space from bankrupt stores. The two retailers recently announced a partnership to lease 46 spaces from Mervyns for $6.25 million. Kohl's will occupy 31 of the spaces, and Forever 21 will move into the remaining spaces if the bankruptcy court approves the deal.
Online advertising
While most online and offline retailers are feeling the pinch of the economic downturn, some businesses are succeeding with a simple trick: increasing their online advertising, using search engines like Google. Online jewelry retailer Evesaddiction.com is a prime example.
Raymond Galeotti, who has been running the site for five years, is excited that sales are up about 25% this holiday season. Galeotti said he was paying 80 cents per click on Google ads, up from 50 cents last year. But by targeting his audience and using Google's more powerful tools, he has gained more customers. Galeotti's site now generates four new customers for every 100 clicks, double what it did last year.
Even in a recession, search engine marketing has consistently outperformed other forms of advertising, largely because it is more cost-effective and an effective way for retailers to drive customers to their stores, analysts say, according to the New York Times.
Make money with the "magical" atmosphere
While Japan's top names like Sony and Toyota are struggling with the economic crisis, another brand is raking in the cash: Tokyo Disneyland. Despite the economic downturn, Tokyo Disneyland still achieved record revenue this year, estimated at $4.2 billion in fiscal 2008, up $101.3 billion from the previous year, according to AP. "Because of the recession, many people are no longer buying houses, cars or traveling to Hawaii. Tokyo Disneyland has become a reasonable and pleasant alternative," said economist Hiroshi Wanatabe of the Daiwa Research Institute.
With an admission fee of $64, a day at this amusement park is much cheaper than most other entertainment options in Japan’s expensive capital. Many people like to visit Disneyland to enjoy the magical, fun atmosphere, forgetting about the daily worries of making a living. “Everyone here is smiling. Where else in Japan can you find a place like this?” argues Tae Morioka, a 24-year-old government employee who regularly visits Tokyo Disneyland to relieve stress.
Around the world, other Disneyland parks are also thriving as more people seek out magical escapes from reality. Despite consumer confidence at a three-decade low, revenue from Walt Disney’s theme parks rose 81 percent this year to $11.5 billion.
AP, NYT, SFC
