1. Evolution of Modern Business
PGDM 2014-16
PGDM Trimester 1, 2014
Assignment – American Business Practices
Submitted To: Submitted By:
Prof. Santhi Perumal Neha Verma 2014173
Nidhi Jha 2014174
Nilesh Thakur 2014180
Nishant Agrawal 2014181
Oindrila Ghosh 2014185
Prateek Shreemal 2014202
Rakesh Choudhary 2014220
Rasika Dhuley 2014223

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Contents
AMERICA’S BUSINESS & ECONOMY 1900-2000..................................................................................................................................3
INTRODUCTION ....................................................................................................................................................................................3
1. BUSINESS PRACTICE INTRODUCED BY IBM ................................................................................................................................4
2. BUSINESS PRACTICE INTRODUCED BY AMAZON .........................................................ERROR! BOOKMARK NOT DEFINED.
3. BUSINESS PRACTICE INTRODUCED BY BANK OF AMERICA ....................................................................................................6
4. BUSINESS PRACTICE INTRODUCED BY BERKSHIRE HATHAWAY ............................................................................................7
5. BUSINESS PRACTICE INTRODUCED BY FORD ..............................................................................................................................8
6. BUSINESS PRACTICE INTRODUCED BY CNN................................................................................................................................9
7. BUSINESS PRACTICE INTRODUCED BY GENERAL ELECTRIC.....................................................................................................9
8. BUSINESS PRACTICE INTRODUCED BY FEDEX ..........................................................................................................................10
9. BUSINESS PRACTICE INTRODUCED BY WAL-MART ...............................................................................................................11
10. BUSINESS PRACTICE INTRODUCED BY PROCTER & GAMBLE CO .......................................................................................12
11. BUSINESS PRACTICE INTRODUCED BY MICROSOFT ............................................................................................................13
AMERICA’S BUSINESS & ECONOMY POST 2000 ...............................................................................................................................14
DOT-COM BUBBLE..............................................................................................................................................................................14
TERRORIST ATTACKS OF SEPTEMBER 11, 2001 ...........................................................................................................................15
ECONOMIC CRISIS OF 2007 (SUBPRIME CRISIS) .........................................................................................................................16

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America’s Business & Economy 1900-2000
Introduction
As the American economy developed in the 20th century, however, the gliding business mogul lost sheen as an
American ideal. The essential transformation came with the arrival of the corporation, which appeared first in
the railroad industry and then elsewhere. Business tycoons were substituted by "technocrats," high-salaried
executives who became the heads of corporations. The rise of the corporation elicited, in turn, the rise of an
organized labor movement that aided as a countervailing force to the authority and inspiration of business.
During First Industrial Revolution the average income of nonfarm workers grew by almost 100%. Land and
labor, the variety of climate, the abundant presence of railroads (as well as navigable rivers), and the natural
resources all fostered the discounted extraction of energy, fast transport, and the availability of capital that
powered Second Industrial Revolution.
The First World War aggravated the demand from the government and industry was force to help government
in the war efforts. It helped many industries such as steel, automobile, food and beverage industries in scaling
up their existing business. During the war time across all industries revenue of businesses increased many fold.
Companies like Ford, GM, Standard Oil, Coca Cola etc.
Source: http://countrystudies.us/united-states/economy-3e.htm
http://en.wikipedia.org/wiki/History_of_the_United_States_%281865%E2%80%931918%29
The Great Depression in America is one of the most defining moments of US history. While there are a few
key moments that shape the period, the cause is complex, distributed among several factors. We will discuss
some of them.
1. The Stock Market Crash: The most eminent cause of the Great Depression is the stock market crash on
Black Tuesday, October 29, 1929. Americans lost $14 billion dollars on that one day alone and more than $40
billion in the following months. This is despite millions of dollars being pumped into the market to stabilize
it. The collapse of the stock market would continue for three years before firmly regaining ground.
2. Bank Failures: In the first ten months of 1930, 744 banks failed. Throughout the entire decade of the
1930's, 9,000 banks failed and billions of dollars in depositor money went with them. Several factors
converged to decimate the banking industry; loss of money from Black Tuesday, massive withdrawal by
frightened customers, defaults on loans, and their own poor investment practices. Ultimately 4% of all money
in US banks would disappear.
3. Consumer Spending: Prior to the onset of the Great Depression, the US was already facing a downturn in
consumer spending. With the stock market crash and bank failures, these cautionary consumer practices were
dramatically increased, beginning a downward spiral where lack of demand for goods and services caused a
drop in production which in turn caused a decrease of the workforce. As unemployment rose, overall consumer
capitol fell, which further reduced consumer demand for goods and services.
Source: http://video.about.com/americanhistory/5-Causes-of-Great-Depression.htm

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The End of the Great Depression: The Great Depression was eased by Roosevelt's stimulus policies in the
New Deal. The New Deal was a series of domestic programs enacted in the United States between 1933 and
1936. They included both laws passed by Congress as well as presidential executive orders during the first term
(1933–37) of President Franklin D. Roosevelt. The programs were in response to the Great Depression, and
focused on what historians call the "3 Rs": Relief, Recovery, and Reform. That is Relief for the unemployed and
poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat
depression.
Source: http://video.about.com/history1900s/The-End-of-the-Great-Depression.htm
WWII Brought the End of the Great Depression: It was really Second World War that finally turned the
country's economic crisis around. It was essentially wartime production. Even before Pearl Harbor, before the
United States entered the war, the Lend-Lease Program meant we were financing the British economy, and
therefore allowing the British to buy all sorts of goods from the United States. That put people back to work so
that by 1940, unemployment was in the single digits. By 1942, when the United States had entered the war,
unemployment was essentially zero. American companies were getting huge amount of order from government.
This increased the number of jobs; it resulted in better purchasing power and that drives the demand for the
goods and services.
More than 21 million housing units were constructed between 1946 and 1960, and in the latter year 52% of
consumer units in the metropolitan areas owned their own homes. In 1957, out of all the wired homes
throughout the country, 96% had a refrigerator, 87% an electric washer, 81% a television, 67% a vacuum
cleaner, 18% a freezer, 12% an electric or gas dryer, and 8% air conditioning. Car ownership also soared, with
72% of consumer units owning an automobile by 1960. From 1958 to 1964, the average weekly take-home pay
of blue-collar workers rose steadily from $68 to $78 (in constant dollars). In a poll taken in 1949, 50% of all
Americans said that they were satisfied with their family income, a figure that rose to 67% by 1969.
1970s was a revolutionary decade for the USA. It comprises many infamous events and crisis such as Oil crisis
of 1973, Watergate Scandal in 1974, very high inflation, anti-war protests, Women right movement etc. But it
was decade of IT revolution as well when companies like Microsoft, Apple, Oracle and SAS Institute were
founded. These companies created a very unique products, jobs etc. and change the way IT industry was
functioning. The technological revolution of the 1980s and 1990s brought a new entrepreneurial culture that
echoes of the age of tycoons. Companies like Yahoo and Google change the way traditional IT companies doing
their businesses. These companies were more consumers centric and provided free services to the customer. All
these above mentioned IT companies are still major player of the industry.
Source: http://en.wikipedia.org/wiki/New_deal
http://en.wikipedia.org/wiki/History_of_the_United_States_%281945%E2%80%9364%29
American Society and Businesses in large confronted the crisis and converted it into opportunity. While doing
so they did created and innovated things which were not thought of before. Most of them are still thriving to
date; we will further our discussion and take ten business practices given by American companies to the world.
1. Business practice introduced by IBM
It is the tradition of IBM to develop something new that change the way people does business. We are listing
some of them that changed the lives of human being and which does not delimited to a particular industry.

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1. IBM System/360 mainframe and Standardization: Previous system does not have enough memory. So
after a certain time period they become obsolete for the firms which were using those systems. Then it was
recognized by the IBM to replace the whole product line, stop the entire project which was going on. IBM
invested USD 5 billion, which other referred as great gamble by fortune magazine. More than 60% of the world
data is residing on System/360. Through this system they put forward the concept of standardization.
Standardization is a process where a consumer is not restricted to buy all the products from one company. Now
consumer can purchase one product from let’s say company A another from company B. This had been
followed by all the company in the computer manufacturing industry.
2. Sabre: In late 1950s the airlines industry were using manual reservation because of the difficulty of
converting it into automation process. IBM worked with American Airline and created Sabre. Sabre was a
reliable and effective technology. Using Sabre, now airlines can book thousands of tickets in seconds. This
technology is not restricted to the airline business but it was spread across the industry. It is still in use and it is
used by airline, railways, stock exchange, 911 systems in New York and also used by e-commerce websites. It
has the capability to book 30000 bookings per second and can record 84000 calls per second.
3. Barcode: In late 1960s Barcode was first introduced by IBM as we know it currently. The retails sector was
trying to introduce automated scanner that can create faster environment for shopping. IBM’s engineer using the
silicon wafers installed computer at every exit. This system is used by all manufacturers while packaging of
their product. As we know this whole system has changed the way world shop.
4. IBM Personal Computer: Before concept of PC was in place no one could have imagined that a computer
can be part of individual’s life. Computers were used by big businesses to solve complex business situation or
to improve productivity in some way or other. But after introduction of PC it improves the working of each user
as computers did with business. Now people have the tool to use in complex and day to day problems. Scientists
across the globe use PC quite efficiently. The current situation is that we cannot imagine our life without PC
and it in itself becomes an industry.
Source: http://www.youtube.com/watch?v=XrhDaAmn5Uw
2. Business practice introduced by Amazon
Amazon brought a revolution in increasing the reach of the products in the USA and the world by bringing a
turn-around in its supply- chain of product portfolio. It started with sole catalogue of online book retailing.
Amazon’s supply-chain practices are discussed as below:
 Amazon.com deliver orders directly to customers from inventory that is not kept at its distribution centers
through partnerships with distributors, publishers, manufacturers, and other partners.
 Additionally, the number of third-party sellers that enable Amazon.com to offer nearly unlimited product
selection without ever purchasing the inventory. Customers go to the Amazon.com website, browse for
products, and place orders. When products are sourced from its internal distribution centers, Amazon.com
picks, packs, and ships the order. When products are sourced from a drop shipper, such as a book
distributor, the distributor packages the item in an Amazon.com box and delivers it to the customer. In this
model, Amazon.com owns the customer relationship, provides the technology, owns or purchases the
inventory, and executes the logistics of each order.
 Amazon.com as a seller model includes the Syndicated Stores program, which allows third-party companies
to sell Amazon.com products through their websites. The third-party seller network creates a supply chain
where information replaces inventory. The shipments bypass the internal distribution center network. Its IT

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systems can look into partner inventories to determine which party to assign the order. This prevents the
Amazon.com customer from experiencing a stock-out for an item. The revenue that is generated from these
transactions carries a much higher margin than revenue that requires it to physically process an order.
The leading e-commerce companies, like Flipkart, Snapdeal, ebay etc., of today are following the above
discussed business practice of amazon.
Source: http://dspace.mit.edu/bitstream/handle/1721.1/33314/62312050.pdf
3. Business practice introduced by Bank of America
In its more than century old legacy, Bank of America has changed the way banking and other financial services
have been offered by banks. We will discuss some of the very important business practices that have been
introduced by Bank of America.
1. System of Branch Bank: The practice of opening satellite branches was popularized in the early 20th
century by Amadeo Giannini, then head of the Bank of America. Bank branches became the only channel of
access to a financial institution's services. Services provided by a branch include cash withdrawals and deposits
from a demand account, financial advice through a specialist, safe deposit box rentals, bureau de change,
insurance sales (where it is allowed by law), etc. Now, all the commercial banks have large number of branches
to offer various services. It helps consumers to avail banking services with minimum effort.
Source: http://message.bankofamerica.com/heritage/#/timeline/1907
2. Magnetic Ink Character Recognition (MICR): Before the mid-1940s, cheques were processed manually
using the Sort-A-Matic or Top Tab Key method. The processing and clearance of cheques was very time
consuming and was a significant cost in cheque clearance and bank operations. As the number of cheques
increased, ways were sought for automating the process. Standards were developed to ensure uniformity in
financial institutions. By the mid-1950s, Bank of America establishes partnership with Stanford Research
Institute and General Electric Computer Laboratory to develop the first automated system to process cheques
using MICR.
MICR is a character-recognition technology used mainly by the banking industry to ease the processing and
clearance of cheques and other documents. The MICR encoding called the MICR line, is at the bottom of
cheques and other vouchers and typically includes the document-type indicator, bank code, bank account
number, cheque number, cheque amount, and a control indicator. The technology allows MICR readers to scan
and read the information directly into a data-collection device. Unlike barcodes and similar technologies, MICR
characters can be read easily by humans.
Evidently MICR is used by all banks in clearance of cheques. It helps to speed up the process of cheque
clearance and effectively save lots of money.
Source: http://message.bankofamerica.com/heritage/#/timeline/1950
http://en.wikipedia.org/wiki/Magnetic_ink_character_recognition

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4. Business practice introduced by Berkshire Hathaway
Berkshire Hathaway does not resemble the company which Warren Buffet bought during the 1960s. Berkshire
was a leading New England-based textile company, with investment appeal as a classic Ben Graham-style “net-
net” Buffet took control of Berkshire on May 10, 1965. At that time, Berkshire had a market value of about $18
million and shareholder’s equity of about $ 22 million.
Major practices adopted for success
 Continued earnings growth of operating businesses, especially as$ 1+ billion of pre-tax earnings from
Lubrizol are incorporated
 New equity investments
 Additional cash build
 Meaningful share repurchases.
 Eventually, Berkshire could win back a AAA rating
 Potential for more meaningful acquisitions and investments. If there is a double-dip recession, this becomes
more likely
 On September 26th, 2011, Berkshire announced the first formal share repurchase program in Berkshire’s
history, and only the second time Buffet has ever offered to buy back stock
 It is unusual in three ways
There is no time limit, there is no dollar cap. Buffet set a price- no higher than a 10% premium over the then
current book value of the shares. Berkshire has expertise in acquisition, below is the list of major acquisition
done by the company.
1888: Hathaway Manufacturing Company incorporates in Massachusetts.
1889: Berkshire Cotton Manufacturing Company incorporates in Massachusetts.
1929: Company merges with four other textile manufacturers and changes its name to Berkshire Fine Spinning
Associates.
1955: Berkshire Fine Spinning merges with Hathaway Manufacturing to form Berkshire Hathaway Inc.
1965: Partnership led by investor Warren Buffett purchases enough stock to control the company.
1967: Company enters the insurance business, buying National Indemnity Company and National Fire &
Marine Insurance Company.
1968: Company acquires Sun Newspapers, a group of Omaha-area weeklies.
1969: Company buys Illinois National Bank & Trust Company.
1983: Berkshire Hathaway acquires Blue Chip Stamps and 90 percent of Nebraska Furniture Mart.
1985: Berkshire liquidates its original textile operations.
1986: Berkshire acquires Scott & Fetzer Company, owner of World Book and Child craft encyclopedias as well
as Kirby vacuums, for about $320 million.
1989: Company purchases 6.3 percent ($1 billion worth) of the Coca-Cola Company, making Berkshire Coke's
second largest shareholder.
1995: Berkshire spends $2.3 billion to buy the remaining 50 percent of GEICO Corporation; Berkshire stock
trades at $36,000 per share.
1996: As share price nears $36,000, the company issues $100 million in new Class "B" stock at one-thirtieth the
value of the original stock.
1998: Class "A" stock hits $84,000 a share; the company purchases General Reinsurance for $22 billion.
Souce: http://www.referenceforbusiness.com/history2/71/Berkshire-Hathaway-Inc.html#ixzz3BPmu6rqE

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5. Business practice introduced by Ford
Ford Moto Company is recognized as one of the world’s most ethical companies by Ethisphere Institute, a
leading think tank dedicated to the advancement of best practices in business ethics, social responsibility,
anticorruption and sustainability. Let us see as to how the practices are followed in the company:
 The Ford Motor Company’s business strategy reflects the legacy of “making people’s lives better”.
 The best business practices followed at Ford are:
1. It recruits the outstanding people
2. Alan Mullay, CEO of Ford bought about “one ford” , cultural change inside Ford that is driving down cost
while also introducing price competitive products loaded with edge-cutting technology by epitomizing the
words- ‘There is no limit to what a man can do or how far he can go if he doesn’t mind who gets the credit’
3. Also taken into regard the concept of sustainability Ford defines it by –“Continue to serve” which is
achieved by offering products that customers want, and will pay for, produced by using fewer resources by
achieving cost competitiveness through superior productivity.
4. Also the Ford Motor Company is environmentally friendly. For Example, the company has been setting
records of selling highest number of cars and trucks designed around fuel efficiency that achieve lower
tailpipe emissions while being fun to drive and at the same time being price competitive.
5. The company also sees to it that the anti-corruption practices are followed
Thus as correctly stated by Bill Ford, Executive Chairman of Ford Motor Company –‘The company or the
business’s success is linked to environmental and corporate responsibility’ which is practiced thoroughly inside
the company. Now, looking at the technical aspect of the company we have:
1. Throwing light on one of the important revolution brought in by the Ford Motors -use of the assembly lines.
2. Cars changed the way people lived, worked, and enjoyed leisure time; however, what most people don’t
realize is that the process of manufacturing automobiles had an equally significant impact on industry.
3. The creation of the assembly line by Henry Ford at his Highland Park plant, introduced on December 1,
1913, revolutionized the automobile industry and the concept of manufacturing worldwide.
4. They were the first one to start it in the history of industrial revolutions. This simplified the working of the
workers there in and at the same time increased the efficiency of the company manifolds.
5. This is a very good business practice which was set up by the FORD MOTORS and is followed by many
companies from then onwards till today.
These are best business practices followed by the company which has taken it to great heights by designing &
selling products that win competitive advantage on value and values.
Source: http://ethisphere.com/worlds-most-ethical/wme-honorees/

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6. Business practice introduced by CNN
The Cable News Network (CNN) is an American basic cable and satellite television channel that is owned by
the Turner Broadcasting System division of Time Warner. CNN was the first channel to provide 24-hour
television news. It is the first all-news television channel in the United States. CNN is everywhere. It has grown
from 1.7 million homes in 1980 to 78 million U.S. homes (and 890,000 hotel rooms). CNN can be seen in 212
countries and territories around the world. It has 10 U.S. news bureaus and 27 international bureaus.
Sister channels: CNN International, CNN-IBN, CNN Airport Network, CNN Türk, CNN en Español, HLN,
CNN Chile, TNT, Turner Classic Movies, Cartoon Network, Boomerang, TruTV, TBS.
CNN has changed news system. Before CNN, events were reported in two cycles, for morning and evening
newspapers and newscasts and there was no mobiles and internet. Thus people had to wait for newspapers and
newscast to know the news. Now news knows no cycle. When a plane has crashed, or shots are fired in school,
people expect to see it immediately on all-news channels. It was not good enough to talk about it, people
wanted to see them instantly. The hunch of one visionary dramatically changed our world.
CNN was launched at 5:00 p.m. ET on June 1, 1980. After an introduction by Ted Turner, the channel's first
newscast was anchored. Burt Reinhardt, the then executive vice president of CNN, hired most of CNN's first
200 employees, including the network's first news anchor, Bernard Shaw. Since its debut, CNN has expanded
its reach to a number of cable and satellite television providers, several websites, and specialized closed-circuit
channels. The company has 36 bureaus (10 domestic, 26 international), more than 900 affiliated local stations,
and several regional and foreign-language networks around the world.
After CNN there was a rapid change in media field fueled by advancement of technology. The other news
channels that developed after CNN are Fox Network, ABC News, CNBC etc.
Source: http://www.enquirer.com/editions/2000/05/28/loc_kiesewetter.html
http://en.wikipedia.org/wiki/CNN
7. Business practice introduced by General Electric
When the United States entered World War I in 1917, the U.S. government searched for a company to develop
the first airplane engine "booster" for the fledgling U.S. aviation industry. This booster, or turbo-supercharger,
installed on a piston engine, used the engine's exhaust gases to drive an air compressor to boost power at higher
altitude.
GE accepted the challenges and in the bitter atmosphere of Pikes Peak, Colorado at 14,000 feet above sea level,
GE demonstrated a 350-horsepower, turbo-supercharged Liberty aircraft engine and entered the business of
making airplanes fly higher, faster and with more efficiency than ever before. That mountaintop test of the first
turbo-supercharger landed GE's first aviation-related government contract and paved the way for GE to become
a world leader in jet engines.
For more than two decades, GE produced turbo-superchargers that enabled aircraft, including many in service
during World War II, to fly higher, with heavier payloads. The company's expertise in turbines and turbo-
superchargers figured into the U.S. Army Air Force's decision to select GE to develop the nation's first jet
engine.

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Since then, the aircraft engines division of GE Aviation has scored many firsts. Among them: America's first jet
engine, the first turbojet engines to power flights at two and three times the speed of sound, and the world's first
high bypass turbofan engine to enter service.
Today, GE Aviation is a global provider of engines, systems, and services, with revenues of $17.6 billion in
2010. As a leader in aviation technology, GE Aviation continues to design, develop and manufacture jet
engines, components and integrated systems for military, commercial and business and general aircraft as well
as aero-derivative gas turbines for marine applications. In addition, GE Aviation is the world's leading
integrated engine maintenance resource.
Source: http://www.geaviation.com/company/aviation-history.html
8. Business practice introduced by FedEx
FedEx Corporation is an American global courier delivery Services Company headquartered in Memphis,
Tennessee. The name "FedEx" is a syllabic abbreviation of the name of the company's original air
division, Federal Express, which was used from 1973 until 2000.
In January 2000, FDX Corporation changed its name to FedEx Corporation and re-branded all of its
subsidiaries.
For example:
1. Federal Express became FedEx Express
2. RPS became FedEx Ground
3. Roberts Express became FedEx Custom Critical
4. Caliber Logistics and Caliber Technology were combined to comprise FedEx Global Logistics.
5. A new subsidiary, called FedEx Corporate Services was formed to centralize the sales, marketing, and
customer service for all of the subsidiaries.
The above differentiation of the entire company into its various categories sets the system of systematic
division, thoughtful line of action devoted to specific tasks and hence it increases the efficiency of the company.
This indirectly enables the company to give better customer service which makes them satisfied.
Another one of the best business practice followed by FedEx Corporation is that every group as stated above
(like-FedEx Express, FedEx Ground etc...) has its own color code and hence its own identification.
Let Us look at some of them:
Firstly, it is worth knowing that ‘Fed’ is always purple and the Ex is in a different color for each division and
platinum for the overall corporation use.
FedEx Express (Orange "Ex"): The original overnight courier services, providing next day air service within the
United States and time-definite international service. The Ex is orange in color here.
FedEx Ground (Green "Ex"): Guaranteed day-definite delivery within Canada and the United States at
a cost savings as compared to time-definite FedEx Express which uses a large fleet of trucks which are owned
by the independent owner/operators and drivers are independent contractors who control individual delivery
routes and territories. The Ex is green in color here.
FedEx Custom Critical: (Red "Ex"): Delivers urgent, valuable, or hazardous items using trucks and chartered
aircraft. Freight not accepted for transport includes perishable food, alcohol, livestock, household
goods, hazardous waste and money. The Ex is red in color here.

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The above examples reflect the creativity that is implemented by the FedEx Corporation to distinguish its
various divisions which not only helps the company to identify various divisions and work accordingly but also
the customer to recognize them. This approach into courier system is one of its kinds where creativity is used
for writing logos with color codes as well as this highlights the clear objective pursuing strategy of the
company.
9. Business practice introduced by Wal-Mart
The US based Wal-Mart ranked 1st in the global Fortune 500 list in the financial year 2001-02. In 2002, it
operated more than 3,500 discount stores, Sam’s clubs and supercenters in the US and more than 1170 stores in
all major countries across the world. Analysts attributed this phenomenal growth to Wal-Mart’s continued focus
on customer needs and reducing costs through efficient supply chain management practices.
The company sold its products on the internet through its website, walmart.com.
Managing the Supply-Chain, Procurement and Distribution
 Wal-Mart always emphasized the need to reduce its purchasing costs and offer the best price to its
customers. It procured goods directly from manufacturers, bypassing all intermediaries.
 It was a tough negotiator on prices and finalized a purchase deal only when it was fully confident that the
products being bought were not available elsewhere at a lower price.
 It spent a significant amount of time meeting vendors and understanding their cost structure.
 Its own warehouses directly supplied 85% of the inventory, as compared to the 50-65% for competitors.
 Shipping costs for Wal-Mart worked out to be roughly 3 % as against 5% for competitors.
 Each distribution center was divided into different sections on the basis of the quantity of goods received
and was managed the same way for both cases and palletized goods.
 As Wal-Mart used sophisticated barcode technology and hand-held computer systems, managing the center
became easier and more economical. Different barcodes were used to label different products, shelves and
bins in a center.
Logistics Management
 Wal-Mart’s logistics infrastructure was its fast and responsive transportation system.
 The distribution centers were serviced by more than 3500 company owned trucks. These dedicated trucks
fleets allowed the company to ship goods from the distribution centers to the stores within two days and
replenish the store shelves twice a week. The truck fleet was the visible link between the stores and
distribution centers.
 It believed that it needed drivers who were committed and dedicated to customer service. The company
hired only experienced drivers who had driven more than 300000 accident miles, with no major traffic
violation.
 To make its distribution process more efficient, Wal-Mart also made use of a logistics technique known as
‘cross-docking’. In this system, the finished goods were directly picked up from the manufacturing plant of
a supplier, sorted out and then directly supplied to its customers.
 The system reduced the handling and storage of finished goods, virtually eliminating the role of the
distribution centers and stores. There were five types of cross-docking.
 The system shifted focus from “supply chain” to the “demand chain”, which meant that instead of the
retailer ‘pushing’ products into the system; customer could ‘pull’ products, when and where they needed.

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This approach placed a premium on frequent, informal cooperation among stores, distribution centers and
suppliers with far less centralized control than earlier.
Inventory Management
 Wal-Mart developed an ability to cater to the individual needs of its stores. Stores could choose from a
number of delivery plans. For instance, there was an accelerated delivery system by which stores located
within a certain distance of a geographical center could receive replenishment a day.
 Wal-Mart invested heavily in IT and communications systems to effectively track sales and merchandize
inventories in stores across the country.
 With the rapid expansion of Wal-Mart stores in the US, it was essential to have good communication
system. Hence, Wal-Mart set up its own satellite communication system in 1983.
 Instead of cutting inventory across the board, Wal-Mart made full use of its IT capabilities to make more
inventories available in the case of items that customers wanted most, while reducing the overall inventory
levels.
 Wal-Mart networked its suppliers through computers. The company entered into collaboration with P&G
for maintaining the inventory in its stores and built an automated reordering system, which linked all
computers between P&G and its stores and other distribution centers.
 The computer system at Wal-Mart stores identified an item which was low in stock and sent a signal to
P&G. The system then sent a re-supply order to the nearest P&G factory through a satellite communication
system. P&G then delivered the item either to the Wal-Mart distribution center or directly to the concerned
stores.
 This collaboration between Wal-Mart and P&G was a win-win proposition for both because Wal-Mart
could monitor its stock monitor its stock levels in the stores constantly and also identify the items that were
moving fast. P&G could also lower its cost and pass on some of the savings to Wal-Mart due to better
coordination.
 Wal-Mart made use of bar coding and radio frequency technology to manage its inventories.
 In October 2001, Wal-Mart tied up with Atlas commerce for upgrading the system through the Internet
enabled technologies.
 The order management and store replenishment of goods were entirely executed with the help of computers
through the Point-Of-Sale (POS) system. Through this system, it was possible to monitor and track the sales
and merchandize stock levels on the store levels.
 It also used a centralized inventory data system using which the personnel at the stores could find out the
levels of inventories and the location of each product at any given time.
Source: http://en.wikipedia.org/wiki/Walmart
10. Business practice introduced by Procter & Gamble Co.
 Calm in the midst of storm practice – Right from the start, P&G is known to use straight headed forward
approach even when country was in the state of economic panic. Rather than worrying about present
conditions, it focused on future. For example – despite rumors of an impending civil war in the U.S., they
built a new plant to sustain their growing business. Later, they pioneered one of the nation’s first profit-
sharing programs and were among the first in American industry to invest in a research laboratory.

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 Company made of innovations – Both in product designing and marketing, P&G is known as one of the
biggest innovators of all times. While others companies focused on competition, P&G focused on research
and development, bringing out new and varied types of products to meet the market demand. For example-
IT launched first synthetic detergent which was a revolution in cleaning industry. It also introduced first
fluoride toothpaste. Also, marketing style of P&G was unique, advertising through radio soap operas,
product sampling and promotional premiums.
 Understanding of customer and pioneer approach to market research – Another of the key strengths of P&G
was there market research technique which gave them an insight of what customer expected from the
company. P&G was one of the first few companies that followed customer centric approach which is now
being widely followed in market.
 Focus on International business – In the times of heavy competition, P&G rather than expanding in same
geographic region, planned expansion in international market, building startup businesses in multiple
countries so that by 1987, P&G was known as a global brand.
2000 - Today
In the spring and summer of 2000, P&G experienced one of the most demanding challenges in its history. After
missing earnings commitments, the Company's stock declined dramatically, resulting in a loss of nearly $50
billion in market capitalization. A.G. Lafley, who became CEO in June 2000, reaffirmed P&G's Purpose and
Values and refocused the Company on the few choices necessary to get the business back on track: growing its
leading categories and brands with its largest retail customers in its top geographic markets while accelerating
growth in health, beauty and personal care and in fast-growing developing markets. In the five years that
followed, P&G increased sales more than 40%, doubled profits, generated more than $30 billion in free cash
flow, and delivered more than $70 billion in shareholder value. In 2005, P&G merged with The Gillette
Company– following the acquisitions of Clairol and Wella earlier in the decade. With a portfolio of 22 billion-
dollar brands and a market capitalization of nearly $200 billion, P&G established itself as one of the ten most
valuable companies in the world by respecting the consumer as boss and fulfilling its Purpose: touching lives
and improving life every day.
11. Business practice introduced by Microsoft
Paul Allen, Partner of Bill Gates, read an article in a magazine stating the launch of Altair 8800 computer and
decided that there was an opportunity in programming that computers operating system. And from there the
saga started.
 Focused on one single product line: Unlike Apple that was well off in market when Microsoft entered,
Microsoft decided they can prosper better if they focused only on either software or hardware and chose
software as their field.
 Licensing the product: Instead of selling their OS to IBM, Microsoft actually gave it on licensed basis,
which proved to be a really good step as since every computer was running of Microsoft owned OS,
company got its great share of recognition.
 Innovation: Microsoft is a trendsetter in the field of software’s due to its innovative techniques. It brought
out the change in personal computers from the time where a computer was supposedly for geeks and
hobbyist to something everyone can use. In November, 1985 Microsoft revealed its new platform –
Windows. It would take another ten years until they revealed what most people consider the first truly user-
friendly version; in August 1995 Bill Gates launched Windows 95, and with all of its beauty, bells, and
whistles, it remains an industry joke that his demo machines crashed (and that you needed to press Start to

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turn it off). Of course Windows 95 was still considered a home version, and although it was for the first
time included in the same box, required an underlying version of MS-DOS to load before it did.
Shortly thereafter Windows NT was launched. NT was a pure business operating system that would allow IT
administrators to control much of it centrally. It was their goal, however, to bring these two platforms together
into one single environment. In late 2001 that would become a reality with Windows XP, which although it did
have a Home Edition and a Professional Edition, sat on the same kernel.
Windows XP was the first operating system that most people would use, and by that we mean that shortly after
its release the world of ‘personal computers’ hit a tipping point, and during the ten years that followed its
release all of the pieces of the history of an industry would come together – computers, the Internet,
interconnected applications – to a point where nearly everyone in the developed world has and uses a computer,
and people who short years before would have handed tasks such as e-mailing and writing documents to
secretaries are now doing it all themselves. Grandmothers who just a few years before were afraid of computers
are using Facebook and Skype to stay in touch not only their immediate families but also with friends and
family far and wide. The (developed) world is on-line, and while so many of the tools we use to make our lives
easier are not from Microsoft, without Microsoft Windows – a single platform so pervasive so as to run on over
ninety percent of desktop computers (as well as some seventy-five percent of servers) it would be difficult to
see how all of these changes – indeed how the tipping point that allowed them all to happen – could have
happened without Microsoft.
With that being said, the single most popular commercial software package (or software family, as there are
different editions) that gets installed on Windows-based computers is Microsoft Office. The Office Suite at its
core consists of a word processor (Microsoft Word), spreadsheet (Microsoft Excel), and presentation package
(Microsoft PowerPoint). There are competitive packages to each of these, as well as to the plethora of
applications that are included in various other editions of the package. Some of these, such as Open Office, are
even free. Yet corporations continue to buy licenses for the Microsoft offering. It is certainly not because
corporations are fiscally irresponsible, it is simply that the products are designed to work together from the
ground up, and while Open Office on Windows was brought over from the open-source world, Office was built
specifically for Windows, by the company that makes Windows. As the industry continues to evolve ‘into the
cloud’ Microsoft has invested heavily in web-integration of the suite, including the ability to store and work on
documents on-line, as well as both private- and public-cloud versions of the most popular applications of the
Office suite. They were not the first to release on-line, subscription-based (or free) applications… but no other
company offers the level of on-line and local integration that allows the end-user to work how he wants, where
he wants.
America’s Business & Economy Post 2000
Dot-com Bubble
Result of rapid rise in equity markets fueled by investments in internet-based companies. During the dotcom
bubble of the late 1990s, the value of equity markets grew exponentially, with the technology-dominated
Nasdaq index rising from under 1,000 to 5,000 between 1995 and 2000.
The dotcom bubble grew out of a combination of the presence of speculative or fad-based investing, the
abundance of venture capital funding for startups and the failure of dotcoms to turn a profit. Investors poured
money into internet startups during the 1990s in the hope that those companies would one day become

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profitable, and many investors and venture capitalists abandoned a cautious approach for fear of not being able
to cash in on the growing use of the internet.
What Was It?
 A boom in the share prices of certain industry followed by a certain drop.
 Investors put high bid on the shares of these companies driving the value higher than the fair value of the
shares.
How Did It Happened
 Rise in the number of internet users led to the increase in set up of internet-based companies known as
dotcoms.
 In 1999 more than 457 IPO’S were there in the US of which mostly were internet based companies and
more than 100 stock prices doubled on their first day of trading.
Reasons for the Bubble
 Majority of investors were overly optimistic retail investors and not wise and experienced institutions.
 Dotcoms sustained losses to gain market share through network effect.
 Early successes made investors more eager to invest in dotcoms.
Cause for the Burst
 Dotcoms had exhausted all the profits raised through IPO’S and still failed to generate profits.
 The internet served an easy access to trading for a lot of traders who lacked the required experience. Their
trial and error methods of trading lead to losses in the stock trading market.
 The investment bankers had the research firms put not so honest ratings on the stocks, thus leading to an
overall loss of wealth in the market.
Source: http://www.stockpickssystem.com/2000-stock-market-crash/
http://www.investopedia.com/terms/d/dotcom-bubble.asp
Terrorist Attacks of September 11, 2001
The September 11 attacks were a series of four synchronized terrorist attacks propelled by the Islamic terrorist
group al-Qaeda upon the United States in New York City and the Washington, D.C., metropolitan area on
Tuesday, September 11, 2001. The attacks killed almost 3,000 people and caused at least $10 billion in property
and infrastructure damage.
Four passenger airliners were hijacked by 19 al-Qaeda terrorists so they could be flown into buildings in suicide
attacks. Two of those planes, American Airlines Flight 11 and United Airlines Flight 175, were crashed into the
North and South towers, respectively, of the World Trade Center complex in New York City. Within two hours,
both towers collapsed with debris and the resulting fires causing partial or complete collapse of all other
buildings in the WTC complex, as well as significant damage to ten other large surrounding structures. A third
plane, American Airlines Flight 77 was crashed into the Pentagon, leading to a partial collapse in its western
side. The fourth plane, United Airlines Flight 93, was targeted at Washington, D.C., but crashed into a field near
Shanksville, Pennsylvania.

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Effect on Economy
The attacks had a significant economic impact on United States and world markets. The stock exchanges did not
open on September 11 and remained closed until September 17. Reopening, the Dow Jones Industrial Average
(DJIA) fell 684 points, or 7.1%, to 8921, a record-setting one-day point decline. By the end of the week, the
DJIA had fallen 1,369.7 points (14.3%), at the time its largest one-week point drop in history. In 2001 dollars,
U.S. stocks lost $1.4 trillion in valuation for the week.
In New York City, about 430,000 job-months and $2.8 billion dollars in wages were lost in the three months
after the attacks. The economic effects were mainly on the economy's export sectors. The city's GDP was
estimated to have declined by $27.3 billion for the last three months of 2001 and all of 2002. The U.S.
government provided $11.2 billion in immediate assistance to the Government of New York City in September
2001 and $10.5 billion in early 2002 for economic development and infrastructure needs. Also hurt were small
businesses in Lower Manhattan near the World Trade Center, 18,000 of which were destroyed or displaced,
resulting in lost jobs and their consequent wages. Assistance was provided by Small Business Administration
loans, federal government Community Development Block Grants, and Economic Injury Disaster Loans. Some
31,900,000 square feet (2,960,000 m2) of Lower Manhattan office space was damaged or destroyed. Many
wondered whether these jobs would return, and if the damaged tax base would recover. Studies of the economic
effects of 9/11 show the Manhattan office real-estate market and office employment were less affected than first
feared, because of the financial services industry's need for face-to-face interaction.
North American air space was closed for several days after the attacks and air travel decreased upon its
reopening, leading to a nearly 20% cutback in air travel capacity, and exacerbating financial problems in the
struggling U.S. airline industry.
The September 11 attacks also indirectly led to the U.S. wars in Afghanistan and Iraq, as well as additional
homeland security spending, totaling at least $5 trillion.
Source: http://en.wikipedia.org/wiki/September_11_attacks#Economic
Economic Crisis of 2007 (Subprime Crisis)
Unfortunately, in 2008, the notion that home prices do not decline turned out to be incorrect; home prices began
to slide in 2006 and by 2008, they had declined at rates not seen since the Great Depression.
By 2008, home prices were down 20% from their 2006 peaks, and in some hard-hit areas, that number was even
higher.
As prices began to decline, homeowners who had thought and planned to sell for a profit found themselves
unable to do so. Other homeowners found that the outstanding balance on their mortgages was greater than
the market value of their homes. This condition, known as an "upside down" mortgage, reduced the incentive
for homeowners to continue to make their mortgage payments.
One particular corner of the housing sector that experienced a dramatic bubble and subsequent collapse was the
subprime mortgage market. Subprime mortgages are issued to households with below-average credit or income
histories and are generally considered more risky than traditional "prime" mortgages. Although they constitute a
minority of the overall market, subprime mortgages became increasingly important over the years. Many people
who took out subprime mortgages during the real estate boom did so with the hope of "flipping" the house for a
large gain; in fact, this tactic worked well when home prices were soaring. Other subprime borrowers were

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lured into their mortgages by the initially low payments, but when these "teaser" rates reset to current market
rates, many homeowners could not afford the new, much higher payments.
Investors soon began to question whether financial institutions knew the true extent of the losses on their books.
This uncertainty led to sharp declines in the stock prices of many financial firms, and a growing unwillingness
to bid for risky assets.
As investors attempted to sell in a market with no buyers, prices fell further. Soon, most risky assets were
dropping rapidly in price and panic began to creep into the marketplace. The credit crisis had begun.
Following an extended period of relative calm, a housing market decline led to falling values for mortgage-
backed securities. Losses on these and other hard-to-value securities soon spread to encompass all risky assets,
prompting fear on the part of investors and an unwillingness to provide liquidity in the marketplace. As this
downward spiral accelerated, fear turned to panic and the financial markets descended into crisis.
Source: http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
List of task assigned and completed by team members
AMERICA’S BUSINESS & ECONOMY 1900-2000....................................................................................................................................
INTRODUCTION ..........................................................................................................................RAKESH CHOUDHARY (2014220)
1. BUSINESS PRACTICE INTRODUCED BY IBM ......................................................................RAKESH CHOUDHARY (2014220)
2. BUSINESS PRACTICE INTRODUCED BY AMAZON ...............................................................PRATEEK SHREEMAL (2014202)
3. BUSINESS PRACTICE INTRODUCED BY BANK OF AMERICA .....................................................NILESH THAKUR (2014180)
4. BUSINESS PRACTICE INTRODUCED BY BERKSHIRE HATHAWAY .............................................NILESH THAKUR (2014180)
5. BUSINESS PRACTICE INTRODUCED BY FORD ..............................................................................RASIKA DHULEY (2014223)
6. BUSINESS PRACTICE INTRODUCED BY CNN..............................................................................OINDRILA GHOSH (2014185)
7. BUSINESS PRACTICE INTRODUCED BY GENERAL ELECTRIC..............................................NISHANT AGRAWAL (2014181)
8. BUSINESS PRACTICE INTRODUCED BY FEDEX .............................................................................RASIKA DHULEY (2014223)
9. BUSINESS PRACTICE INTRODUCED BY WAL-MART ......................................................................NEHA VERMA (2014173)
10. BUSINESS PRACTICE INTRODUCED BY PROCTER & GAMBLE CO ....................................................NIDHI JHA (2014174)
11. BUSINESS PRACTICE INTRODUCED BY MICROSOFT .........................................................................NIDHI JHA (2014174)
AMERICA’S BUSINESS & ECONOMY POST 2000 ...................................................................................................................................
DOT-COM BUBBLE.........................................................................................................................PRATEEK SHREEMAL (2014202)
TERRORIST ATTACKS OF SEPTEMBER 11, 2001 ...................................................................RAKESH CHOUDHARY (2014220)
ECONOMIC CRISIS OF 2007 (SUBPRIME CRISIS) ................................................................................NEHA VERMA (2014173)