Covid-19 crisis has affected all types of industries at varying levels. While some have been able to defend themselves vigorously, others will likely struggle to adjust to the continually changing new normal. The consumer behavior is evolving; there is a disruption in the supply chain across the world and is facing continuous pressure; every government, region, and the market has a different response to this pandemic. In terms of turnover and profits, the impact of the epidemic is substantial, as nearly 50% of the businesses are expecting cash crunch in the coming six months. However, this might also differ from industry to industry.
Tourism, automobile, hospitality, and many non-food retail sectors and suppliers are among the worst hit. Those who are doing relatively better include online retail, pharmacies, and supermarkets. Manufacturing companies involved in home office supplies, fitness machines, bread machines, and home entertainment are also rising. If you didn't know this, even staple consumer goods (pasta, yarn, toilet paper) manufacturing companies also saw a peak in the initial period of the lockdown. But that was temporary.
The different perspectives on businesses in the time of Coronavirus by Robert Trosten
Showing resilienceOne of the Kearney surveys suggests that 76% of the organizations with an emergency plan in place had an edge. From the inception of the crisis, nearly 80% of the people across 73% of the firms started working from home. As much as 86% of the working from home decisions showed positive results. Many businesses worked the way they were doing, although some delays happened here and there. The top honchos of the companies with little knowledge of the digital working model had to go through a massive learning curve. Their decisiveness helped them to be resilient as they went on to solve problems one after the other. They worked with the employees to ensure their safety, serve customers, and take care of the financing.
These well-defended companies, with their collective and collaborative efforts, provided solidarity to their businesses and the partners.
Chasing opportunities and changingIn this particular time, some businesses went out of their way for their customers and showed an inclination for the social commitment by making hand sanitizers, face masks, and arrangements for test labs. These acts, in turn, created a sense of pride and motivation in the employees. As per some studies, the proactive top executives are making the most of the opportunities already and witnessing massive developments. Several of them are moving with a long-term view by modifying the core business or adopting digital avenues.
However, others faced huge setbacks for early transformation when the pandemic had just occurred. Then, some simplified and automated their business processes or enhanced their risk handling procedures to be better positioned. Along with these, many companies are also eyeing acquisitions and consolidation options, as Robert Trosten points out.
Working under restrictions posed by COVID-19
The uncertain times have compelled companies to search for creative ways to function and operate at their best capacity. Companies are turning agile and flexible to accommodate to this new situation. An example of this is the widespread use of video conferencing. Organizations are training their people to become comfortable with this. Similarly, courier services have done away with the signature system for delivery. Doctors are also using the phone to help patients.While agility can be admirable, some emerging trends look disturbing. The current style of working may not be sustainable over the long run. Also, work from home can demoralize employees and distance them from each other. Due to social distancing, business processes can become complicated and experience a drop in productivity. Places with the prevalence of the culture of involvement and social dialogue can, however, have a moment.
There is a common understanding between leaders that crisis can take a long time to disappear. Some are hoping for a speedy recovery, while some believe that restrictions can pinch them until 2021. No matter what it is, the gradual move towards normalcy appears to be more complicated than the initial lockdown period.
Changing consumer behavior
As per some views, when all the restrictions go away, and normal operations resume, companies can face a steep decline in demand from customers, businesses, and government. It can lead to a macroeconomic impact of the Coronavirus on the companies. The estimates reflect that countries can experience a double-digit drop in GDP, and unemployment rates can be extremely high. Many companies will stay away from investments to focus on survival more. Credit risks and bankruptcies are the other looming dangers.A lot of people feel many things will see a fundamental shift, such as reinforcement of digital strategy. Some trends can change or become weaker. You can imagine a shift from globalization to deglobalization. There can be a greater sense of safety with regional or local supply chains over the growing import practices that gathered pace in the last few years. Besides, the government can have a larger say in every aspect of the economy, due to which companies will have to resort to lobbying and PR initiatives.
Some areas are still not clear about how they will behave. To be precise, there is no clarity on whether companies and countries will commit themselves to ecological targets even now. The slowing or declining economy will also influence spending habits with a remarkable evolution in consumer patterns. For example, customers will prefer a cost-effective and risk-free means. Their priority will be savings. Also, the new habits can continue even when the pandemic is gone. Virtual interactions and reduced traffic on the roads are some of the best examples of them. Already customers chose packed vegetables, fruits, pastries, and bread over anything that came without packaging. However, there is no guarantee if the same behavior will continue.
From whatever is happening, one thing is clear that business leaders need to play an active role. They have to respond to the present needs for sure. But it should not prevent them from planning for a healthy tomorrow for their people and business. It is perhaps going to be the toughest job for the leaders to make their companies fit for the new normal.
