Pandemic has disrupted people’s lives as well as businesses and the unprecedented consequences are felt all around the world. Pandemic has affected not only the global economy but also the day-to-day cash flow in the business and every company need to relook how to operate and manage their business taking responsive steps to setoff major losses, securing supply chains, establishing remote work arrangements, reducing employee workload and cutting costs.
Businesses need to think about their financial condition during the lockdown period due to less income generation and the general uncertainty prevailing in the global financial environment. A shift in strategy will help enhance the company’s financial health and satisfy customer needs.
The impact of pandemic can be way more brutal on startups or small businesses as they have less cash reserves and a smaller margin for managing sudden slumps in business. The ripple effect of this lockdown during a pandemic has impacted India’s economy and as all business sectors get affected resulting in low revenue generation due to an eventual halt/slump on the sale of products and/or services. The expected growth rate of Indian economy for FY20-21 will slow down by 2% from a range of 4.7%-5.2% as was predicted earlier by the rating agency ICRA.
Impact of Pandemic on Business
The impact of the pandemic on the economy is very disturbing. Slow growth in the market has due to pandemic and impacted every individual from all of its ill effects. There was a larger impact on hospitality, entertainment and aviation businesses. Majority of companies are still in the crisis management phase, whereas few companies have started already exploring how they can set themselves up on the right trajectory for growth as they come out the other side. Companies need to prioritize the wellbeing of staff and business continuity, they have to review whether their strategies remain intact for purpose. Companies need to consider course correction plans in view of technological advances, study of evolving customer and employee behavior, the need for organizational and supply chain restructuring.
We have witnessed a major big shift in the world economic market where the share market crashes day by day. Factories, Restaurants, Pubs, Markets, Flights, Super Markets, Malls, Universities and Colleges etc. were shut down. Individuals limited their movement due to lockdown restriction and fear of coronavirus, this impacted the economy of the world as a whole. The global growth has been reduced from 2.9% to 2.4% and this could fall as low as 1.5%.
Framing Business Strategies
Business is facing a lot of issues during this unprecedented time and they need to plan a Strategic Crisis Action Plan to face the issues created by pandemic. Usually when business frames a strategy it is mostly depended on the market assumptions and study and this keep them sustaining.
Many factors need to be considered for strategic planning such as economic predictions, technological advances, financial projections, the future trading environment, competitor activity, and changing customer needs. These insights then feed into a creative and clear strategic plan that a company can use to move forward confidently.
As the pandemic-imposed lock down restrictions started slowly lifting, companies watched for signs of recovery and signs of opportunity, to get back to business and grow. Companies should frame contingency plans considering the lock down restrictions and understanding the gravity of the situation which brings growth in the new world of business by turning such situations into favorable for the business, so companies should implement strategies to remain flexible and compliant.
Moving from Reactive to Proactive
In dealing with pandemic companies needs to move from reactive to proactive approach and had to ask themselves the following questions:
- First, evaluating whether their products/ services can be sold through online channels?
- Secondly, using existing infrastructure can we produce products or offer services which are in demand?
- Thirdly, can we increase our capacity to produce and distribute products and/or services rapidly?
Business Strategies during pandemic
Strategies to be adopted for business growth that can help you keep your business not only afloat, but moving forward:
- Know your customers
Evolving customer behavior due to pandemic has slowed down the business growth. A clear understanding of what type of customers dealing with will help you to boost your sales performance and which brings you the most revenue. Focusing on such types of customer and demographic will grow the business. Identifying such information will put business in a great position to identify different ways of delivering value to specific clients.
- Financial Management
During a pandemic, a proper assessment of fixed and variable expenses of the business as well as the actual revenues and cutting down certain expenditure is of utmost importance to realize business growth. This assessment will provide a clear understanding of where a company stands financially and help the business in planning ahead in the current unsettled market.
- Maintain healthy relationship with contracted parties
Slowing business during lockdown created difficulties for business in arranging payouts to vendors/suppliers as a result of lack of business. Providing necessary notice well in advance to vendors, suppliers, landlord’s etc. that there will be delay in making payments to them, will help them to plan their business in these difficult times.
- Develop Your Team
During these uncertain times a business requires qualified and dedicated employees to lead your business and overcome the associated challenges. Stay connected with your employees and keep updated about every development in the business as employees rely on it. Keep hiring experienced professionals as more people continue to work remotely as they bring an expert’s insight on the business.
- Evaluate Marketing/ Supply chain
During pandemic business needs to place a solid marketing plan and keep reviewing marketing strategies periodically. Taking advantage of social networking sites market products / services, drive customer engagement and build brand awareness. Offer greater convenience based on the nature of your business and deliver the products to customer door steps. Evaluate supply chain to understand the potential vulnerabilities that may affect the business. Create a list of raw material suppliers beyond first- and second-tier suppliers.
- Digital Transformation of Business
In the Era of digitalization even small businesses can compete with more established brands and can grow their business during periods of slow growth. Business needs to understand the importance of digital transformation for growing business and move towards automation to create better results. Technology will contribute increased business efficiency and will save time and money.
- Evaluate Your Competitors
During and immediately after the pandemic businesses will experience slow growth. Identifying standards against which a business can be compared and measuring the progress will help the business to be more prospective. Evaluating the competitors will give business growth data, which can be used to evaluate the business performance based on the business growth rate. The preliminary research will help us to learn the strategies other businesses in your industry are using to achieve revenue and growth.
- Prepare for the Recovery Strategy
Companies have to focus on the future and devise a recovery strategy once the pandemic is put under control. Staying ahead of the game in business will involve purchasing materials, improving the work environment for your staff, receiving new shipments and building a strong business culture. Since the same old working and customer service practices can be followed companies need to introduce greater agility and flexibility in their supply chain.
- Ascertain potential points of failure.
Identify the critical processes or services that depend on the teams or individuals. Indemnify individuals for the critical roles that need expertise skills. Ascertaining the possibility of providing remote working conditions to the employees to reduce the level of human interaction.
- Think of other risks
Many other risks that are associated with the business faces aren’t diminished by the end of the pandemic but have a longer influence on the business. Keep an eye on such risk and make all the possible analysis and being ready to face such risk should be on top of mind to the companies.
Pandemic has sent businesses spinning, with many struggling for survival. Luckily, nothing is completely lost when a crisis is over rather than taking a sigh of relief and returning to normal routines, it’s ideal to put-in efforts to improve the businesses for the future and mould the business with the current customer needs and demand.
Even during the normal time nothing will make businesses 100% recession-proof, but implementing some preventive measures and analyzing ways to improve can surely ensure that businesses survive tough times. It’s important to remember that setbacks, failures, and crises are a part of business. It all comes down to companies’ ability to persevere through even the toughest adversity without ever giving up. Companies have to think every possible way, analyze your customer needs, keep updated with the current market trends & competitive scores, and shifting towards digitalization.
The current pandemic situation is not going to stay for long and once the situation is halted, there would be a long race in the business. Keeping an eye on the changes in the market and using this time to rebuild the business will bring opportunities of expansion to the companies.
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