It has been 3 months since the Coronavirus first broke out in Wuhan and mainland China. With the lightning contagion, WHO has announced the virus as a global pandemic, which pushes many governments to take serious actions to constrain the situation. The world is in chaos, and if countries fail to ostracise the virus, the global economy will be stung for quite more time. Businesses would suffer hard, lots of them may be unable to recover and have to announce their bankruptcy.
This article, based on our collective resources and intelligence, will deconstruct the current state of the Corona pandemic as well as some forecasts till the end of this year; therefore, guide you to effective business continuity with the helping hands of technology.
What is going on?
More than 162,000 results on Google for the Coronavirus. 386,332 reported cases. Over 177 countries and territories are infected. More than 16,747 deaths and 102,333 recoveries. That’s the state, counted to March 24.
In China, the once-hotspot of the virus, the situation seems to be cooling down. Meanwhile, with the recovery of China and East Asian countries comes the uprising of the West as the epicenter. People are required to stay at home, many public events, social gatherings, education and business activities are postponed indefinitely. Border shutdown, large-scale quarantines, travel restrictions, and social distancing have been put into effect to stop the transmission of the virus.
Also, as Corona is a newly found virus, the information around it remains partial and inconsistent. This has put the whole society in a VUCA stage.
Volatility – information overwhelmed
Uncertainty – what we should do, when will the vaccine be available, how long this is going to last
Complexity – of transmission, of solutions on how to protect yourself, of continuity management
Ambiguity – haziness of information
Not only the society in general, but also the business owners have been dragged into the stage of uncertainty as a result. Some of the variables epidemiologists are still discovering, listed in COVID-19 briefing note of McKinsey, are:
The extent of undetected milder cases: We know that those infected often display only mild symptoms, or no symptoms at all. Therefore, there is a high possibility for public-health systems to miss such cases. For example, 55 percent of the cases on board the Diamond Princess cruise ship did not exhibit significant symptoms (even though many passengers were middle-aged or older). But we don’t know for sure whether official statistics are capturing 80%, 50%, or 20% of cases.
Seasonality: There is no evidence so far about the virus’s seasonality. Coronaviruses in animals are not always seasonal but have historically been so in humans for reasons that are not fully understood. In the current outbreak, regions with higher temperatures (such as Singapore, India, and Africa) have not yet seen a broad, rapid propagation of the disease.
Asymptomatic transmission: The evidence is mixed about whether asymptomatic people can transmit the virus, and about the length of the incubation period. If asymptomatic transfer is a major driver of the epidemic, then different public-health measures will be needed.
However, against all those uncertainties, there is one thing we know for sure: The virus is highly transmissible. Both observed experiences and emerging scientific evidence show that the Coronavirus is easily transmitted from person to person. The US Centers for Disease Control and Prevention estimates that the virus’s reproduction number (the number of additional cases that likely result from an initial case) is between 1.6 and 2.4, making the virus significantly more transmissible than seasonal flu, whose reproduction number is estimated at 1.2 – 1.4.
What does it mean to the economy and your business?
The range of potential outcomes is large and depends on the spread of the virus and resulting economic fall-out. As the growth in the number of infectious cases is unstable and inconsistent, the future is uncertain. Therefore, McKinsey divides the situation into 3 major scenarios that cover all possible outcomes.
Quick Recovery: In this scenario, although the case count continues to grow, countries are able to achieve rapid control as China, so that the peak in public concern comes relatively soon. Plus, given the low fatality rates in children and working-age adults, we might also see levels of concern start to ebb even as the disease continues to spread.
The scenario assumes that younger people are affected enough to change some daily habits (for example, they wash hands more frequently) but not so much that they shift to survival mode and take steps that come at a higher cost, such as staying home from work and keeping children home from school.
As a result, GDP growth for 2020 falls from previous consensus estimates of about 2.5% to about 2.0%. The biggest factors are a fall in China’s GDP from nearly 6% growth to about 4.7%; a one-percentage-point drop in GDP growth for East Asia; and drops of up to 0.5% points for other large economies around the world.
Global slowdown: This scenario assumes that most countries are not able to achieve the same rapid control that China managed. It assumes one major epicenter with 40-50% of all cases, two or three smaller centers with 10-15% of all cases, and a several number of towns with a handful or a few dozen cases.
This scenario sees much greater shifts in people’s daily behaviors. This reaction lasts for six to eight weeks in towns and cities with active transmission, and three to four weeks in neighboring towns. The resulting demand shock cuts global GDP growth for 2020 in half, to between 1 and 1.5%, and pulls the global economy into a slowdown, though not recession.
In this scenario, a global slowdown would affect small and mid-size companies more acutely. Less developed economies would suffer more than advanced economies. And not all sectors are equally affected in this scenario. Service sectors, including aviation, travel, and tourism, are likely to be hardest hit. Airlines would continue experiencing a steep fall in traffic on their highest-profit international routes (especially in Asia–Pacific).
In consumer goods, the steep drop in consumer demand will likely mean delayed demand. This has implications for the many consumer companies (and their suppliers) that operate on thin working-capital margins. For most other sectors, the impact is a function primarily of the drop in national and global GDP, rather than a direct impact of changed behaviors. Oil and gas, for instance, will be adversely affected as oil prices stay lower than expected.
Recession: This scenario is similar to the global slowdown, except it assumes that the virus is not seasonal. Case growth continues, potentially overwhelming healthcare systems around the world and pushing out a recovery in consumer confidence. This scenario results in a recession, with global growth in 2020 falling to between 0.5% and 1%.
In any of those scenarios, the economy is sure to suffer a hit – the question is to which degree, and when will the situation witness a shift – and your businesses too. Of course, the future remains unknown, still, businesses must plan ahead in preparation for the worst scenario.
How can you survive?
As Dwight D.Eisenhower once told, regardless of how the events track off the plan, a mature planning process will always give you the tools and agility to quickly adapt and respond. You either pray for the best to come, or take the lead and prepare for the worst. Here I assume you are sane enough to go down for the latter.
Before any further deep-diving, it is important to note that you cannot confront a pandemic the way you do with other types of crises, such as natural disasters or political events. Because the media often talks about these events, we fracture it as part of our normal life and consider them as known and probable events. We know that these events are potentially going to disrupt or destroy our infrastructure, therefore, we devise plans on how to relocate infrastructure and rebuild it to the way it initially was.
However, it’s not the same as that of a pandemic. In such events, it is not the infrastructure nor equipment that is going to be unavailable, but the people, the community, the personnel that are supposed to run those infrastructure and equipment. These obstacles create 3 major problems for every company, naming:
- Downsizing your customer base.
- Absence of employees at the office.
- Stagnant supply chain.
Hence, the challenge is that although the facility and the products themselves are still there, the stakeholders you need aren’t going to be able to get there. Therefore, your job is to connect the facility and the products to the people that are relevant. You need to scale the environment in order to support more remote users that are going to connect to the resources you have.
Distending the downsizing customer base
The thesis of this is that social distancing has changed purchasing behaviors, putting limits on outdoor entertainment and social interaction. It results in businesses’ downsizing customer base throughout the pandemic.
This leaves a huge pressure on on-premises activities since one cannot sell if there isn’t any visitor. Therefore, an apparent solution is migrating your offline infrastructure to a virtual platform, or leverage it as your business’ strategic channel to win back the customers. From here, the work to be done is boiled down to 2 aspects: technology and online marketing.
The technology aspect we are referring to is based on the scenario that you sell your products or services on your own E-commerce platform. Building an E-commerce website/application is strategic, because it gives you the edge in customer experience – and in times of a pandemic, what is more satisfying than having an excellent experience? Even after the pandemic passes away, it would still be advantageous to your business due to the soaring development rate of digitalization.
Still, in order to really deliver the finest experiences to your audience, the platform should not only be well-functional, but also excellent in design to propel customers into scanning the products and services, paving the wave for any activation marketing following up. Hence, we suggest some criteria for a pandemic-shielding platform:
- Provide all key eCommerce components, such as product catalogs, shopping cart management, and settlement processes required for B2C and/or B2B eCommerce.
- Provide a rich and interactive customer experience, with shopping tools (e.g. single-page checkout) and the ability to leverage user-generated content (such as product reviews and ratings).
- Support multiple payment methods.
- Allow different types of online marketing capabilities in your webshop such as promotions, up-sell, cross-sell, etc.
- Enable great on-site search and external search engine optimization capabilities.
- Provide real-time product/service recommendations, guided selling and other capabilities to help customers find products and services.
- Provide appropriate ownership models, such as licensed software, transaction based models and SaaS.
- Leverage external web services (e.g. Google Maps, Google Analytics, product reviews,) and internal web interfaces (such as fulfillment systems and ERP) to complete the customer experience.
- Integrate with other points of customer interaction, such as stores, mobile devices and social networks.
- Enable personalization of the overall online experience.
Read more: 3 Common Mistakes In E-commerce Web Design
Apart from those basic criteria, it is important to role-play your customers and think of the “X factor” – your unfair advantage or unique selling point you want to integrate into your platform in order to compete better in the market – especially when many businesses are also relocating to E-commerce. You should as well think of a potential vendor to actualize your ideas and leverage your platform’s user experience.
However, in the face of the pandemic, it would be hard and definitely expensive to recruit a team of talent engineers and get them to collaborate efficiently to deliver the product in a short amount of time. Therefore, outsourcing a remote team, who have already had the competency and experiences of building such platforms would be a more ideal option to fuel your online selling. The steps you are going to make after that are:
- Defining your outsourcing goals and objectives
- Choosing a suitable outsourcing model
- Collecting a vendor list
- Choosing outsourcing destination
- Evaluating each vendor
- Deciding on the most potential vendor and start working on the project
Read more: The Ultimate Outsourcing Guide
In terms of Marketing strategy – a strategy that is effective enough to retain the maximum number of customers within your funnel, you have to think about a major question: How do you innovate to find a new way to deliver solutions and services in line with the new situations and new behaviors?
The key for the question is understanding the stage of the market. You have to grasp the latest information about the development of the Coronavirus, by which degree it is spreading and how people are reacting to the pandemic in order to analyze into the situation, to forecast where it is going and how you are going to react accordingly. It is the combination of news, articles, reports and social listening to derive customer insights and their changing behaviours. Some helpful and reliable sources for latest information and ideas we recommend are:
- Your country’s official information channels
- World of meters
- Johns Hopkins Center for Systems Science and Engineering
- Kantar World Panel
- Boston Consulting Group
- Harvard Business Review
From there, you start connecting the dots – in alignment with your business competency and future prospect – for innovative marketing ideas. Ogilvy divides the essential steps into 4 major phases:
- Sustain long-term sales, where you reallocate spend behind most topically relevant segments and SKUs.
- Engage all audiences and stakeholders where you carry out stakeholders mapping and recreate “shared values” programs.
- Activate your purpose where you generate a meaningful message, action and support for public health and safety.
- Spend smarter where you optimize drive-to-web, drive-to-commerce with smart digital platforms.
Also, it is important for you to look at what the customers are doing during the pandemic. If they don’t go out, then “where” could they be? Find the answer for that, and be available where they are – in the right place, at the right time. Put it another way, you should adjust the channel mix, content and potential partnership to secure the efficient reach and keep your online selling relevant.
Managing the “work-from-home” culture
Work from home is probably one of the hottest searches on the Internet these days. The governments are taking further steps in controlling the pandemic, so do the companies. Besides the inevitable situations, such as quarantines or transportation shutdowns, business owners are also allowing their employees to work remotely to protect their health – and it is definitely necessary, given the transmission of the virus.
However, it poses a problem as to how to scale the working environment to more remote users. It is about the paradigm shift from local network access to remote network access, followed by the increase in bandwidth, along with the traffic and architecture.
But why is moving to remote working a problem to consider? It is because of 2 reasons: the unstable Internet routing and the efficiency of employees without physical supervision.
Business activities, if not dependent on physical meetings and conferences, are mostly reliant on the Internet. However, as most people stay at home during the pandemic, there are a lot more users trying to use the Internet – not only those who work, but also those who want to entertain. This puts pressure on the Internet, hence reducing the efficiency and service quality. Therefore, you need to plan ahead on your Internet routing quality, on how to improve its capacity and efficiency. The solutions might be lying in:
Relying on a colocation data center allows better connectivity as it has fully redundant network connections to ensure that customers’ business-critical applications always run uninterrupted and complete control of your physical servers. It also provides you with the flexibility to burst to higher bandwidth levels to accommodate your traffic demand without having to make repeat capital investments.
Hereof, you can increase or decrease bandwidth as you wish so when shifting from working in the office to working from home you will be able to guarantee the bandwidth and the internet connectivity of your company network. In addition, if you have the time and ability, you should centralize your data source that gives you access to redundant high-speed networks.
However, if you’re not currently on a colocation or don’t have the resources to do it, you can contact your telco and not only increase the bandwidth that you have between your on-premises environment and the public cloud, but also between sight-to-sight depending on how you’re going to architect your work-from-home strategy.
- On-demand virtual workplace
Working from home means your employees will need access to your network remotely. Therefore, you need to plan for how employees will access the workplace from a hardware perspective, from a software perspective, from a licensing perspective and from a network perspective.
A suggestion is that you consider users’ work shifts for remote access. You can’t have all of your users connecting at the same time because it will overwhelm your system, making your system harder to scale and pressure the Internet. The solution is that you still let everyone involved, but at an appropriate time to adapt to this paradigm shift.
In case of remote supervision, apart from calling your employees’ autonomy, integrity and responsibility, you could leverage your existing business management software to a more convenient one, or customize it to your needs. It could be a software allowing companies to push all the processes and documents on the public cloud – but with superior user experience, or a Feedly-like software which integrates multiple types of business management software such as invoicing, asset management, CRM, database,.. into one place. Therefore, it would be easier for the CEO to keep track of the process of every function in real-time with less time.
Upgrading the supply chain
Just as the first 2 segments, there are currently 2 problems with the supply chain: stagnancy of export/import, and the uncertainty of where to push stocks to. Trucking capacity to ship goods from factories to ports is at about 60 to 80% normal capacity, while goods are facing delays of between eight and ten days on their journey to ports due to border shutdowns. Customers that have pre-booked logistics capacity may not use it; customers may compete for prioritization in receiving a factory’s output; and the unpredictability of the timing and extent of demand rebound will mean confusing signals for several weeks or even months.
A must then is to stabilize the supply chain. You need to define the extent and duration of your supply-chain exposure to areas that are experiencing community transmission and inventory levels. You also need to consider rationing critical parts, pre-booking rail/air-freight capacity, using after-sales stock as a bridge until production restarts, gaining higher priority from their suppliers, and, of course, supporting supplier restarts.
Companies should start planning on how to manage supply for products that may, as supply comes back on line, see unusual spikes in demand due to hoarding. In some cases, medium or longer-term stabilization may be warranted, which calls for updates to demand planning, further network optimization, and searching for and accelerating qualification of new suppliers. You need to digitize your processes and tools to integrate demand, supply and capacity planning, in which leveraging your supply chain management system shall be recommended for better and smarter application.
That being said, there is a sharp need for a more distributed, coordinated and trackable supply of components across multiple geographies and vendors while maintaining economies of scale, which could be actualized through integrations of sophisticated technologies such as 5G, robotics, IoT and blockchain to help link multiple buyers with multiple vendors reliably across the of supply chains.
The Corona pandemic is a shock to thousands of individuals and families it has affected, as well as to the global economy. Large-scale quarantines, transportation shutdowns and travel restrictions have put many pressures on the customer base, the paradigm shift and the supply chain, which requires businesses to react fast and plan for all possibilities. Firms that choose to capitalize on changes will survive and ones that don’t will get disrupted.
We hope that our articles have given you valuable insights as for how to overcome the pandemic. In case you need further consultation on how to apply technology to your businesses to optimize cost and boost efficiency in this time of the pandemic, feel via to contact us via:
- Phone: +84 24 3202 9222
- Hotline: +84 32 675 2886
- Email: email@example.com
Source: How to save your business from Coronavirus? (Savvycom)