16 Mar Businesses Face Off with the Corona Virus (Covid-19)
The mighty virus Covid19 is affecting most businesses and slowing down the world economy.
It’s a solid fact today that the world is confronting one of the most impactful pandemics and we have to deal with the consequences in a smart way of learning from history.
What history taught us from the market crashes?
The first recorded stock market crash dates back to 1634 and it was the Tulip crisis where it peaked due to high demands by the Dutch elites and even middle-class population for 3 years in a row 1634-1637. As soon as the interest faded on buying Tulips the market crashed putting the Dutch economy into recession for years. (https://www.thestreet.com/markets/history-of-stock-market-crashes-14702941)
In recent history, the world witnessed a couple of crashes the great recession in 1929, Black Monday the 2nd 1987, the Dotcom burst 1999-2000 and the great recession 2008. Are we going to add up now the great Corona recession of all times 2020?
The good news we have recovered from all of these recessions and stocks grew again and businesses flourished.
Covid-19 impact on businesses:
The Corona Virus is affecting today several industries globally while on the other hand the self-hygiene, retail (supermarkets) and online business like Amazon are blooming.
The tourism industry has been hit hard due to all the travel bans, cities lockdown, and fear of socializing. Hotels, airlines, and rent-a-car companies are witnessing an unprecedented crisis. Another sector that is getting the pinch is the F&B industry across all its sectors restaurants, bars, night clubs, and all their sub-channels. The retail channel has been struggling for a while now since the On-line shopping boom but it was still surviving the wave with cost adjustments and store experiences. Now with the Covid 19 impact, more consumers will shift their habits to On-line buying and they will stay there which will put more pressure on traditional retail even post the Covid crisis. The Automobile industry has found some alternatives to sell and deliver cars to their customers without the need to leave the comfort of their homes. Electronics including mobiles, laptops, and TVs will witness a spike due to the high demand as schools shift to e-learning, offices shift to work from home environment and TVs to upgrade the current home entertainment during the quarantine periods. E-commerce will be at its peak this year and will continue to grow to gain more consumers to this new habit of convenience shopping. Coming to the latest self-Hygiene trend the world is turning into a group of OCD’s (obsessive compulsory behavior) of hygienic people. The crazy demand for hand sanitizers is the new global trend to fight the Covid 19 and to give some confidence that we are in control of our environment by obsessively cleaning our hands and entourage. Not forgetting logistic companies dealing with all e-commerce international shipments and local deliveries they are on a winning streak and will continue to do so expanding and disrupting the delivery and shipment business as we know it today.
What businesses should do in the Corona crisis?
In a crisis, some businesses shift into panic mode and start taking wrong decisions that will impact their performance post-crisis. The lessons learned from the past should be implemented and adapted to the new environment and crisis affecting the normal businesses.
Some key learning that I would like to share with you collected from several crisis best practices in history.
- Managing expectations and revising targets to more realistic planning in line with the impact.
- Preparing for 2 different scenarios to be in place in crisis mode: Scenario actual (A) and worst-case scenario (B). Businesses should be ready with such scenarios ready to act based on the crisis development.
- Invest in improving market positioning, image, advertising to gain share from the competition.
- Adapt marketing plans in-line with the crisis direction and tone of voice to touch the hearts of the consumers showing solidarity.
- Keep your people don’t layoff, save cost in other areas and keep your team as the last resort for cost-cutting. It will cost you more to get new hires post-crisis. Remember that the Corona crisis is a short term.
- Stay focused on your long term plans and keep your strategies in place don’t get derailed from the current crisis mode procedures.
- Innovate, innovate and innovate in product development, programs, offering, etc. Be open to the outside of the Box ideas from your teams.
- It’s time to acquire your competition or service providers to optimize and win market share at a good price.
- Move into a digitalizing approach in all areas that your business can allow especially with the Corona distancing strategies. This can save you money in the long run.
- Opportunity to hire great talents that have been laid off if you have the budget. Keep in mind this is a temporary state, things will get over and will be back to normal.
The survivor of the fittest:
Companies already started retrenching people or giving mandatory unpaid leaves to reduce costs during this crisis. We might witness a new wave of layoffs depending on the industry, mergers and acquisitions and unfortunately some bankruptcies. The ones that will survive the virus storm will recover fast and grow further.
The end of the Coronavirus:
The coronavirus is a temporary crisis, hundreds of companies around the globe are working day and night to get the coronavirus vaccine in place at the soonest. According to Fox News, the first human vaccine tests will be in April. The initial trials will be in Kaiser Permanente Washington Health Institute and will be tested on 45 young, healthy volunteers using the Modrna’s mRNA-1273 vaccine. According to WHO the World Health Organization estimated that the Coronavirus cure will be ready in 18 months for mass distribution. Even when testing is successful it will take additional studies on thousands of people to verify that the vaccine doesn’t have any harmful side effects. (https://www.foxnews.com/health/how-close-are-we-to-a-vaccine) In the meantime, the WHO directive on self-quarantine and limiting social gathering is reducing the impact and giving the advantage to health bodies to control the virus spread. As of date while writing this paper China’s new daily infection dropped to single digits and recoveries have exceeded the 80% rate. If all the government will swallow the frog now and implement the same measures we would be free of Corona before summer.
A new world:
The world is witnessing a new wave of change and the world post-Covid 19 will be a new world. Businesses will change the way they conduct business they will discover new streams of income and they will be shifting to more decentralized operation. Consumers’ will shift their buying habits towards a more digitalized world. It will take us some time to get over the obsessive hygienic habits and we would be changing the way we greet each other forever. The Covid 19 mark will stay with us for a couple of years for sure and will reside in our memories.
Businesses will win the war against the Coronavirus but at what price?
Are we going to witness a retrenchment of employees? A surge of startups and entrepreneurs? Or a monopole in industries streamlining demand and products in each industry?
Well, this will depend on how long the effect of the Corona pandemic will keep paralyzing the global economy. The longer the cure the harder the recovery will be.
But today we as world citizens collectively if we act responsibly in our buying behavior, in our self-quarantining, in our efforts to stop spreading the virus we will get out of it sooner and win back our lives!
In a great initiative, the Dubai government has issued ease of 100 billion Dirhams to support affected businesses. It’s a great example that we are all in it and we need to support each other’s in these exceptional times.
The UAE government as well have set up a fund to reduce taxes and fees on import and export to facilitate business mechanism & cost on all company owners as follows:
- Cancellation of the bank guarantee for customer clearance activity
- Suspension of 2.5% market fees
- Recovery of 20% of custom fees on all imported products sold locally.
Having the flexibility to set up a business remotely in UAE is a great response to the uncertainties that surround us.
The businesses that could be set up remotely consist of the following activities:
- Import/export trading
- Project management consultancy
- Fitness and lifestyle coaching
- Information technology consultancy
Business Setup Consultants DMCC can help you incorporate your company in UAE without the hassle of moving from your home in 3 easy steps:
- Reach out to us with the desired activity. (firstname.lastname@example.org)
- One of our consultants will attend your query and instruct you on all the steps.
- Send us the soft copies of all the documentation required.
Our experts will handle all the rest from here. In those 3 steps, you can have your company set up remotely within 5-7 working days.
Other initiatives could be implemented to keep the business going with the least disruption:
- Flexibility for employees to work remotely.
- Cancel all business travel
- Providing basic protective tools like free sanitizers, face masks and gloves.
- Providing food delivery or food preparation options.
- Measuring the temperature of the employees.
- Effective information on the symptoms and prevention measures.
- Provide transport options to limit public transport usage.
Some basics preventive measures that we can individually implement during this period consciously:
- Hand wash with soap and water.
- Avoid touching your face when in public places.
- Staying away from sick people
- Staying home if feeling sick
- Cleaning surfaces with disinfectant
- Sneezing or coughing using a tissue.
- Avoid crowds and crowded places.
For any queries, you can reach out to email@example.com