Covid 19 and Business World

COVID-19 AND OUR BUSINESS WORLD
Department of Management Sciences

COMSATS University Islamabad
Abbottabad Campus
May 2020
COVID-19 AND OUR BUSINESS WORLD
It is only about three and half months into 2020, but businesses across different sectors in the
world have been hit hard as the COVID-19 pandemic causes destruction on economic activities
worldwide.
The highly infectious pneumonia-like disease has spared only a few businesses, mostly offering
healthcare products and services, while many others, from airlines and hotels to retail and food
and beverage industries, have taken a hard hit. Several sectors felt the blow in the form of major
disruptions in cash flow and business operations as the outbreak spread like wildfire, forcing
some employees to work from home, while others became victims of unemployment.
Business sectors desperately affected by Covid-19:
Travel and Tourism industry:

Travel industry suffered a lot due to Covid-19 because a lot off countries are facing lockdown. Popular
holiday destinations in Indonesia have grappled with cancellations from hundreds of thousands of
tourists, incurring losses worth trillions of rupiah. Due to the coronavirus pandemic, few industries have
fallen as far and as fast as tourism.
Taking a snapshot of tourism losses is difficult, as the data changes as quickly as the virus spreads. If
the pandemic continues for several more months, the World Travel and Tourism Council, the trade
group representing major global travel companies, projects a global loss of 75 million jobs and $2.1
trillion in revenue. Losses come daily; as of April 2, British Airways is reportedly poised to suspend
36,000 staffers.
Retail industry
The retail industry in the world and municipalities have been affected by the pandemic. The
biggest retail stores like Walmart decline in daily earnings.
The number of visitors to shopping malls has also decreased, prompting several malls to
temporarily close their doors but still opening access to tenants serving basic needs, such as
supermarkets and drug stores.
Food and beverages industry

As a result of lockdown, major restaurant chains that employ thousands of workers in total have
chosen to temporarily shut down operations. Biggest food brands of the world like McDonald's
KFC, Pizza Hut, Hardee's, Domino's, Burger King etc. are facing losses in their daily earnings.
Fashion and apparel:

People are understandably not interested in shopping for clothes in person. Department stores
like Macy’s and JCPenney, large chains like Abercrombie & Fitch and Nike, and DTC
brands with some storefronts like Roth’s and Ever lane are all closing their physical stores and
experiencing losses. Some stores like Patagonia are halting even their online stores to protect all
workers in their supply chain. Even online apparel sales are down as people are putting more of
their budgets into daily essentials.
Aviation industry
World airlines have seen a drastic decline in passenger numbers since early March, prompting
many to take efficiency measures and laying off their employees.
Indonesia National Air Carrier Association (INACA) chairman Denon Prawiratmadja said on
Thursday that all airlines had cut their flights and routes by 50 percent or more because of a drop
in passengers.
Hotel/Hospitality industry
Hotel occupancy rates have plunged well below the seasonal average across the world. It’s no
secret the hospitality industry is among those who have been hit the hardest with a real economic
impact. Hotels employ approximately 4% of the total U.S. workforce, nearly 8.3 million people,
according to AHLA. And with so many of these employees currently being out of work or losing
hours due to limited travel as a result of Covid-19, the economic impact is just as huge and
people are really feeling the effects quickly.
Other industries facing loss

Many other industries like automobiles, electronic, Consumer Durables, sports, engineering
and capital goods, education and training, real estate, stock market and textiles industry are facing losses
and down fall due to Covid-19.
Businesses that are getting both short & long-term benefits:
For millions of individuals and businesses, the threat of COVID-19 is financial ruin, but there are
parts of the technology industry that are benefiting from the considerable changes forced on
society. Once people become habitual to use the following products and services it is expected
that after this epidemic situation, they will continue to use this.
Hospitals and Pharmaceutical Industry:
Due to the prevailing situation of the world now people have become conscious about there
health and they go for proper checkup in hospitals and use medicines even if they face any minor
health issue other than this The impact Covid-19 has created in China and the lockdown in India,
United States, and other countries, further increases the chances of shoot up in the cost of raw
materials and drugs. Once the vaccine would be prepared that formula will also fulfil the future
needs for this disease.
Digital Health
Digital health might be the next big thing as telemedicine / video consultations, health-related
videos and apps are gaining popularity. Most probably people will continue to use this service
even after this epidemic.
Investment in online portals that help doctor-patient interaction will increase.
Example of gaining digital popularity
 Wellmind health (provides online courses for mindfulness-based cognitive therapy) has
seen a recent uptrend in the purchase and enquires
 Due to the current pandemic situation, hospitals in the UK have been instructed by NHS
England to increase telemedicine/video consultations
 Meditation apps Calm and Headspace have released free digital offerings to help people
cope up with panic and anxiety
Online grocery delivery
With the rush on supermarkets persisting as the days turn into weeks, online grocery delivery
companies are seeing a surge in popularity. Online shopping delivery service Ocado suspended
its website last week, telling customers demand exceeded its capacity to deliver. The firm has
said it would fulfil its orders and will soon reopen, with rations placed on certain food items.
Share price for Ocado has surged this month, though it did decline once it announced it would
temporarily stop taking orders. In this busy world once, people would become aware about
online grocery delivery service most probably they would continue to avail this service.
Electronic payments
The likes of Visa, Mastercard and AMEX are already benefitting from long-standing trends
where physical cash is quickly becoming a thing of the past, though the COVID-19 outbreak
could accelerate this. In the short-term, some shops are now only accepting digital payments,
though as the total number of transactions are decreasing, so will revenues. That said, in the
long-term it could force customers into adopting digital payments.
Businesses that are getting short-term benefits:

Video conferencing and collaboration
Many businesses are encouraging more meetings to be conducted via video links rather than
email to not only ensure effective communication but ensure well-being of employees.
Microsoft is an obvious beneficiary here, it announced last week the number of daily active
users for its Teams collaboration suite increased by 12 million, though there are many others
who are financially better off also.
Cloud Computing
The cloud computing segment has been on the rise for years, though as more employees find
themselves restricted to their homes more workloads will have to be migrated to the cloud to
ensure the business can function as usual. For the cloud companies, the coronavirus outbreak is
effectively forcing some organizations through a very rapid digital transformation project, to
embrace the cloud and mobility trends.
Streaming, gaming and video content platforms
This is perhaps the most obvious example of a beneficial segment. In terms of video streaming,
Netflix is already immensely popular, but with more people stuck at home in the evenings, it
may well become more so, but this benefit is not limited to the content king. All streaming
platforms could benefit, while Disney+ is launching at a good time to capture the attention of
European consumers. In terms of video platforms outside of streaming, YouTube is enjoying
particular success. Not only are there those who are trying to entertain themselves, but there is
also millions of hours of information (some much more accurate than others) on the pandemic
itself.
The telecommunications industry
The telecommunications industry is critical to today’s society functioning seamlessly, though it

has traditionally been ignored. Consumers have simply expected the internet to work without
appreciating the importance of the telecommunications industry. Telcos are viewed as boring
companies, paid little attention in everyday life.
Personal Protective Equipment (PPE):

There are several business-owners around the country who pivoted to either producing or
sourcing personal protective equipment (PPE) in response to the COVID-19 pandemic. These are
the companies that sells branded scrubs and hand sanitizer to health offices and hospitals. These
companies are 3M and Owens & Minor, these are benefited at first but now these products are
getting scarce because of the mad rush around the world to secure enough masks, gowns, gloves,
hand sanitizer and they are also facing delays due to flight operations.

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COVID-19 AND OUR BUSINESS WORLD

Department of Management Sciences

Business sectors desperately affected by Covid-19:

Travel and Tourism industry:

Food and beverages industry

Fashion and apparel:

Other industries facing loss

Businesses that are getting both short & long-term benefits:

Hospitals and Pharmaceutical Industry:

Investment in online portals that help doctor-patient interaction will increase.

Example of gaining digital popularity

Online grocery delivery

Businesses that are getting short-term benefits:

Streaming, gaming and video content platforms

The telecommunications industry

The telecommunications industry is critical to today’s society functioning seamlessly, though it

Personal Protective Equipment (PPE):

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