One could hardly imagine how COVID-19 would turn into a global crisis of this magnitude, consequently changing the way people live and generating massive impact in both social and economic aspects.  This unprecedented disaster seemed to have suddenly disrupted all economic activities.  Most governments responded by imposing various levels of restrictions to contain the outbreak i.e. country and city lockdowns, state of emergency announcement, curfew, and all kind of measures to urge citizens to “stay at home” as much as they possibly can.

In recent months, we have seen businesses of all sizes struggling to proactively adjust their directions to minimize loss and turn crisis into opportunity.  The key questions are how should corporate leader make the adjustment plan or what “strategy” to use in order to enable competitiveness in such fluid environment where the outbreak has established the New Normal in the society.

Same Products, Different Channel

Restaurant business was hit hard by COVID-19 because diners could be exposed to contagion risks.  Therefore, a number of restaurant operators shifted to delivery services to mitigate such risks of both clients and staffs.  Despite fees paid to Food Delivery platforms in percentage of sales, such incremental cost can be considered a worthwhile marketing expense.  While restaurants became more accessible via online channel, providers of Food Delivery platform also helped advertising foods provided by restaurants which can substantially reduce marketing cost through other channels.

Not just street food vendors that turned to delivery channel, luxury five-star restaurants, also known as “fine dining” places, also inevitably joined this battle.  Prior to the outbreak, fine dining restaurants performed rather well as they continuously gained popularity among Thai consumers.  When the government temporary suspended their operations in accordance with the Emergency Decree, these restaurants adjusted themselves and started to provide delivery services on certain menus. For instance,  Bo.Lan - one of 50  best restaurants in accordance with ranking by The World’s 50 Best Restaurants Academy -  started offering “Take Home” service that customers can order directly with the restaurant.

Although adding delivery service can be a challenge for fine dining restaurant, particularly in keeping up quality of raw materials and other components to standards, it still allowed businesses to carry on.  This is still by far better than going out of business because of COVID-19.

Same Infrastructure, Different Products

As medical equipments have been in demand during the outbreak, many companies around the world made slight adjustment to their processes of existing infrastructures to accommodate production of relevant products such as alcohol, hand-cleansing gel, and face masks. Even Louis Vuitton brand owner, LVMH, decided to close production lines of three reputable perfume brands i.e. Christian Dior, Givenchy, and Guerlain since March and turned to produce hand-cleansing gel at those plants instead.

The story of LVMH was somewhat similar to BYD Auto, China’s major electric vehicle producer, which modified its factories into face mask manufacturing plants that was said to have massive daily capacity of five million pieces.  BYD took just one week to convert its battery and EV production facilities into medical supply manufacturing plants with strong dedication from its 3,000 plus staffs.

Other interesting examples included Cambodian rum makers Samai and Seekers Spirits, both of which suffered sluggish sales due to the outbreak.  They adjusted their business plans by turning to produce “alcohol-based cleaning products” and distribute them nationwide.

Same Products, Different Infrastructure

The front-line fighters in the battle against COVID-19 were medical staffs.  All countries poured in their best efforts to contain the outbreak because they recognized limited supplies of hospital beds and human resources in the medical field.  Therefore, it was essential to urgently build “field hospital” to cope with accelerated number of infected patients.  In this regard, the U.K. transformed Excel Exhibition Centre into treatment facility for COVID-19 patients called NHS Nightingale Hospital that can accommodate up to 4,000 beds.

However, the facility was unable to accommodate patients effectively due to scarcity of nurses.  Since finding nurses from other hospitals were difficult in the wake of the crisis, NHS Nightingale Hospital then sent letters to invite cabin crews of U.K.’s two major airlines, Virgin Atlantic and EasyJet, to help out at the hospital under the supervision of doctors. The two carriers have earlier suspended part or all of their operations.  First-aid and resuscitation training will be provided to crews that volunteered at the NHS Nightingale Hospital and they will continue to receive their salaries as usual from the airlines.

No change...No Chance

COVID-19 pandemic was a costly lesson for organization leaders which made them recognize the significance of agility.  They need to comprehend with consumers’ demand, understand business strengths and weaknesses, and figure out what need to be adjusted (product?, channel?, or infrastructure?) in order to respond suitably to and meet expectation of relevant stakeholders.

Most importantly, business adjustment can be made any time with no necessity to wait for the crisis to occur. That is because once the crisis kicks in, there may not even be a chance to adjust. !!!!

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Based on Three Proactive Response Strategies to COVID-19 Business Challenges article by Michael Wade and Heidi Bjerkan published in MIT Sloan Management Review (April 17, 2020)

Apilarp Phaopinyo
Senior CG Analyst
Thai Institute of Directors Association