Question

COVID-19’s Grim Milestones: Impact on

Business is Real but Opens Up New

Growth Areas

April 2, 2020Posted by China Briefing Reading Time: 6 minutes

In his book “La Peste” (The Plague), Albert Camus writes, “Pestilence is so common, there have been as many plagues in the world as there have been wars, yet plagues and wars always find people equally unprepared. When war breaks out people say: ‘It won’t last, it’s too stupid.’”

Yet looking at the now well-known Johns Hopkins dashboard online it seems that COVID-19 is here to stay longer and affect us deeper than what we were ready to accept.

While the inevitable global slowdown that has followed is unquestionably a time to contemplate and look back, we should also stay receptive to the notion that progress comes from dire situations and from thinking about a problem with ever changing perspectives – put it another way, crises necessitate creative solutions. And so we would be foolish not to look into

opportunities in these unique times – mankind needs to push forward, especially when under such pressure

Regardless of one’s economic philosophy, the global reach of this virus should now more than ever encourage continuous collaboration between individuals, and between the public and private sectors.

On impact

As usual, doom and gloom overshadows the good news, and worldwide now, foreign and domestic small and medium enterprises (SMEs) and multinational companies (MNCs) are suffering and in some extreme cases even shutting down. Goods have been stranded at ports for weeks, hundreds of cities worldwide are in lockdown, civil and commercial transportation are experiencing cuts, delays, and cancellations like no other time. Consumers are behaving erratically, resorting to panic shopping, or revising their entire values of material versus immaterial needs. Legislators are trying to catch up with daily events to accommodate needs, and there’s pain and strain on global supply chains.

On opportunities

However, several companies are not silently watching – they have adapted like chameleons to the situation and stretched their brand, reshuffled their production lines, and catered to new needs. In short, they have listened to the market and taken a risk or two, making COVID-19 the main propeller for new growth in some sectors and reviving dormant potential in others. Even the judiciary system in China is going online – filings and hearings are increasingly digitized, which could enhance the speed of executing work and get rid of some of the backlog. In the realm of productivity, we have seen a strong rise in cloud services for collaboration, solutions to minimize paperwork and physical contact, reimbursement apps and digital solutions for accounting, and the growth of contact-less devices for an infinite number of environments.

Going sector-wise, we are also seeing opportunities in the below:

 Healthcare and health technology – pharmaceuticals, supplements, medical devices, personal protective equipment (PPE), telemedicine, smart hospitals and online

consultations, digital medical assistants, apps and mini-apps, self-diagnosing medical

devices.

 Electrical appliances – dishwashers and washing machines, sterilization

machines, sweeping robots.

 Office cost reduction opportunities – office rent is expensive and flexible work

arrangements are yet to be explored in their full functional scope. This will open up opportunities across multiple and linked sectors, such as office space redesign, building remote work systems, software platforms, and cloud-based services – all of which will likely see significant gains once the world economy goes into post-COVID-19 recovery mode and employers keep their office space costs in check in case their staff will need to work from other locations.

Questions

1. Based on the above article, if you were an entrepreneur, which sector would fit you the most? Justify your answer by conducting an entrepreneurial feasibility analysis.

2. Using the Five forces of Porter, what are the risks that come with entering this sector?

3. After you have done the five forces of porter analysis, would it be feasible to enter the market with a niche strategy? Justify your answer.

4. Will you consider launching a business in this sector? Discuss your answer in detail.

Answer 1

1.The most benefitted sector at the present moment to work in would be the medical sector. Medical sector comes with many advantages like ther will be stability in the revenue and also after the pandemic stops the revenue in medical secttor would slow down but woyld then also be profitable.The increase in epidemic in the world has made the medical sector a high profitbality and the most reliable sector.

2.The risks in entering this industry according to porter's five forces are

Threat of new entrants - The liscensing procedure for the new firms is very lengthy which makes an obstruction for new firms.

power of suppliers-The medical and pharmaceutical industry is mainly run through suppliers and the suppliers are mainly scientists and researchers.

power of buyers- The power of buyer does not affect much in the medical industry as they are bound to make a purchase when in need.

availability of substitutes- There may be availability of vast amount of substitutes in the industry which makes the value of our prroduct less.

competitive rivalry- There is a large competitive rivalry between the fiirms producing same medicine or service in this sector.

3 Yes, it would be suitable for the entreprenuer to get into the market with the suitable and niche strategy and especially at this point of time the entreprenuer can generate super noormal profits too.

4 Yes an entreprenuer should consider driving the business in this sector as there are barriers in every industry but pharmaceutical industry has many advantages as compared to other industries and one of the major advantage is that it can yield constant revenue even when the other sectors are going through negative growth .