Pandemic, Businesses and Survival

 

Product diversification and customisation aided with innovation, secures the position of a company in times of critical condition in the market. During pandemic many companies was hit by the uncertain market condition and demand pattern. Like pandemic there are other major events on earth which showed a sharp decline on the amount of goods and services by consumers, like 2008 subprime crisis, when there was a global economic crisis and liquidity crunch or may be, it is the 2016 demonetisation which made the market illiquid.

Due to increase in complexities in businesses and its models more uncertain volatile market conditions business unit may have to face. It has to take immediate action which suits the market changes for survival.

If we discuss the pandemic people has to stay home and work remotely, technology is what we need. One of the major industry which boom during the pandemic is the information technology industry, where we see a major product diversification and customisation take place by understanding the demand patterns and consumers requirement.

I would like to discuss three international case studies along with the effect in their share prices to make my arguments strong.

Since, USA deals in IT services most prominently among the top IT services producing countries,  IT stocks can fight the volatile market and give investors fair return in the time of crisis, then other sectors like real estate, airlines, oil and gases, tourism, etc which suffered a great loss during the pandemic, since movements are much restricted.

Microsoft - Its diversified products apart from Windows operating system , are  Microsoft Office Suites, Xbox gaming consoles, Internet Explorer, Edge Web Browser, cloud computing under the name Microsoft Azure  and their client services are very popular, making the company stand more firmly creating, its unique selling proposition.

During pandemic the intensity of technology usage has increased creating a surge in revenue, up 14% for the year ending June 30, 2020 making $143 billion. Although there is was sudden decrease in the price of share as the pandemic broke, Microsoft recovered its position quickly making innovation in the products but Platforms and tools like Microsoft learn, for certification on technology has an increased usage of 475% during pandemic. Linkedin under Microsoft is the world’s largest professional network and Linkedin learning has more than 60,000 courses on various topics. Git Hub is a tool of Microsoft where aspiring and experienced software engineers are learning different courses. Views of these websites has increased tremendously during lockdown.

These platforms helped creating technically skilled human resources and thus increasing the revenue structure of Microsoft. Microsoft has provided almost all industries its tech support and gave them improved business models during the pandemic. Cloud computing of Microsoft also has witnessed a massive growth in pandemic. Although the stocks of Microsoft made a steady growth during pandemic but they were a bit volatile due to trade cycles and other market risks.

2. Apple – A strong player in the tech market, with its diversified and high end products captured the market share to a great extent. Mac, Iphone, Ipad , Apple TV, Apple watch, Ipod has a craze among the buyers worldwide which helped apple generate a strong revenue over the years, giving a robust profit which has increased with time and product diversifications.

Again the launch of Apple Iphone SE, in April 2020, a low cost iphone to capture the buyer looking for cheaper options, for those who want to spend less during pandemic. Giving the low cost mobile phones of China a tough competition, since China combats a disruption in production pattern. Deutsche bank analyst reported, they see a bullish behaviour of Apple share prices.

When the Pandemic hit the stock market of USA (March -April 2020), there was sudden fall of share prices, the shares started trading around $56 -$58, but it recovered its position due the launch of Apple Iphone SE, during September  2020 & December 2020, when a surge of share price around $132- $134 was noticed making an  increase of more 120% (approx) within few months.

Again the Apple CEO Tim Cook said on a January net sales of Iphone SE will grow by double digits in Greater China and India, also in other emerging markets, such as Brazil, Thailand and Turkey. Due to the launch of Apple Iphone SE, in the global market, share price are predicted to be on a positive side in the coming time, giving investors their fair returns.

3 Adobe – This Company creates application software and web services which can edit, manipulate, view, create and manage word, picture and video files. The most popular product is Adobe Acrobat which manage files in a particular format called PDF. Other adobe product are drawing and design apps like Fresco for Iphone and Illustrator for Ipad, Adobe XD, Adobe Photoshop .The company earns a huge revenue by licensing, subscriptions of its applications and also by creating services. It is extremely innovative in the time of pandemic, added artificial intelligence to its software, as it has to serve its clients who are in remote work stations meeting the difficult parameters of professional life. Due to its efficient and increased innovations the company very well recovered its loss in March 2020, due to the sudden crash of stock market. During March 2020 the price of share of Adobe was around $286 -$310 (approx) which recovered massively during september, the price was around $530.

There are other top IT companies like Google, facebook and their partners or subsidiary companies helped the world survived the pandemic and generated employment and rendered product and services. In short helped in the cash flow, money supply and made the economy run.

Not all companies have a massive flow of cash and cash reserves as the above three.

If we consider small Indian companies, which can be other type of case studies, when the scenario, market condition and consumers are different. We can understand how another kind of business, relatively much smaller than the American giants has survived the game.

Zomato and Swiggy started delivering grocery, essential items, liquor to households and also started delivering commodities and food from one household to another. Due to lockdown these facilities pumped up the revenues and could met their expenses with a surplus. Amazon also ventured into food delivery giving tough competition to Zomato and Swiggy. The sudden decision of lockdown and the change in behaviour of consumer, forced the company to innovate and change business model. Uber started delivering medicine with its partner Medlife. Bike taxi company Rapido has also started medicine delivery. For the huge amount of traffic of data of these mid cap companies, information technology was the pillar. Different IT companies worked as the tech support, without the help of IT and the top IT giants the mid cap companies wouldn’t had survived.

Small business has also become the key to survive, since many lost jobs due to pandemic. Sole proprietorship or businesses by individuals were the head turners. People took initiative to learn online methods of transactions, developing their products and websites, learning the logistics and creating a supply chain, learning how to market their products through social media. The pandemic gave a dynamic approach of survival to the society and its people, it made individuals to take up challenges, that they never thought.  

 Packaged food and its delivery became one of the vital business that grew last year, since the older and younger generation cannot take the burden to run the kitchen alone without domestic help. Online yoga, painting, sewing, tailoring, craft, gardening, interior designing and cooking classes generate revenue from the market in a massive way. These classes got good sponsorship which made them survive quite well, giving way to a special kind of small business. Paid webiners and online courses on shares, self development, critical thinking, art and craft, public speaking are sincerely developed by learned and skilled entrepreneurs. Making way to people to adapt the new normal, generating revenue and giving the basic needs to many household with the help if IT companies and social media platforms.

Although it is impossible to cover all kinds of business and their changes but with a few examples and case studies, I tried to depict how large business giants, mid cap companies, small businesses and individuals combat the pandemic together. Each one of them were suppliers or producers and clients or customers to each other. How the eco system of survival and revenue generation has worked together. Pandemic, covid, job loss, product diversification, change in business model, generation of new kind of small business, survival are the concepts which helped the people and the society to think in a different angles, in terms of revenue generation and products, brainstorming sessions of executors and developers of different business models, creating efficient and effective group dynamics, collaborating with different kind of business organisations for mutual benefit. Thus evaluating business, strategies, life and its journey differently, to combat the change and survive.

For restoring or betterment any difficult situation needs positive change, quality time management, efficient human resource, product diversification, innovation, interdependence   of all big and small players with mutual interest and utilising each of their core competence.