Like mankind, economies and businesses are also vulnerable to threats that are beyond the control of the policy makers, the industry leaders or the stalwarts of the business units. While onset and the advancement of any epidemic is not purely in the hands of the decision makers and society, but they can learn from past experiences and be better prepared for the future.
Some of the key practices that businesses need to inculcate in their core model can be outlined as below:
- - Being prepared
- - Refined HR policies for teams to work from home or collaborate over a common platform, leave with pay, remote working, minimising personal interactions, while all these are great methods and will work well for service or delivery oriented businesses, the same might not work for manufacturing and allied industries
- - Revisiting travel policies, and if required enforcing a ban
- - Backups for supply chain of raw materials and finished goods
- - Well-being of the employees and their families, like stocking up on rations, flexible policies
- - Modular and lean supply chain to remodel it based on the situation and demand
- - Being able to make back up plans selflessly and in such a way that the whole industry and society/country benefits from it
- - Having an updated and open channel of communication with their employees, suppliers, vendors and all stake holders
- - Consulting experts, and being agile to change policies, frameworks, process models based on real time and accurate situation of the epidemic
- - Be prepared for the unexpected
- - Learn from the outbreak and plan and be better equipped for the next disaster
While all this is good from a prevention and preparedness perspective, one needs to keep in mind that a business exists to solve a problem, earn revenues, and safe guard the interests of its employees, suppliers, stakeholders and investors.
It’s a great testing time for the entire world after the havoc caused by the outbreak of Coronavirus. It has had its major impact on China where it first surfaced and has caused the most number of deaths till date. China is the world’s 3rd largest economy and today is a sad situation that most of their production lines are standing still, and the economy is taking a toll. Being one of the largest countries that export raw material & finished good to most of the developed and developing nations, the onset of the virus has literally ruined the economy.
Many countries that source their key goods from China have very limited reserves and have started looking for alternate markets for supplies – they are sympathetic towards China, but life must go on, and hence they are looking at other markets. The demand created because of the situation in China is a blessing to some industries in some countries, but the fact is that, many of them might not be able to cater to the need at such a short notice or some eligible players might go unnoticed because they do not have any plan to make their brand visible or many more other reasons like:
- - Capacity building is not easy
- - Clearances and approvals for increasing capacity
- - Certifications and approvals
- - Qualified personnel to manage new inflow
- - Expertise to get seen, deal & transact in new markets
- - Satisfying new set of customers
Some of the steps that any business can take to act quickly and reengineer their business models are:
- - Aligning current teams to cope up with additional demand and meet quality standards, through internal trainings and transformations
- - Allocating funds
- - Understanding the target market, their specific requirement, quality standards
- - Researching on the immediate past supplier from China or neighbouring countries
- - Orientation of the team and training
- - Marketing in the crisis economy
- - Identifying the right market where their products or services might be required
- - Reaching out to the right markets and the right decision makers
- - Reinventing their business model to suit the needs of the new prospects
- - Positioning and packaging of their organisations, its services or products and capability, and showcasing it to the prospect market
- - Investing in building the trust of the brand, so that it can serve as a testimony for the new prospects
- - Reality check on the status of COVID 19 in the country, its impact, progress, steps being adopted to contain or eliminate the virus, and its impact on your business
- - Back up plans if the Coronavirus impact becomes very significant and pose a threat to running regular operations
- - Logistics, supply chain, government norms, etc.
One word of caution here though, and it is that the demand created might be temporary as, once China’s industries get reviewed, the buyers might just go back, which one never knows. So, businesses must be vary of this, and take steps to ensure:
- - The orders are secured for a decent time frame which allows it to justify the investment
- - Quality deliveries
- - Building client and consumer trust
- - Build their brand in accordance with the basic supplier requirement norms of those nations that it chooses to work with
- - Deliver on its promise
- - Build a workplace that resonates the same
- - And take the decision to expand only after having a plan to get all the above in place
Sectors in India that are likely to benefit from China’s unfortunate displacement are:
- - Iron and steel
- - Auto and ancillary components
- - Engines
- - Machines and machine parts
- - Pumps
- - Clothing and accessories
- - Carpets
- - Furniture
- - Handicrafts
With the gap created by the setback in China, “India will now be looked upon as a short to long term option and sectors like Carpets, furniture and handicraft stand to benefit, with a growth of about 10 -15% in exports,” as per Mahavir Pratap Sharma, Former Chairman, Carpet Export Promotion Council (CEPC).
According to Rakesh Kumar, Director General, Export Promotion Council for Handicrafts (EPCH), “As far as exports are concerned, it is a major emerging opportunity for India, with some major trade shows that happen in Germany and other markets, where the participation of Chinese delegates and buyers have been next to negligible now. This situation is a definite opportunity - buyers are thinking about an alternative supply source that may not necessarily be India and can be markets like Vietnam, Indonesia or Malaysia as well. One has to have a first mover approach to be ahead of the curve as he does not see the situation improve in China till the end of Q3 2020.”
It is important to note that not everyone will have faith in India as capacity building has been an issue among large segment buyers, but we can do better with mid segment buyers where capacity building does not come into play, and the next two months with be important for us to wait and watch.
Indian organisations need to take note of the fact that there might be a new opportunity in the offing for them to make good, the negative consumer sentiments that were prevailing for a major portion of 2019!
In order to capitalise and benefit from this opportunity, organisations outside of China, will have to ensure that they have their basics in place to: be visible and attractive to potential buyers by reinventing their business models, revisiting their business processes, reenergising their brand building and marketing initiatives, investing in best Digital Marketing practices, fine tuning their supply chain, strengthening their HR policies and guidelines through an organisation cultural transformation and be agile to consume and reap the benefits of the new opportunities that are likely to come towards their business.
Get in touch with us today, to know how we can help you scale your organisation by leveraging the industry best practices and prepare your business on a growth path in these tough times.Content Reference & Sources:
The views expressed in this article are the interpretations of the author based on his experience and interactions with the industry and with due credits to:
1. SHRM, HBR, and Economic Times