Since the COVID-19 crisis struck, organizations in every sector worldwide have seen their revenues drop substantially in a matter of days. For many, cutting costs, establishing remote work arrangements, and reducing employee workload have been key steps to ensure survival during these uncertain times. But, there are other ways to capture opportunities that may not be visible to some during a state of panic. Take a look at three response strategies to match organizational infrastructure with emerging market trends!
Strategy 1: Same Products, Different Channel
One proactive response to COVID-19 is to offer the same products and services through an online channel. This, for example, can be offering a digitized form of your product or delivery.
When Chinese cosmetics company Lin Qingxuan was forced to close 40% of its stores, including all of its locations in Wuhan, sales plummeted by 90%. However, the company redeployed its beauty advisers as online influencers, leveraging digital tools such as WeChat to engage customers virtually and drive online sales. On Valentine’s Day, Lin Qingxuan launched a large-scale, Livestream shopping event featuring more than 100 beauty advisers; one adviser’s sales in just two hours equaled that of four retail stores. The company’s February sales climbed 120% over last year’s.
Strategy 2: Same Infrastructure, Different Products
COVID-19 is dampening the demand for many products and services, resulting in an underutilization of organizational infrastructure. Factories run under capacity; restaurants, bars, and hotels sit empty; service providers go unused.
While the need for some products and services has fallen, however, demand for others is high and even growing. Some organizations are taking advantage of this shift by deploying existing infrastructure to produce different products or to offer new types of services.
Strategy 3: Same Products, Different Infrastructure
Lastly, struggling to meet the demand for their products or services has left some companies scrambling to augment their infrastructure. Finding new infrastructure is easier said than done and often requires collaboration with external partners, but a number of organizations worldwide are taking inventive steps to bridge such gaps.
Amazon recently announced that it is looking to hire an additional 100,000 employees in the United States to meet increased demand from homebound online shoppers. It has now partnered with the ride-booking company Lyft as both demand and fares for Lyft trips have fallen dramatically. Lyft is encouraging its drivers to pursue positions as warehouse workers, delivery people, or grocery shoppers to earn additional income, and applications for Amazon positions are available through the Lyft driver web portal.
Out of short-term necessity, organizational responsiveness to COVID-19 has been largely reactive. The following decision tree can help executives to more proactively and strategically think through their potential COVID-19 response options.
Source: MIT Sloan Management Review