consequences for covid-19 virus to the economy
The covid-19 virus has been referred to as “the new normal,” having terrorized countries and their economic operations. This new type of virus has affected different human activities and their ability to do business as usual. The virus’s effect can be felt in small businesses and large business organizations operating worldwide. Different levels of businesses-small, medium and large organizations- were affected according to their levels of operations. The mass level of business closure accounted for terrible losses. This has consequences for the economy; all of society is affected, which has led to dramatic changes in how businesses act and consumers behave.
With large and small businesses collapsing, we take a look at small businesses first. This is among the worst-hit business type due to their financial fragility. These businesses have experienced dramatic falls in business activity and revenue due to restrictions arising from the pandemic. For a small business enterprise, we will evaluate Lotuff- Leather. It is a family business founded in 2012 by the Lotuffs’ an association with designer and creative director Lindy McDonald. The company is composed of a team of 21 operating in Rhode Island. The businesses specialize in making some of the most explicit leather bags in the world. Businesses operating at a national level were also affected by the coronavirus pandemic. Bloom Energy is an example of a nationally operating business headquartered in San Jose, California. Founded in 2001, the company manufactures and markets solid oxide fuel cells that produce electricity on non-site. For internationally operating organizations, we look at Aeris Communications, founded in 2013; the company provided IT related services, mobility services connectivity and device platform, and infrastructure services.
Small businesses rely on customers flow and being open every day, and so when they are closed, they are not generating revenue, and issues start arising around the business setting. The fact that small business owners were not prepared for the pandemic makes the scenario tough, putting them in a position to make tough decisions that they have never made before. The business owners have to decide whether they will open or lay off some of the employees, which are tough decisions to make in the middle of a global pandemic. Despite having workforce issues, being a health crisis, the business owners may still be dealing with the virus’s adverse health effects among themselves or the employees. Most of the owners have had to deal with the drastic changes brought about by the virus.
The Rhode Island-based company had to rethink its ways of business and develop new models for its own profiting and the protection and well-being of the entire community. The business owners shifted from the original idea of making bags, briefcases, and such as making face masks and other body protections with approval from the FDA. This helped the business keep its employees working even during the pandemic, leaving many businesses laying off most of their workforce. The emergence of the virus has forced business owners to be more creative and innovative to catch up with the drastic effects that lower profit margins and make business operations difficult. Lotuff- Leather now shifted the determination to respond to the public health crisis. This made the company move from its original area of expertise to an entirely new venture. They focused their efforts on healthcare workers, people in the Rhode Island community who were in dire need of quality protective equipment.
One of the company’s seniors commented that the healthcare industry was an important piece of the region’s local economy. The company found a very positive response to both local region surroundings. The process has been an eye-opening venture for the business. Lotuff, a leather-based company that had no prior experience in healthcare or medical devices, would be able to get traction as quickly as the business did. According to the senior, the venture has been encouraging for the business. The change of mind followed the mass closure of public spaces and gatherings discouraging any business operation. With people being afraid to come out of their houses or better yet go to markets, businesses like Lotuff had devastating days, with some small enterprises being forced to close down. The business sales started plummeting with the arrival of the virus. The worst the virus got, the worst the effects were on businesses, forcing owners to figure ways to save their endeavors. Lotuff diverged its efforts from local leather bag maker to making protection garments. This changed their customer base from people who bought bags to health workers who needed protective garments.
Most business owners now had to think about getting to the market a product that was desirable at the pandemic time. For Lotuff-Leather, protective clothing for the Islands’ healthcare workers was the solution. This shows that the managers swiftly tackled the problem after sales plummeted to near-zero levels due to the volatility and the uncertainty of the whole thing. They had to think more than a luxury leather bag and briefcases. The small business owners had to figure a way to keep the cash flowing to maintain the workforce and inventory. Small businesses had a greater challenge since they do not exercise forecasting or preparing for the future in case of a pandemic like the current.
On the other hand, looking at the negative effects of the Covid-19 virus, small businesses’ financial fragility put them in financial jeopardy because they were not prepared for the pandemic. All small business owners found themselves needing financial assistance to keep their lives and businesses running. Most businesses aired complaints following the government orders of closure, calling for the government to keep their businesses going. Many businesses were forced to lay off some or all of the employees. Customers are also part of the affected party; having not prepared for the pandemic; most of the customers had to prioritize essentials to take them through the pandemic rather than purchase luxury bags. This way, the company’s inventory and sales were directly affected by the covid-19 virus. The pandemic period recorded the highest market uncertainty and volatility levels for most of the small businesses, Lotuff-Leathers included.
Looking at nationally operating businesses, Bloom Energy is a fuel source company that transitioned from a private company to a public company. Before the pandemic, the company essentially manufacturing fuel cells. Being a medium-sized business, the impact of the virus did not affect business operations as much. The business has been open even through the pandemic period. Although the seniors do not go to work, the manufacturing team goes every day, and the company’s supply chain has been able to make sure that they get in the product needed to manufacture. The companies supply chain has been strong and continued to perform despite the pandemic challenges. In the same period, the company started refurbishing ventilators that were in stockpiles and were able to make them usable. The company engaged in refurbishing several such ventilators to make a Covid-hospital if in need. With half of the company at home, the support staff mostly working from home, the company aims to provide reliable power to its customers in times of safety power shutdowns. To contribute to the ventilator production, the company had to merge efforts with the region’s Governor.
The company identified the need for ventilators in the pandemic period; they turned to the stockpile needing to be refurbished. The company got a team from its engineers and others from operations to read manuals for the ventilators and refurbished them. The company then reached out to the State, ordered several ventilators, and they had them fixed. The company got certified by the state and got more and more shipments of ventilators. With the emergence of the pandemic that no one had prepared for, its employees from the engineering and operations sector volunteered to refurbish the stocks. Most of the volunteers were not in the manufacturing line, which was the duty line, while most others were at home.
Given that interactions were cut to avoid transmissions of the virus, employers have had to adapt to new ways of establishing good relations with employees. Many companies allowed virtual hours for employees to share their free time online and engage with each other. Most of the company meetings are conducted online to allow for a swift continuation of companies’ operations. The employees are also encouraged to take meditation classes to make sure they are not stressed at work and stay productive. These are some of the ways that the company’s executives ensure good employee relations. From the customer perspective, companies like Bloom energy launched programs to entertain their consumers in this time of difficulty. This way, national-level companies try to adapt to the new normal. For companies such as Bloom Energy, 50 percent of the employees are temporarily forced to work at home while the rest continue to work with minimal changes in wages, work ethics to adapt to and work time due to curfew initiated in some countries.
Headquartered in San Jose, Aeris Communications Inc., mainly providing IT services, has had to deal with the effects of the Covid-19 pandemic. Still being an automotive industry, Aeris Inc. has had plummeting sales as people are inclined to driving less, and only a few people or no one is purchasing big-ticket items. The pandemic mostly impacted the customers and not the company’s projects. This occurs as many businesses worldwide are being forced to evaluate their business and the commodity they put to the market. Most companies have been forced to delay their projects because the pandemic has negatively impacted their main income source generated from sales. With no cash flow, companies have to postpone, delay, or even cancel projects. The globally operating company has a workforce from worldwide composed of diverse work partners and associates. Most of the company operations were interrupted, and meetings had to be conducted online. The adoption of technological advancements was quick to keep the operations going. The company had challenges with associates who were used to the older ways of working and had difficulties adapting to the new ways.
The company has increased the number of meetings to increase touchpoints to manage operations on remote local levels. The company also calls for many online interactions between the employees and board members to bring them together. The employees are tasked to collect data and report, increasing employee productivity even in the pandemic period. There are even social menus for the employees to free their minds off work and keep them engaged.
Most of the retail and service industry will change how they operate thy inventory and supply chain following this ongoing pandemic. Many businesses will have to transform or else be left out of business. All levels of businesses will have a new normal to adapt to. The new order of doing business will have to be online. Both consumers and sellers will have to adapt to new ideas and new ways of trading. Business owners will face the challenge of deciding how to keep their customers and target new ones to be profitable. The service industry has to figure out how to fit in and adapt to operating in the prevailing conditions. Businesses will be inclined to taking more risks because they need to be profitable.
Looking at all businesses’ levels, we see that the levels are affected depending on their operational region and target market. For the small businesses operating locally, the owners have been faced with more challenges than any other level. Given that such businesses operate on a small scale, most of them do not have a forecast for future misfortunes to save the business, so when they are hit, some are forced to close down, never to reopen again. Others, however, have been forced to fire some or all of the employees to cover for the operations costs and make sure that the business does not operate at a loss. Owners have been forced to recruit family members to assist in business operations. Some of these businesses start targeting a low market population decreasing sales.
With medium enterprises, businesses have been stuck between closure and keeping up with the prevailing conditions. Some nationally operating companies have diverged from their usual service or commodity provision to make goods essential in fighting the pandemic. This has caused companies a great deal of invention and innovation to survive to make profits and retaining employees. In contrast, other companies around the world are being forced to fire employees and eventually close down. The companies have also tried to keep their employees active during this pandemic period in social interactions conducted online.
Internationally operating companies have been the worst hit, with many countries cutting trades with each other. Businesses have been forced to migrate into the online way of conducting business. Both customers and businesses have to find ways of operating online, as this is also a new normal and a way of survival for such businesses.
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