Pandemics can lead to major changes in industries and markets. As in the case of the COVID-19 pandemic, these changes can present opportunities for some businesses, and challenges and problems for others. The business consequences of pandemics require companies to ensure that their strategic planning includes options and solutions for business continuity and growth despite the potential negative effects of major health trends affecting local, regional, and the global market. These options must identify business opportunities that can be exploited to counteract the adverse consequences of pandemics on business performance, growth, and stability. Successful strategic planning for contingencies, especially in vulnerable industries and markets, can minimize the negative effects of pandemics on business.
The effects of pandemics on business depends on various factors, such as the type of business, the industries involved, the target markets and market segments, geographical limitations, and applicable governmental policies and regulations. Online business and brick-and-mortar operations can have different experiences in managing the business impacts of pandemics. Moreover, the extent and severity of the health issues linked to pandemics may require businesses to implement new policies or not make changes at all.
Business Impact on Consumer Goods Manufacturers
In the consumer goods industry, business challenges during pandemics depend on firms’ markets and product types. For example, fast-moving consumer goods companies, like PepsiCo, may experience a decline in sales linked to a decline in consumption. During a pandemic, like COVID-19, consumption may decrease as a result of the restricted movement of people because of curfews, physical distancing, quarantine rules, and related policies. Furthermore, companies’ telecommuting or work-from-home arrangements may reduce consumers’ likelihood of going out and buying more consumer goods. This situation can significantly reduce consumption, especially in commercial areas or at workplaces. However, some of this negative impact of pandemics on consumption is offset by consumers’ ability to purchase online and have goods delivered to their homes.
In the sporting goods industry, demand for products may remain the same, considering the relatively slower inventory turnover of these products compared to fast-moving consumer goods. However, demand may decline as a result of fewer outdoor activities and events during pandemics, like COVID-19. Still, similar to the case of the fast-moving consumer goods industry, sporting goods companies, like Nike, may benefit from online sales to, at least, partially offset the decrease of foot traffic in brick-and-mortar establishments because of restrictions during pandemics.
Effect on Pharmaceutical Firms
The business performance of pharmaceutical companies may increase as a result of pandemics. For example, Pfizer can produce vaccines and medicines for treating or preventing diseases during pandemics. The necessity and urgency of using these products mean that pharmaceutical firms typically benefit during pandemics. Market demand for some of these companies’ products may increase during pandemics. As a result, pharmaceutical firms may experience an increase in their sales and profits.
Impact on Delivery Service Providers
Delivery service providers have business growth opportunities during pandemics, like COVID-19. For example, buyers who would rather stay at home to avoid exposure to disease tend to buy goods online and have them delivered to their homes. In such situations, there is an increase in market demand for delivery services. Thus, during pandemics, delivery service providers may experience more business opportunities for higher revenues, profits, and growth.
Amusement Parks (Theme Parks)
Amusement and theme park businesses, like those of Disney and Universal Studios, face business challenges related to pandemics and similar health situations. As people try to reduce their risk of exposure to disease by reducing their contact with others, attendance in these amusement parks decline. This condition is especially true in countries that strictly implement restrictions on businesses, events, and public gatherings to combat pandemics and related health problems.
Human Resource Considerations
Companies that implement telecommuting or work-from-home arrangements may face new challenges that come with changes in employees’ work processes and workplace characteristics. For example, employees may become demotivated in the physical absence of leaders and colleagues. Managers may need to consider how Maslow’s Hierarchy of Needs applies to telecommuting to ensure workers’ motivation, job satisfaction, and productivity. Other theories, models, and solutions from industrial psychology may need to be considered to optimize the performance of human resources in telecommuting or work-from-home arrangements during pandemics. In this regard, business management objectives include optimizing employees’ productivity, minimizing the negative effects of telecommuting on workers and their job performance, and using the strengths of online technological tools to improve business efficiency and effectiveness.
References
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