Top 10 Business Ideas In Covid 19 – Summary. Even in severe economic recessions and downturns, some companies can gain advantages. In the last four recessions, 14% of large companies increased both their sales growth rate and their EBIT margin. A shock like the Covid-19 pandemic can produce lasting changes in customer behavior. To survive and thrive in a crisis, start by examining how people spend their time and money. Challenge traditional ideas and use data to actively search for anomalies and surprises. Next, adjust your business model to reflect behavior changes, considering what new trends might mean for how you create and deliver value, who you need to partner with, and who your customers should be. Finally, put your money where your analysis takes you and get ready to make more aggressive and dynamic investments.
Even in severe economic recessions and downturns, some companies can gain advantages. In the last four recessions, 14% of companies increased both their sales growth rate and their EBIT margin.
Top 10 Business Ideas In Covid 19
A shock like the Covid-19 pandemic can produce lasting changes in behavior, and these companies are quick to spot changes, adjust their business models to reflect them, and aren’t afraid to make investments.
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Examine the changes in the ways people spend their time and money and the effects on the businesses involved. Then, consider what the changes might mean to how you create and deliver value, who you need to partner with, and who your customers should be. Finally, be prepared to put your money where your analysis takes you.
It will be quite some time before we understand the full impact of the Covid-19 pandemic. But the history of such clashes tells us two things. First, even in severe economic recessions and downturns, some companies can gain advantages. Among large companies that did business during the last four recessions, 14% increased both the growth rate of sales and the EBIT margin.
Second, crises produce not only a plethora of temporary changes (mainly short-term changes in demand), but also some lasting ones. For example, the 9/11 terrorist attacks caused only a temporary decrease in air travel, but caused a lasting shift in societal attitudes about the balance between privacy and security, resulting in permanently higher levels of detection and surveillance. Similarly, the 2003 SARS outbreak in China is often credited with accelerating a structural shift toward e-commerce, paving the way for the rise of Alibaba and other digital giants.
In the following pages, we’ll look at how companies can reassess their growth opportunities in the new normal, reconfigure their business models to better take advantage of those opportunities, and reallocate their capital more effectively.
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The Covid-19 pandemic has severely disrupted global consumption, forcing (and allowing) people to unlearn old habits and adopt new ones. A study on habit formation suggests that the average time for a new habit to form is 66 days, with a minimum of 21 days. As of this writing, the lockdown has already lasted long enough in many countries to significantly change the habits that had been the basis of supply and demand.
Companies seeking to emerge from the crisis in a stronger position must develop a systematic understanding of changing habits. For many companies, that will require a new process to detect and evaluate changes before they are obvious to everyone. The first step is to map the potential ramifications of behavioral trends to identify specific products or business opportunities that are likely to grow or shrink as a result. Consider how the pandemic has caused people to stay at home more. The implications include an increase in home office renovations, leading to increased demand for products ranging from paint to printers. Unless we become sensitive to new habits and their cascading spillover effects, we will miss weak signals and miss opportunities to shape markets.
The next step is to categorize demand changes using a simple 2×2 matrix, based on whether they are likely to be short term or long term and whether they were existing trends before the crisis or have emerged since it began. The four quadrants distinguish between impulses (temporary deviations from existing trends), shifts (temporary new trends), catalysts (accelerations from existing trends), and innovations (new lasting trends). Consider again the “stay at home more” behavior shift, which has had a serious impact on retail shopping. The question is: Will the move from retail to online stores be temporary, or will it be a structural change with permanent knock-on effects in other areas, such as commercial real estate?
We would place purchases in the catalyst quadrant. The pandemic has amplified and accelerated an existing trend rather than creating a new one; people were switching to electronic shopping before the lockdown. But the shift is more structural than temporary, because the scale and duration of the forced switch, coupled with generally positive channel performance, suggests that in many shopping categories customers will see no need to switch back. Therefore, retailers must adapt their strategies to the new normal. In fact, before the lockdown, many retailers were responding to the digital challenge by redefining the purpose of the physical store, often reimagining shopping as an engaging social experience rather than a chore.
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Therefore, this framework can be used to highlight which trends to follow and which ones to shape more aggressively. Companies cannot take advantage of all possibilities and should not try. To get an idea of which ones to support, ask yourself if any change in demand is temporary or permanent. Many of the changes seen immediately in response to Covid-19 were driven by fear of infection or compliance with official directives, and were therefore likely temporary. But others were accompanied by greater comfort or better economy, so they’re more likely to stick around.
Any analysis of growth opportunities must go far beyond simply categorizing what you already know. You need to challenge your ideas about what’s happening in your traditional business domains by looking at data fresh and carefully. This requires you to actively look for anomalies and surprises.
Anomalies typically arise from data that is both granular (revealing patterns hidden by leading averages) and high frequency (allowing emerging patterns to be quickly identified). As behavior changed with the Covid-19 outbreak, for example, rich sources included data on foot traffic and credit card spending. An analysis showed that the recent drop in movie attendance occurred before theaters in the United States closed. This, combined with an existing trend of declining attendance, suggested that the change was consumer-driven and likely to persist in the absence of innovation. Live sports attendance, by contrast, declined only when events were officially cancelled, suggesting a stronger possibility of a behavior rebound.
In the military, one technique for finding out what you don’t know is to use the “eyes of the enemy.” Military leaders wonder, what is the enemy paying attention to? and then shift your own attention accordingly to illuminate potential blind spots and alternative perspectives. The same can be applied to industry mavericks and competitors: Who’s doing it right? What market segments are your rivals targeting? What products or services are you launching? The same principle can be extended to customers: Which ones are exhibiting new behaviors? Which have remained loyal? What new crisis-induced needs do customers have and what are they paying attention to? It can even apply to countries: What patterns emerged in China, where both the outbreak and recovery ran ahead of those in Western nations? In your own organization, ask: What workplace innovations are taking hold at leading companies? What new needs are employees responding to? What opportunities do they represent that could be further developed and implemented?
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Armed with an understanding of where your opportunities lie, you can now move on to the next step: shaping your business model to capture them.
Your new business model will be shaped by changes in supply and demand relevant to your industry. Many manufacturing companies, for example, will be deeply affected by the structural and likely permanent impacts of globalization brought on by the pandemic. As large markets like the United States raise trade barriers, for example, many companies will need to refocus critical components in their supply chains, from R&D to assembly.
To figure out what business model the new normal requires, you need to ask basic questions about how you create and deliver value, who you’ll partner with, and who your customers will be. As an example, let’s look at how retail purchasing companies should adapt to the demand shift towards digital.
The value that many retailers provide to customers traditionally comes from the quality of their in-store service. Consider the Chinese cosmetics company Lin Qingxuan. It suffered a 90% collapse in store sales after the outbreak, when many places were forced to close and others saw foot traffic drop. In response, the company developed a strategy for digital customer engagement that would replace the in-store experience: turning beauty consultants in the company store into online influencers. The success of this move has prompted further investment in digital channels. Thank you
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