COVID-19: Global Business Impact Analysis

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The new crown epidemic has emerged in many countries and has become a common challenge for all mankind. At the same time, the epidemic poses a major risk to the global economy. This article aims to provide relevant insights and suggestions for business leaders in various industries. Please note that due to the rapid spread of the epidemic, some of the opinions in this article may soon be inappropriate. The opinions in this article are based on the global epidemic situation in mid-March, 2020. We will regularly update according to the development of the epidemic situation.

As of this writing, more than 260,000 people worldwide have contracted new coronary pneumonia and more than 10,000 deaths. Data from China, South Korea and Italy show that the elderly are at higher risk of infection. More than 180 countries and regions have confirmed cases, and more than 80 countries and regions have local transmission. The World Health Organization (WHO) announced in early March, 2020 that it would list the new coronavirus pneumonia COVID-19, referred to as new coronary pneumonia as a global pandemic, and made it clear that the spread of the epidemic in the world is no longer possible Avoid, but at the same time emphasize that governments, businesses and people of various countries still have great ability to change the development process of the epidemic.

This article will first briefly describe the three main modes of the current epidemic development, and envision two possible scenarios and economic impacts of the global pandemic, and finally share observations and suggestions for the company’s initial response. The opinions in this article are based on analysis of past major emergencies and their own industry experience, and only represent our family. Faced with the same dynamics of the epidemic, it is entirely possible for other institutions to draw different views. Similarly, the scenarios assumed in this article should only be regarded as two of all possible scenarios.

Three Modes of Epidemic Development

Many countries urgently need to effectively block the spread of new coronavirus. Although the response methods vary from country to country, in general, three modes have emerged, two of which have been successful, and all three have provided valuable experience in fighting the epidemic. We admit that due to the limited knowledge of local communication dynamics, we do not rule out the possibility of other results:

In a series of effective social isolation limit (social Distance under) measures, growth has slowed cases; these measures include national and local isolation, reducing travel and home office staff, and the selection of the people. The detection ability is strong enough to meet the needs, so as to grasp the development of the epidemic situation more accurately.

Assuming that the virus has seasonal characteristics, the spread will be further contained. By mid-May, the public was optimistic about the epidemic. The southern hemisphere coincides with winter, and the number of cases has risen, but at this time countries have already formulated more effective response measures. Although the incidence of infections will rise again in the fall of 2020, countries will be fully prepared by that time and economic activity will continue.

Economic Impact

Large-scale segregation, travel restrictions, and social segregation have led to a sharp decline in personal and business spending. This phenomenon continued until the end of the second quarter, which in turn triggered a recession. Although the epidemic in most parts of the world was brought under control in the second quarter of the second quarter, the vicious circle of economic recession began to play a role, and the depression continued until the end of the third quarter. People continue to stay at home, companies lose income, lay off employees, and the unemployment rate rises sharply. Business investment has shrunk, corporate bankruptcy has skyrocketed, and pressure on banks and the financial system has skyrocketed.

Employee Safety Is Paramount But Lacks System Guarantee

For example, given that the virus may spread without symptoms, measuring body temperature may not be the most effective screening method. Therefore, requiring employees to stay at home when they feel unwell may be more helpful in reducing the spread of the virus. Such measures will be more effective if employees can be protected from compensation—other consequences can also be avoided. Some companies have not considered the joint effects of the current measures. For example, it is forbidden to travel on business but there is no corresponding home office arrangement, and employees are likely to gather in the office, increasing the risk of virus transmission.

Optimistic Believe That Demand Returns

The possibility of a larger economic downturn and a longer duration must be accepted. While the economic recession has not yet begun, the existing options may be more favorable than in the future. For example, cash can be withdrawn when the current price has not fallen further.

Not Just In Front Of You, But In The Distance

The measures to be implemented immediately are certainly important. As shown in Figure 4, most companies have done a lot of response work. Many of these things are especially important in long-term consideration. The economy may be in recession. Industry structure may change. The credit market may fail, and fiscal stimulus may have little effect. Supply chain flexibility will generate a premium. These scenarios may be unbelievable for management who has worked 18 hours a day, but they need to take time out of their busy schedule to consider how to deal with long-term impact.

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