All posts by Joseph Abbey Davis

The Retail Sector: Navigating the Pandemic Crisis Headwinds Towards Recovery & Sustenance

The Retail Sector: Navigating the Pandemic Crisis Headwinds Towards Recovery & Sustenance

Considering what the world has learnt from previous recessions, the key aspects to stress on during this pandemic crisis are that they expose existing weaknesses, accelerate emerging trends and force organizations to make structural changes faster than they had planned. This is particularly true in retail. During the recession of 2008–2009, e-commerce grew and brick-and-mortar retail declined. As the economic recovery took hold, that trend continued while off- price, discount and emerging players succeeded by appealing to new consumer demands.

In the wake of the pandemic crisis, a similar pattern is being followed, albeit with new trends shaped by a pandemic-driven global recession. Evidently, certain truths remain: Retailers struggling before COVID-19 will likely see their declines accelerate. Income disparities will drive continuing business toward off-brand and discount retailers and online shopping will continue to accelerate.

But several other potential trends are shaping the COVID-19 era retail environment. These include the following:

COVID-19 is having a significant impact on product demand and sales channel preferences through denaturing consumer behaviour. Consumers spend more time at home, are faced with deflated social lives and restricted mobility, heightened health concerns and financial insecurity.

The observations that provide clarity to the prevalent situation are that retail orthodoxies will be challenged and the industry will likely look much different than when the world entered this crisis.

For now, the picture may appear bleak. But retailers who grasp the challenge and join the gathering trends could well emerge stronger and provide a brighter future for employees, customers and stakeholders alike.

What this presses for is a structural change in the industry. By challenging traditional orthodoxies, retailers can redefine the basic assumptions by understanding how to build trust with stakeholders, how to operate stores in new ways and how to structure their entire operations around new consumer expectations. With major trends accelerating, retailers have an opportunity to create a resilient architecture and a mandate to thrive in a new way.

Issues faced by the sector due to COVID-19

Within the technology and software industry, the issues that could be faced due to COVID-19 are in the following key areas:

Evolving Industry Trends and Recommendations for Business Recovery & Proliferation

Retail sector Impact and Policy Responses

COVID-19 has dramatically disrupted the retail sector, with the shock differing massively between brick-and-mortar versus online shops, essential versus non-essential stores and small versus large retailers. The mitigation measures aimed at slowing the novel coronavirus (COVID-19) pandemic taken over the past few months have directly affected the supply, demand and daily operations of the retail sector. It mainly serves final demand and thus occupies an important position in value chains both as a provider to households and as an outlet for upstream sectors. It also often complements activities in other hard-hit sectors, e.g. tourism. In addition, the retail sector is very labour intensive, so any disruptions have disproportionate employment consequences.

The sector also relies on low-wage and part-time, on-call and gig workers that are not well-covered by traditional social protection measures, which further strengthens the social consequences of the crisis in this sector. At the same time, the impact of the COVID-19 crisis on the retail sector is heterogeneous and depends on the combined effect of three characteristics. First, the effect of social distancing measures on individual retail businesses depends on whether they are deemed essential. On the one hand, most non- essential retail activities have been shut down; essential retail businesses, on the other hand, often operate in difficult conditions, with labour supply shortages, major disruptions in supply chains and working conditions, and large spikes in demand for specific items.

Second, lockdowns and social distancing measures affect retailers with physical stores more than online retailers, and may ultimately accelerate the ongoing shift from brick-and-mortar to online retailing. Third, the sector is characterised by the coexistence of businesses with strikingly different abilities to weather the crisis, linked to different liquidity positions and access to outside finance.

Five policy response measures that countries need to take now for the benefit of firms, workers and customers to shield the retail sector from the effects of the crisis and enhance its resilience are as follows:

In these exceptional crisis circumstances, there are instances where co-operation between competitors is legitimate and lawful in order to overcome disruptions, especially in essential retail supply chains.

Against this backdrop, governments need to ensure that competition remains sufficient to avoid negative impacts on consumers.

Value Chain Actions for Holistic Revival & Sustenance of the Retail Sector

Industry Outlook – The Indian Perspective

Indian retail industry has more than 15 million retailers, both small and big, traditional and modern trade. Retail industry employs 46 million people, out of which 90% are in blue collar segment. Modern trade employs more than 6 million Indians equalling to almost 12 per cent of the total Retail consumption of the country. Retail contributes to approx. 40 per cent of India’s Consumption and 10 per cent to India’s GDP. The lockdown to prevent the spread of coronavirus in the country has greatly affected retail business. With unlock 1.0 and

2.0 coming into effect, most retail stores, high streets and malls have opened up but the footfall still remains significantly low. Essential- only commodity retailers have seen a hike in demand while non- Grocery/food retailers are reporting 80 per cent to 100 per cent reduction in sales in comparison to pre-COVID sales. Even retailers of essential items are facing losses as there is a big dip in demand for non-essential items, which would bring them higher margins.

There is a shift in consumer behaviour from offline shopping to online as people who were previously averse to online buying are now being compelled to explore online due to the restrictions in force. Organizations should closely follow consumer patterns and have an adaptive business model to stay relevant. Another shift in buying behaviour, especially for millennials is that they may choose to purchase only what they really require and hence buy less than they would earlier. While big-ticket purchases will be most likely get pushed to another 3 quarters, there may be an increase in small-ticket spending like eating out, buying apparel for feel-good post lockdown. This will be more like symbolic buying.

Though there is a significant impact on the retail businesses, recovery will depend on the nature of the sector. Leadership will focus on cost efficiency than growth. Focus will be high on efficiency and achieving more with less. This means some functions may see consolidation, pilots will be put on hold and focus will be more on fundamentals. Discretionary spending like entertainment, travel, admin costs are more likely to be cut than people costs.

 

Organizations which are already highly leveraged are going to face the toughest challenges to get back on feet. Collaboration will be the key in recovery. Collaboration in areas such as compliance within stores, collaboration for revenues, for distribution & delivery and collaboration for costs.

Recovery will be dependent on the Government’s support to the sector. Retail industry is estimated to take 9-12 months to recover amid the pandemic. The demand for non-essential retail is projected to open with 40% of the value noted in pre-Covid times. The cost of business across non-essential sectors is likely to increase by 30- 35% post lockdown. In the absence of major support, as many as 20-25 per cent of retailers may be out of business or will need dire financial infusion to stay afloat. Government should focus on giving more money in the hands of the consumer, which will automatically come back in the system as consumer spends increases. Stimulus from the government can be a big push.

Reputation Challenges for the Industry

As various parts of the country proceed through a phased reopening, retailers are challenged with opening their stores in a safe and efficient manner. As pressured as they may be to reopen quickly, taking the time to understand consumers’ state of mind as they venture back out into the world will help retailers identify ways to ease consumer anxiety; maximize shopper confidence; and stand out from competitors as a safe, reliable and caring partner.

Taking the “we’re all in this together” approach could be considered harder, as it requires more thought, more cross-departmental coordination and may cost more in the long run. But it also comes with clear short-term benefits, not to mention many long-term benefits as well, including building customer loyalty and developing a reputation for a safe and friendly place to shop.

It’s also important to consider the very real possibility that many of these seemingly temporary changes to the in-store experience will become lasting changes. In this regard, the COVID pandemic may be an opportunity for the savvy retailer to distinguish itself from competitors. Indeed, a safe and trusting in-store experience with help from friendly in-store associates is an experience that online platforms cannot replicate. The Global Web Index survey shows that 56 percent of consumers surveyed say brands that can best meet their needs will resonate most long term. 38 percent further said that those companies that can demonstrate that they helped people during the pandemic will be considered most long term. Old thinking cannot be brought to bear to solve new problems and despite a host of ongoing challenges, in order to grow customer loyalty, develop new customers, and grow their reputation during COVID-19, retailers must keep the anxious customer front and centre in all of their decision making as they reopen stores.

Many organisations are having their company values put to the test when it comes to their actions in balancing the support and protection of staff and customers with income and profit. A communications strategy for employees, partners, suppliers, authorities and the public is key to a risk management plan.

Imagine clear and friendly signage throughout the store that helps shoppers know where to go and what to expect. Imagine trained and calm staff, ready to help whenever needed. Imagine a checkout process that lets customers know contactless payment is an option, even providing instructions on how to quickly setup mobile payment solutions. Retailers that commit to fully implementing these changes during the reopening process stand to see long-term benefits in addition to the more urgent short-term benefits.

Consocia Advisory, has been at the forefront of building and protecting organisational and brand reputation for several sectors.

 

We remain available to curate effective programs to pre-empt and mitigate risks through process-thinking, process-improvement and institutionalisation of best business practices, so as to anticipate risk events, minimise their impact and safeguard the overall future of the enterprise.

Cushioning the COVID impact on our clients: Consocia’s value driven services providing dynamic solutions

As COVID-19 grew into a global crisis, Consocia realized the need to support industry colleagues in dealing with the biggest challenge faced ever in recent times that of business continuity. In response to the situation, we were swift in curating an in-house crack team comprising experts in research and insights; stakeholder database generation; content; government relations and public policy.


Consocia Advisory engaged Central and State Governments besides many Districts through strategic narrative backed by data to highlight the need of the hour in the fight against the deadly pandemic. We urged immediate orders to restore Client’s ability to manufacture, warehouse, transport and distribute the client’s essential products across the country.


Presently, Consocia is working with several enterprises for business continuity as well as crisis management. In the last few weeks, we have helped opening of plants and warehouses of the Indian entity of a global disinfectant company in 6 states including in Red zones as well as
Containment areas, besides that of a renowned lighting solutions company in two states (Haryana and Karnataka) already while they are now looking for our assistance in three more states.


Within a few days of being on-boarded, through our 24×7 support, we were able to secure not only policy interventions for manufacturing but also for warehousing, logistics and distribution as well as access to staff & workers. In the process, we were able to assure the Central and State Government stakeholders that all due precautions are being taken to prevent and contain COVID 19. We even helped with internal SOPs for transportation and staff movement.


We are helping the apex body representing the Shopping Malls across India against the debilitating impact the Coronavirus pandemic has had on them. On behalf of SCAI, Consocia has crafted several interventions to draw the attention of the stakeholders and policy-makers on the plight of the industry and reinforcing reasons for Malls to be considered for resuming operations in a staggered manner, for the post-lockdown phase. At the same time, Consocia is working with the empowered Group of Ministers and Committees for COVID-19 response as well as the RBI seeking urgent financial stimulus for the sector and amplifying the initiatives through media engagement from time to time.


The upcoming editions of the dynamics of business transformation white paper series will focus on specific industries with strategies and outcome driven solutions to positively impact business outlook for business recovery and continuity in the COVID-adjusted world.


COVID-19 is a long battle for the industry. As your trusted well-wisher, our team is available to support you during these uncertain times in the areas of business continuity planning, public affairs, public policy and government relations. Contact us: reachus@consociaadvisory.com

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Technology & Software Industry Reinforcing Value Chain & Stabilizing Valuations for Business Resilience

Technology & Software Industry Reinforcing Value Chain & Stabilizing Valuations for Business Resilience

Due to the deeply interconnected market, the global technology, software and web application development industry felt the tremors from the pandemic crisis. Now when the whole world is captured in COVID and the major areas of developed industries are locked down, preventive health measures are a greater priority than the custom software development, which puts the industry in a fix.


While software indices experienced fluctuations due to nationwide shutdowns and stay-at-home orders, most select indices have returned to their pre-COVID levels, as the software industry is considered a structural winner given the need for greater digital capabilities across all industries. Infrastructure, Development and ERP software segments have seen significant stock and multiple expansion due to their offering of reliable cloud-based solutions that are in high demand by a growing remote workforce. Security software is expected to see increased spending as organizations secure endpoints and rectify vulnerabilities in the public cloud.

 

In the mid-term, it is expected that software companies with a high degree of recurring revenue, strong profit margins and critical assets around communication, collaboration, content delivery and security to experience increased demand and usage. Valuation multiples across these offerings are likely to see significant expansion. In the long term, software valuations would remain stable due to their ability to counter significant exposure to macro-sensitive events and drive cash flow by means of flexible, recurring revenue models. M&A markets are also expected to rise over the next several quarters with an increased prioritization on critical cloud infrastructure assets and other mission critical solutions, as per industry reports.

 

The novel coronavirus is still wreaking havoc in all the industries globally. The business and lives of people have been impacted due to the life-threatening effects of the coronavirus. The majority of IT and Tech giants across the world have committed to giving utmost priority to public health and have made significant changes in the employee working modes. Major tech conferences and events have been cancelled or turned into digital events in the wake of the crisis.

 

Considering the far-reaching ramifications within manufacturing, work in the corporate and technology sector has been impacted to a great extent. Many companies in the global industry landscape have either shut their factories or banned business-related traveling. Major industry events like Facebook’s F8, Google I/O, the Geneva Motor Show and the Mobile World Congress have been called off due to the outbreak. Several organizations have also encouraged their employees to work from home to prevent further outbreak of the coronavirus disease.

 

Most companies already have business continuity plans, but those may not fully address the dynamic and unpredictable variables of an outbreak like COVID-19. Typical contingency plans are intended to ensure operational effectiveness following events like natural disasters, cyber incidents and power outages, among others. They don’t generally take into account the widespread quarantines, extended school closures and added travel restrictions that may occur in the case of a global health emergency.

Issues faced by the Industry due to COVID-19

Within the technology and software industry, the issues that could be faced due to COVID-19 are in the following key areas:

Steps to counter existent issues for business resilience and continuity

Potential Impact on Technology sub-sectors

Technologies with high strategic impact potential in this decade (1/2)

Technologies with high strategic impact potential in this decade (2/2)

How Tech & ITES could revive other impacted sectors

COVID-19 has been called a once-in-a-century event. In its wake, we are likely to see a lasting shift in employee expectations, a greater capacity to respond to sudden, global disruptions, an accelerated adoption of artificial intelligence and automation, and more automated and diverse supply chains. High tech companies that invest now in creating an Elastic Digital Workforce will be much more prepared for a post-COVID-19 world.

Technology and software solution providers could help revive severely impacted industries during this crisis by supporting in scaling and adapting to the transforming business needs. Solution providers could partner with organizational leaders, in collaboration with their respective internal IT teams, to ensure that all employees have access to, as well as the ability or proper training to use remote working tools. They could push for universal adoption and model their use. Business continuity plans should account for the Elastic capacity of a digitally enabled workforce, as well as potential reductions in workforce and travel. Powered by a strong culture, organizations can set about strengthening or replacing every aspect of their technology that could support an Elastic Digital Workforce, such as distributing the right equipment to employees. Networks that connect devices to homes where workers and customers reside must be shored up, and security protections for data flowing over those networks must be assured. Acting quickly helps to weaken the impact of COVID-19 on businesses. In fact, the positive effects of a transformation to an Elastic Digital Workforce can be felt quickly with the help of effective partnerships with the technology enablers and software solution providers.

With more people working from home, a new challenge arises in the form of cybersecurity breaches and malware attacks. Cybercriminals disguised as alarming COVID-19 news reports have also been reported, targeting the global workforce with phishing emails containing malicious software. Technology sector partners could help to reassess their security threats and ensure that their client company’s firewall, antivirus protection and other security features that demand authentication are in place to mitigate malware risks.

Also, technologies such as cloud telephony and cloud-based document sharing have made communication between teams seamless and flexible. The right tools and methodologies can help businesses keep their operations seamless. Productivity need not happen only in a brick-and-mortar office.

The technology sector has already come out in strong support to work with medical practitioners and governments to contain the Coronavirus. Several start-ups too, have deployed drones and AI- based robots for high-risk tasks, such as patrolling public places, disinfecting rooms and communicating with infected patients.

Technology will continue to thrive by lending technological support during a large-scale health crisis such as COVID-19. However, innovation will be the true game-changer.

With more people working from home, a new challenge arises in the form of cybersecurity breaches and malware attacks. Cybercriminals disguised as alarming COVID-19 news reports have also been reported, targeting the global workforce with phishing emails containing malicious software. Technology sector partners could help to reassess their security threats and ensure that their client company’s firewall, antivirus protection and other security features that demand authentication are in place to mitigate malware risks.

Also, technologies such as cloud telephony and cloud-based document sharing have made communication between teams seamless and flexible. The right tools and methodologies can help businesses keep their operations seamless. Productivity need not happen only in a brick-and-mortar office.

 

The technology sector has already come out in strong support to work with medical practitioners and governments to contain the Coronavirus. Several start-ups too, have deployed drones and AI- based robots for high-risk tasks, such as patrolling public places, disinfecting rooms and communicating with infected patients.

 

Technology will continue to thrive by lending technological support during a large-scale health crisis such as COVID-19. However, innovation will be the true game-changer.

Industry Outlook – The Indian Perspective

According to the International Data Corporation (IDC), growth in global Information Technology spending is expected to reduce by 3- 4% by the end of 2020, considering the conservative scenario due to the outbreak of Coronavirus disease (COVID-19) pandemic.

However, adoption of collaborative applications, security solutions, Big Data and AI are set to see an increase in the coming days.

Observing the scenario of Indian market, a slowdown in terms of discretionary IT spending, contract renewals and new deals getting signed as enterprises recalibrate by cost structure is expected in the short term. Existing project executions have also taken a hit due to travel restrictions in place. Companies will be forced to relook at their growth targets for the rest of the year as the impact will become evident in the next few quarters. On the other hand, it has provided an opportunity to organizations to test their resilience on business continuity, remote connectivity, and security as they look at innovative ways to service their clients. Enterprises are looking at IT vendors to handhold them in the hour of crisis.

With corporates across the country implementing alternative ways of working, it is generating a parallel corporate line that demands to be connected from where they want, when they want and to who they want. While work from home is not a new concept for Indian corporates, it certainly is a testing time to see the success at this scale. Enterprises are also exploring ways of working together that leverages conversations, meetings, and assets across platforms with employees working remotely from wherever they are located to serve customers better and ensure business continuity. The adoption of collaborative applications growing at a rapid pace after the COVID-19 outbreak is evident in the current scheme of things.

As organizations are taking preventive measures to curb the spread by encouraging their workforce to connect from home, there are different sets of challenges that the IT teams within the organization are grappling with – how to secure data and assets from cyber threats. The adoption of a zero-trust policy is expected to increase, in the months ahead, as an increasing number of people connect to work from personal networks. organizations would tend to keep their VPNs and Firewalls updated with security patches in place.

IT vendors should focus on building/improving capabilities on AI and Big Data as new challenges and use cases emerge.

 

While the economic impact of the COVID-19 outbreak is evident, it has provided an opportunity for Technology & software solution vendors to become more resilient and innovative. Solution vendors should look at offering incentives on the existing contract extensions and also build conversations on business continuity and disaster recovery in the cloud. Technology players should also keep an eye on emerging uses cases in AI for disease detection, tracking, and prevention. While challenging times await hardware manufacturers, it opens an opportunity for IT vendors to handhold the clients in the hour of crisis as a trusted partner and help them sail through the situation.

Reputation Challenges for the Industry

The Covid 19 pandemic has changed the way customers behave and is forcing businesses to rethink their strategy. Technology and software companies have numerous challenges to take care of; from reviving the business to ensuring that they have runway for the next 9-12 months in case the growth of the economy is slow.

Covid 19 has accelerated a lot of the key technology, business, professional and work / life related trends that have emerged. At the same time, it has exacerbated risks and threats that companies face from cyber compromises. The reputational risk profile of each business is different depending on variables including sector, size of business and varying degree of internal and external threats including the extent to which, the reliance on technology plays a role in the business.

Most cyber security or risk & crisis management plans are not formulated with the prospect that all staff would be working from home and that an incident could come at a time when the infrastructure of an IT system was overloaded and vulnerable. Many organisations have been forced to effect changes at great speed, adopting a roll out programme that otherwise might have taken months if not years to achieve, with the inevitable risk that security is compromised and there are gaps in its systems which play to third party threats. At the same time, external threats such as phishing and social engineering are on the increase as fraudsters seek to take advantage of any vulnerability in a remote working system and preying on individuals’ personal vulnerabilities.

When responding to the challenges posed by COVID-19, technology companies must be mindful that, what they do now will impact how they are viewed in the future. With supply chains under huge stress at the moment, particularly where imported products are concerned, many businesses are struggling to comply with their obligations and either supply customers or honour contractual obligations made pre- lockdown. Where this impacts consumers, disagreements can quickly escalate to a situation where customers become frustrated with the business’s inability to supply which in turn can lead to cancelled orders and negative online reviews or comments on social media, garnering unwanted publicity and influencing other consumers away from a brand towards its competitors.

Many organisations are having their company values put to the test when it comes to their actions in balancing the support and protection of staff and customers with income and profit. A communications strategy for employees, partners, suppliers, authorities and the public is key to a risk management plan.

Consocia Advisory, has been at the forefront of building and protecting organisational and brand reputation for several sectors.

 

We remain available to curate effective programs to pre-empt and mitigate risks through process-thinking, process-improvement and institutionalisation of best business practices, so as to anticipate risk events, minimise their impact and safeguard the overall future of the enterprise.

Cushioning the COVID impact on our clients: Consocia’s value driven services providing dynamic solutions

As COVID-19 grew into a global crisis, Consocia realized the need to support industry colleagues in dealing with the biggest challenge faced ever in recent times that of business continuity. In response to the situation, we were swift in curating an in-house crack team comprising experts in research and insights; stakeholder database generation; content; government relations and public policy.


Consocia Advisory engaged Central and State Governments besides many Districts through strategic narrative backed by data to highlight the need of the hour in the fight against the deadly pandemic. We urged immediate orders to restore Client’s ability to manufacture, warehouse, transport and distribute the client’s essential products across the country.


Presently, Consocia is working with several enterprises for business continuity as well as crisis management. In the last few weeks, we have helped opening of plants and warehouses of the Indian entity of a global disinfectant company in 6 states including in Red zones as well as
Containment areas, besides that of a renowned lighting solutions company in two states (Haryana and Karnataka) already while they are now looking for our assistance in three more states.


Within a few days of being on-boarded, through our 24×7 support, we were able to secure not only policy interventions for manufacturing but also for warehousing, logistics and distribution as well as access to staff & workers. In the process, we were able to assure the Central and State Government stakeholders that all due precautions are being taken to prevent and contain COVID 19. We even helped with internal SOPs for transportation and staff movement.


We are helping the apex body representing the Shopping Malls across India against the debilitating impact the Coronavirus pandemic has had on them. On behalf of SCAI, Consocia has crafted several interventions to draw the attention of the stakeholders and policy-makers on the plight of the industry and reinforcing reasons for Malls to be considered for resuming operations in a staggered manner, for the post-lockdown phase. At the same time, Consocia is working with the empowered Group of Ministers and Committees for COVID-19 response as well as the RBI seeking urgent financial stimulus for the sector and amplifying the initiatives through media engagement from time to time.


The upcoming editions of the dynamics of business transformation white paper series will focus on specific industries with strategies and outcome driven solutions to positively impact business outlook for business recovery and continuity in the COVID-adjusted world.


COVID-19 is a long battle for the industry. As your trusted well-wisher, our team is available to support you during these uncertain times in the areas of business continuity planning, public affairs, public policy and government relations. Contact us: reachus@consociaadvisory.com

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Banking & Financial Services Industry Reviving Economic Confidence through Policy Relief & Operational Transformation

Banking & Financial Services Industry Reviving Economic Confidence through Policy Relief & Operational Transformation

Once the World Health Organization declared the outbreak of the COVID-19 pandemic, uncertainty and instability among financial service entities became evident. The global financial system is slowly evolving from an initial period of extreme stress, primarily due to government level efforts to stimulate the economy, central banks’ steps towards addressing market disruptions and the resilience of financial institutions. While the initial struggle due to the financial crisis may have eased, firms and policy-makers remain concerned about a range of risks that could prove to be a threat to financial stability and economic recovery.

All stakeholders have consistently highlighted the degree of uncertainty prevalent across financial markets and institutions. There is concern about how badly the virus will affect different countries, duration of containment measures in different markets, how effective policy will be at mitigating lost activity, and how households and firms will change their behaviour in the medium term.

While financial system resilience, fiscal support, regulatory flexibility and liquidity provision to date have helped ensure that the financial system is supportive of economic recovery, a more intensive slowdown may present new risks to the financial system. Thus, while the initial phase of the crisis has eased, participants are keenly aware that there may be greater turmoil affecting the financial system as the economic fallout continues, potentially precipitating a financial crisis down the line. The economic slowdown due to COVID-19 will impact demand for loans which could dent profits for NBFCs among the other financial Service institutions. One view of a global scenario would involve a severe protracted recession in advanced economies leading to a credit crunch, as banks face greater credit losses than their balance sheets can withstand, despite ongoing central bank support which, in turn, would deepen the recession. While this scenario is not seen as likely, equity market investors should be more cognizant of downside risks.

The economic and financial crisis in emerging markets and developing economies could be worse than in advanced economies. Both private-sector participants and policymakers remain concerned about the range of risks presented by weaknesses in many emerging markets and developing countries.

While some emerging markets are better positioned to withstand and address these shocks, many are seeking various forms of liquidity support from advanced economies. There has been record demand for emergency programmes from the International Monetary Fund (IMF) and multilateral development banks, which these institutions have met by expanding the size and structure of the support offered.

Despite the challenging situation, this is also an opportunity for financial institutions to show that they understand their customers’ plight and are committed to supporting them through the crisis. The upside of these difficult circumstances is that they can be used to build stronger, enduring, trust-based relationships with customers.

Short-term liquidity is critical in ensuring confidence in the market forces at play in servicing finance, capital and debt as businesses start adjusting to the rapidly evolving operating environment.

Impact of COVID-19 on the Industry

Within Banking and Financial service sector companies, the short- term impacts in four key areas are:

Risks associated with the above impact areas include market risk associated with a sharp drop in interest rates and increased volatility in securities and FX price, counterparty credit risk with the current market events affecting counterparty credit profiles, non-financial risks such as conduct risk, culture and model risk, third party risk and cyber risk, risk governance, dividends and stock buybacks along with risks in credit ratings with market induced negative environment impacting banks and stakeholders, especially in the high-yield grade.

Operational resilience in crisis readiness, communications, monitoring and review, flexibility, quality and productivity is critical to overcome the crisis and be ready to address future crises.

Impact Assessment and Recommendations (1/2)

Impact Assessment and Recommendations (2/2)

Policy Relief for Reviving Economic Confidence

Flattening the curve of firm mortality must be the top policy priority, and governments need to expand the size and scope of support programmes over time. To prevent short-term liquidity problems from becoming solvency issues, governments must remain vigilant about the availability of funds for SMEs and larger firms as the crisis persists. Moreover, given that SMEs have short windows of cash on hand, programmes must be designed to ensure rapid disbursement of funds through simple, all-digital channels. As the economic crisis unfolds, it will be necessary for the government to provide support to so-far-excluded companies, such as middle-market firms lacking access to capital markets.

Governments, including regulators and central banks, must continue to coordinate policy on a global level to help maintain financial stability. Within countries, policy guidance must be clear and consistent across regulatory agencies. While regulatory policy within countries has generally moved in the same direction, in certain areas, regulators and supervisors are not sufficiently harmonized in their approach. Policy-makers should ensure that regulatory and supervisory changes are coordinated across the relevant domestic institutions to prevent confusion from limiting the effectiveness of policy action.

Policy-makers must ensure that the financial system remains capable of safely meeting the public’s need for financial services through digital channels. Given the need to quickly disburse

 

fiscal support to households and small businesses – in addition to the broader need to deliver financial services at a time when populations are being asked to socially distance – financial institutions must have leading digital capabilities. However, the crisis has so far exposed the variation in digital maturity among institutions.

In the short term, policy-makers should leverage the strengths of the entire financial system, including FinTech, to rapidly deliver support to small businesses and households. Moving forward, banks can explore partnerships with FinTech to quickly and safely introduce new products. Policy-makers should also encourage banks to continue to explore other technologies and partnerships that enable them to better serve digital-first customers and to operate in a more agile fashion. Given increased reliance on e-commerce and contactless payments, policy-makers should continue to explore technologies that enable fast, inexpensive, and ubiquitous payments through a resilient payment system.

Advanced economies may need to further expand the support offered to emerging markets and developing economies. Advanced economies have moved to increase their support to emerging markets and developing countries through both bilateral and multilateral channels; but, as the crisis in these countries unfolds, additional assistance may be required. Advanced economy policy- makers, as well as investors and financial institutions, must continue to develop and expand programmes to support these countries.

Digital Acceleration towards a Disruptive Operational Model

Industry Outlook – The Indian Perspective

Like any previous episode of economic slowdown, the most immediate fall-out of this pandemic was felt on the Financial Services sector. This is the reason why the Reserve Bank of India (RBI) came out with a Rs 3.74 trillion of support that enveloped most sectors. Additionally, the RBI cut the interest rate at which it lends to banks by 75 basis points. The other key measure announced was the forbearance on payment of instalments on all sorts of loans including farm loans. This will apply to all loans offered by regional rural banks, small finance banks and local area banks, co-operative banks, scheduled banks, and NBFCs (including housing finance companies and micro-finance institutions).

The measures are meant to ease disruptions in fund flows to real sectors of economy, avoid working capital shortage for businesses and stem panic withdrawals by households from banks and nonbanking deposit-taking institutions. The confidence building measures have also had a positive impact on outflows of capital by foreign institutional investors (FIIs) as well as drying up of external commercial borrowings. The move to reset working capital loans will particularly provide support to SME financing, averting significant distortion of supply chains.

Despite the RBI package, Indian banking and financial sector faces tough challenges in the coming months. Some sectors of economy such as travel, hospitality and transportation & logistics are badly hit. Credit exposure of commercial banks and nonbanking financial companies to those sectors may gradually turn into bad assets in the coming days.

The assessment of COVID-19-related dislocation in Indian financial sector can be studied from two angles: firstly, the channels that would perpetuate the risks already built up over the past few months, and secondly, the new challenges emanating from global economic shocks in the form of falling foreign direct investment (FDIs) and collapse of export revenues, remittance flows, etc.

Following the first strand, despite noticeable improvement in banking segment in terms of capital adequacy, liquidity and asset quality after seven years of deterioration, Indian banking is not entirely free from challenges. Overhang of NPAs and low credit growth by scheduled commercial banking indicates build up of risks in the system which may deteriorate further if cut in aggregate demand and business activity prolongs. The second channel of risks for Indian banking and financial sector is the contagion from faster transmission of global shocks.

All these developments would help aid the slowdown to worsen in a synchronized fashion thereby impacting commercial banking. Higher allocation of government expenditure towards fighting corona virus manifested in the form of medical supplies and health infrastructure would cut or postpone capital expenditure in other sectors to a great extent. In order to sustain efforts directed towards COVID-19, Indian financial sector needs to be prepared for tougher times in the coming days.

Reputation Challenges for the Industry

These are testing times and banks will need to quickly initiate measures to ensure seamless delivery of services to customers with minimal disruptions. Solutions that provide rapid or quick resolutions to the problems created by the COVID-19 crisis are the need of the hour. In most scenarios, short and crisp interventions must be initiated to carefully tread this slippery road. Navigating the COVID- 19 landscape will pose tough challenges to financial institutions, and collaborating with a trusted service provider is proving to be the way forward.

Reputational risks and opportunities have increased manifolds triggered by the uncertainties of Covid-19 pandemic for the BFSI enterprises.

There is an urgent need to consider the multiple near-, short-, and medium-term operational, financial, risk, and regulatory compliance implications. The situation has presented many opportunities to support market and economic activity and to facilitate a quick return to stability. If banks and capital markets firms respond well to these unprecedented challenges, they will not only help society, but also increase trust and the reputation of the banking industry in the long run.

cost of reputation risk is difficult, in part because it can arise as a consequence of other operational risks. A large number of firms especially the micro, small and medium businesses and also self- employed individuals are likely to default on their bank and NBFC loans. With these external challenges, Financial organisations ought to guard against reputation risks by a sizeable investment in process thinking and cultural improvements as they can result in huge losses to the institutions. Institutions should view risk management as an institutionalisation of best business practices, so as to anticipate risk events, minimise their impact and profit from it.

Areas of focus in reputation management could stem out of the existent operational capabilities and shortcomings, digital divide, customer demography ease of access and quality of service provided. There is a clear divide between established and emerging markets in the perceptions of digital versus traditional financial service providers where digital transformation has increased financial inclusion, one third of consumers believe digital providers are more trustworthy. In the digital age, data security and honesty are also leading concerns when engaging with financial services companies. It is imperative to create a culture of treating reputation risk seriously through integrity and collaboration.

Consocia Advisory, has been at the forefront of building and protecting organisational and brand reputation for several sectors.

 

We remain available to curate effective programs to pre-empt and mitigate risks through process-thinking, process-improvement and institutionalisation of best business practices, so as to anticipate risk events, minimise their impact and safeguard the overall future of the enterprise.

Cushioning the COVID impact on our clients: Consocia’s value driven services providing dynamic solutions

As COVID-19 grew into a global crisis, Consocia realized the need to support industry colleagues in dealing with the biggest challenge faced ever in recent times that of business continuity. In response to the situation, we were swift in curating an in-house crack team comprising experts in research and insights; stakeholder database generation; content; government relations and public policy.


Consocia Advisory engaged Central and State Governments besides many Districts through strategic narrative backed by data to highlight the need of the hour in the fight against the deadly pandemic. We urged immediate orders to restore Client’s ability to manufacture, warehouse, transport and distribute the client’s essential products across the country.


Presently, Consocia is working with several enterprises for business continuity as well as crisis management. In the last few weeks, we have helped opening of plants and warehouses of the Indian entity of a global disinfectant company in 6 states including in Red zones as well as
Containment areas, besides that of a renowned lighting solutions company in two states (Haryana and Karnataka) already while they are now looking for our assistance in three more states.


Within a few days of being on-boarded, through our 24×7 support, we were able to secure not only policy interventions for manufacturing but also for warehousing, logistics and distribution as well as access to staff & workers. In the process, we were able to assure the Central and State Government stakeholders that all due precautions are being taken to prevent and contain COVID 19. We even helped with internal SOPs for transportation and staff movement.


We are helping the apex body representing the Shopping Malls across India against the debilitating impact the Coronavirus pandemic has had on them. On behalf of SCAI, Consocia has crafted several interventions to draw the attention of the stakeholders and policy-makers on the plight of the industry and reinforcing reasons for Malls to be considered for resuming operations in a staggered manner, for the post-lockdown phase. At the same time, Consocia is working with the empowered Group of Ministers and Committees for COVID-19 response as well as the RBI seeking urgent financial stimulus for the sector and amplifying the initiatives through media engagement from time to time.


The upcoming editions of the dynamics of business transformation white paper series will focus on specific industries with strategies and outcome driven solutions to positively impact business outlook for business recovery and continuity in the COVID-adjusted world.


COVID-19 is a long battle for the industry. As your trusted well-wisher, our team is available to support you during these uncertain times in the areas of business continuity planning, public affairs, public policy and government relations. Contact us: reachus@consociaadvisory.com

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COVID-19 Response-Driven Business Transformation for Pharmaceutical and Healthcare Industry

COVID-19 Response-Driven Business Transformation for Pharmaceutical and Healthcare Industry

The COVID-19 crisis is predominantly a humanitarian challenge, impacting the world at large. This eclectic reality is compass to the perspectives to follow. At the time of writing, the total COVID cases across the globe exceeded 5.8 million, increasing at an immoderate pace. Healthcare professionals and front-line public health workers are battling the pandemic, while putting their own lives at risk. With the pace of rise in COVID cases, healthcare infrastructure overload is the key area of concern.

Governments have implemented strict social distancing protocols among other restrictions to control the growth in the number of cases. Industries and Governments are trying to address the challenges arising from this crisis by working together to help the direct and indirect victims this crisis has brought about, all while hoping, coordinating and searching for an effective treatment or vaccine that would be the most crucial aspect of an impactful exit strategy. Until then, scaled-up testing is the go-to protocol for clarity on the intensity and spread of the virus. The pharmaceutical and healthcare industry, thereby becomes the most crucial stakeholder to pull the world out of the COVID-19 pandemic crisis.

The global pharmaceutical and healthcare industry stakeholders have been working together with unprecedented coordination leveraging global expertise towards phased testing of antibodies and vaccines. The World Economic Forum has reported that the phase-wise testing is progressing at an unparalleled pace, with process reports and feedbacks which earlier took weeks to process, getting responses over weekends and within days.

The pandemic has brought out the lack of resilience in the health systems around the globe and how they were inadequately prepared to deal with multiple health challenges. The most important lesson that it taught the world was to strengthen its healthcare infrastructure. The disruptive challenges caused by this pandemic for the pharmaceutical and healthcare industry are manifold.

 

On a global scale, pharmaceutical and medical product supply chains are struggling to keep pace with the rapid spread of the COVID-19 virus. The disruptive effects of COVID-19 have placed enormous strain on the global supply of medical products, increasing the risk of shortages.

 

Although production across various industries and regions in China have been gradually resuming since late February, global pharmaceutical and medical device manufacturers, who heavily source directly and indirectly from China, are now exposed to high risks in supply shortages over the upcoming months due to limited operational capacity. India, which is a major exporter of pharmaceutical products to several countries including the U.S, is also constrained. Despite the retraction on the ban imposed on the export of hydroxychloroquine, the biggest challenge remains to be the supply chain disruptions and operational difficulties in scaling up production to meet the surge in demand.

 

Tackling of the COVID-19 crisis is likely to have long term global implications. A country like India with certain strong basic aspects like a well-distributed pharmaceutical industry can develop its own models of nation-building by combining public health requirements and economy for national development.

Impact Assessment of COVID-19 on the Industry

With the number of cases on the rise, the society at large has been more attentive to the healthcare and pharmaceutical industries, which will impose both positive and negative consequences across different sub-sectors. In the short term, there will be a variety of impacts on pharma companies, healthcare institutions, pharmaceutical distribution and health insurance. In the medium to long-term, the impact on the healthcare and pharmaceutical industries are relatively positive. These are as follows:

For pharma companies, positive impact areas include the increasing demand for drugs for prevention and treatment of coronavirus as well as the unprecedented attention for vaccine development.

 

The aspects of negative impact for the pharma industry are decreasing sales for chronic disease drugs and reduced promotion of innovative drugs with focus stagnant on COVID-19 response now. New drug launches could also be impacted because of this.

 

For healthcare providers and institutions, positive impact areas are accelerated development of Internet of Medical Things (IOMT), faster development of hierarchical medical systems with the involvement of community medical institutes. The prevalent demand surge could also provide opportunities for more third-party testing centres to alleviate resource shortage in healthcare institutions. The downside for healthcare institutes due to COVID-19 is the decrease in the footfall of patients seeking elective or non-emergency treatments. This could contribute to significant operational losses.

 

Within pharmaceutical distribution and retail, favourable winds are imminent for online pharmacies with increased user base for app based prescription drug delivery services.

 

Facing this emergency, Government regulators, medical educational universities and institutions along with pharmaceutical and medical device manufacturers have responded and adjusted quickly, by deconstructing the genomic sequence of the virus, manufacturing testing and diagnosis kits, screening for potential drugs as well as conducting clinical research, publishing procedures, policies and technical guidance on clinical trials. This is testimony to the impressive progress towards collaborative innovation in medicine.

Healthcare and Pharmaceutical Industry Impact in the Short term and Requirements in the Long-Term

Strategy towards Business Transformation

Strategy towards Business TransformationA critical aspect of moving ahead and envisaging a conducive environment for business transformation is monitoring & establishing the ability to respond. The industry will have to bring about the resurgence together by building on the trust and confidence of both its community and allies. This can be facilitated by steps towards protecting their people & communicating frequently to ensure that the staff understands what to do and is aligned to the top management vision for recovery and transformation.

 

Organizations need to assess the extent of short-term exposure & key dependencies across the organization and rapidly set-up robust response team structures, governance & processes to ensure consistency and seal gaps and delay in communication. The Organization needs to establish decision authority for response team leadership & link to board of management

 

It is important to ensure the latest sources of facts & intelligence that can be disseminated to the rest of an organization on a daily basis while working with global & local health authorities, regulators and stakeholders to stay compliant to health advisories and standard protocols. There is the need to design immediate stabilization initiatives and a proportionate response mechanism while reaching out to peer organizations and sharing best practices within the industry.

 

Another important criteria to evaluate for business transformation is to understand the risk on the business and quantify exposures.

 

The organization should identify commercial and business exposures and implications in the second half of 2020 and beyond with respect to business operations reviews, supply chain and operational constraints. Wherever possible, quantify the potential implications on business and financials. This will then lead to developing the approach to track and report risks on impact including operational issues, strategic perspectives & financial resilience.

 

The organization should be able to develop a resiliency planwith focus on an updated demand planning, operating model & network optimization. Further, it would be beneficial to periodically stress test the adopted operational, strategic & financial resiliency measures.

 

The third key aspect to incorporate within the transformation plan is to consider the long-term commercial implications for the industry at large and the business entity in particular. The organizations would do well to revisit the existing business models to identify & capture opportunities to mitigate & differentiate business through products, integrating and coordinating between plant sites among others. If not committed yet, now is the time to invest in digital and build digital tools to augment offline process and enable large scale solutions

 

Going forward, greater coordination will be a requisite across the ecosystem while improve organizational coordination internally as well as with key health authorities and stakeholders to develop coordination plans inclusively. Businesses need to evaluate supply chain readiness to enhance supply chain measures.

Product Management Capability Evaluation Model for Pharmaceuticals and Medical Device Manufacturers

Industry Outlook –The Indian Perspective

The Indian generic pharmaceutical sector has always been a reliable source for cheap medicines for the world. But the outbreak has created several shortcomings for the industry because of shortage of Active Pharmaceutical Ingredient (API) supply. What the industry can immediately focus is on manufacturing that can be done with available raw materials and linking with the Indian supply chain instead of waiting for the revival of the global value chain.

 

The industry should form a consultation group of public health experts and medical personnel who can identify and prioritise requirements in the case of the outbreak of the epidemic and calibrate the production.

 

The urgent action required is to boost medical supplies. These include sanitizers, disinfectants, face masks, surgical gloves, protective gears for health personnel, test kits, infrared thermometers, scanners, ventilators, inhalers and so on. Some of these are high end technology but most require low level of technology only and can be easily manufactured. What could be done is that apart from the conventional pharmaceutical and medical equipment industry, other sectors of industry can join forces for ramped up manufacturing to meet the surging demand in the light of reduced demand for luxury products, thereby buffering some economic impact on themselves as well.

 

MSME is a sector that needs high focus in this endeavour of twining public health and economic development. This crisis situation could be made into an opportunity for MSMEs. They need to be given special incentives for producing low end technology items in medical and sanitary equipment like masks, gloves, cottons, etc. That will revive the stagnant sector.

 

The healthcare sector is facing a downturn compared to the pre-COVID state. Despite more than 60% share of bed capacity, the private healthcare sector’s financial performance was severely constrained. Stipulation of lockdown measures has further constrained the financial performance by March-end causing providers to make operational losses. If the situation persists, providers will face severe liquidity crisis with cash balance likely to cover operating losses only for 1-2 months. Operating losses are estimated to the tune of Rs 4,500 crore for a month and Rs 13,400 crore for a quarter if revenues are at 50% considering occupancy of 35%.

 

Liquidity infusion, indirect and direct tax benefits and fixed cost subsidies are among the key recommendations for financial relief to the sector through short-term interest free/ concessional interest loans and immediate release of complete dues locked with Central and State government authorities. It is indeed a relief that the government has taken steps to implement these measures.

It is necessary to develop the medical education models that are tuned to not only the public health needs but are also suited to the levels of pharmaceutical industry in the country, so that they become co-players in strategic national development.

Cushioning the COVID impact on our clients: Consocia’s value driven services providing dynamic solutions

As COVID-19 grew into a global crisis, Consocia realized the need to support industry colleagues in dealing with the biggest challenge faced ever in recent times that of business continuity. In response to the situation, we were swift in curating an in-house crack team comprising experts in research and insights; stakeholder database generation; content; government relations and public policy.


Consocia Advisory engaged Central and State Governments besides many Districts through strategic narrative backed by data to highlight the need of the hour in the fight against the deadly pandemic. We urged immediate orders to restore Client’s ability to manufacture, warehouse, transport and distribute the client’s essential products across the country.


Presently, Consocia is working with several enterprises for business continuity as well as crisis management. In the last few weeks, we have helped opening of plants and warehouses of the Indian entity of a global disinfectant company in 6 states including in Red zones as well as
Containment areas, besides that of a renowned lighting solutions company in two states (Haryana and Karnataka) already while they are now looking for our assistance in three more states.


Within a few days of being on-boarded, through our 24×7 support, we were able to secure not only policy interventions for manufacturing but also for warehousing, logistics and distribution as well as access to staff & workers. In the process, we were able to assure the Central and State Government stakeholders that all due precautions are being taken to prevent and contain COVID 19. We even helped with internal SOPs for transportation and staff movement.


We are helping the apex body representing the Shopping Malls across India against the debilitating impact the Coronavirus pandemic has had on them. On behalf of SCAI, Consocia has crafted several interventions to draw the attention of the stakeholders and policy-makers on the plight of the industry and reinforcing reasons for Malls to be considered for resuming operations in a staggered manner, for the post-lockdown phase. At the same time, Consocia is working with the empowered Group of Ministers and Committees for COVID-19 response as well as the RBI seeking urgent financial stimulus for the sector and amplifying the initiatives through media engagement from time to time.


The upcoming editions of the dynamics of business transformation white paper series will focus on specific industries with strategies and outcome driven solutions to positively impact business outlook for business recovery and continuity in the COVID-adjusted world.


COVID-19 is a long battle for the industry. As your trusted well-wisher, our team is available to support you during these uncertain times in the areas of business continuity planning, public affairs, public policy and government relations. Contact us: reachus@consociaadvisory.com

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Business Recovery and Continuity in the COVID-Adjusted World

Business Recovery and Continuity in the COVID-Adjusted World

The challenge being posed by COVID-19 and the repercussions it’s creating, has continued to impact global stakeholders significantly. Societies, irrespective of geopolitical differences have suffered significant losses, emotionally and economically. It is a crisis that has profound implications for companies globally. From the complete or partial shutdown of factories, to supply chain disruptions, to labour shortages to cash flow stress, companies are feeling the business and financial shock of the COVID-19 outbreak. However, effective interventions are starting to show promising outcomes.
Impact on sectors and business depends on intensity and shape of the health and economic recovery, especially in an extended fight phase

To prudently navigate the COVID-19 crisis, particularly putting into foresight, the possibility of an extended ‘fight’ against the virus, the phase requires integrated action by governments and business leaders

Companies have to be predictive and proactive in their decisionmaking to ensure continuity and build resilience.The initial response to the immediate response mechanism of the pandemic needs to evolve into business continuity strategies. Innovative intervention mechanisms are required to ensure compliance to existing protocols of social distancing, restricted services, hygiene etc. while embracing newfound opportunities and avenues to ensure growth.


An integrated perspective on health/medical progression, governmental responses, societal reactions, and economic implications is required to asses the conditions effectively.

An integrated perspective: Navigating the COVID crisis

Since the beginning of the COVID-19 outbreak, the global productbased systems have been challenged by factory shutdowns, demand surges for essential goods, stockpiling and panic-buying, along with shifting consumer preferences (e.g. online over physical). This has raised new and unprecedented questions on the level of resilience of global value chains and the overall approach to manufacturing.


Adjusting and overcoming these disruptions require new forms of collaboration across companies and industries to ensure business continuity while protecting employees and improving resilience of delivery channels for the future.

 

As global value chains have traditionally been optimized for costcompetitiveness reasons, the COVID-19 pandemic proves that companies need to reorient towards new approaches, which are prone to risk competitiveness. Additionally, they need to build new strategies in collaboration with governments to be able to adapt and respond to future shocks.


The lessons that the implications of COVID-19 has made the business communities realize are about having an integrated perspective in overcoming a crisis through a phased approach.

 

Three phases that  ncompass the society’s navigation of the fallout caused by this pandemic are: control, contain and carry on.

The initial phase after a pandemic outbreak is control, where the goal is to urgently limit number of confirmed cases, especially critical care, social distancing and partial business closures outside a few, lead to economic recession with large employment impact. This entails the control phase.

 

In the second phase, where the global businesses are moving towards at this point in time is contain, where businesses are finding paths to collectively fight the virus, restart the economy, and support society in balancing lives and livelihood. Moderate economic activity,
some business reopening and social distancing at a sustainable level are key observations on the existent scenario. The world is transitioning towards phase 2 of containment currently.


The third phase of carrying on would be dependant on several aspects including vaccine/ anti-body development along with effective stimulus provided at the Governmental level. Disease controlled through vaccine/cure/ herd immunity and treatment within sustainable medical capacities possible. Reactivated economy withtrong business rebound and job growth, social restrictions limited or completely suspended. The transition delay from phase 2 to phase 3 will have to be carefully evaluated based on the factors mentioned above.

 

The critical factors for effective progression towards phase 3 are institutional capabilities in disease progression, health care system capacity, and response; Government policies and economic stimulus; business & public engagement and response.

Key aspects that will structure the economic outcomes during and post the pandemic crisis

Being prepared for post-pandemic recovery

Businesses can consider the phased approach of control, contain and carry on as analogous to short-term, medium term and long term outlook to recognize and address topics that are upsetting their current business model. There is a requirement for them to advance long haul strategies with plans of action cultivating virtual collaborations across the value chain, a lean and coordinated technological intervention modules and to create enterprises with
digital flexibility and cyber resilience.

 

For every business, the key strategic priority to navigate the crisis would be effective workforce management, with a people first mentality. An impactful workforce transformation plan that aims to create a highly adaptive disruptor culture capable of adapting to constant change enabled through communication across all levels through virtual platforms, employee assistance programs and leveraging the opportunity to re-skill and up-skill the team will be crucial in future-proofing the work force.


Product development and distribution will adopt a new normal of customer preferences amidst protocols of social distancing, work from home, accessing data online, cancellation of large events and general business losses. Redesigning business models and distribution channels should be aligned to customer needs as well as impact of external environment. Product innovation will come to the fore replacing the traditional long-term product life-cycle strategy.

 

Product distribution strategies will also have to factor in its approach to enable virtual and contactless sales. Businesses will have to leverage the growing customer awareness and the accelerated rate of digital adoption.

 

Capitalizing on technology for process excellence will be the pillar of strength amidst restricted access to physical contact. This is where processes can be strengthened to ensure digital interaction is a strength for the business through seamless digital servicing capabilities and encouraging self-service through an easy customer user interface for service queries and retain brand loyalty and customer satisfaction through an agile customer relationship management system with intelligent automation. Heavy investment in technology and process automation will be value-driven investments for business recovery and continuity.


Risk management will be crucial as businesses get ready to recover from the fallout caused by the pandemic. With additional reliance on technology interfaces, the cyber risks associated with it also emerge. Challenges to data security and privacy looms large. A strong information security policy and architecture will help overcome this risk, in addition to ramping up organizational security. To tackle regulatory risks, Government authorities should be reached
out through proper channels, to ensure business stimulus packages and to avoid non-compliance as well as delays in financial disclosures. It is the ideal time for business owners and entrepreneurs to learn from the crisis and develop a strong business model.

Sentimental analysis backed sectoral outlook

Rebooting the economy: The Indian perspective

The Prime Minister has announced the “Atmanirbhar Bharat” economic stimulus package to the tune of INR 20 Lakh Crores, effectively setting aside 10% of the Country’s GDP to reboot the Country’s demand-consumption ratio with focus on the 5 Pillars Of India’s Self-Reliance with an economy with potential for quantum jump, infrastructure, tech-driven system, demography and demand based intelligence-driven supply system. The strategy of the economic reboot will have to be driven by promoting local products facilitated by significant reforms around land, revenue and ease of doing business.


According to the International Monetary Fund (IMF), many economies may face negative per capita income growth in 2020 due to the Coronavirus pandemic. In its recent forecast, the World Trade Organisation (WTO) indicated a clear fall in world trade between 13 per cent and 32 per cent in 2020, considerably the highest fall since the Great Depression of the 1930s. The IMF has also reduced growth forecast for the Indian economy, projecting a GDP growth of 1.9 per cent in 2020. In its recent World Economic Outlook, the IMF does project a rebound in the growth of the Indian economy in 2021, at a rate of 7.4 per cent. This is reassuring data that brings hope.


Although India has been successful till date in containing the spread of the virus, the COVID-19 pandemic has disrupted normal economic activity and life in the country. India’s trade has been severely disrupted. Currently, businesses are very vulnerable to the unfolding economic crisis. People have been facing a sudden loss in their incomes, causing a major drop in demand. To rescue the economy, India has announced a range of fiscal and monetary stimulus packages. The major aim of this stimulus is similar to the conventional Keynesian prescription of ‘pump-priming’, whereby
income transfers to people having higher marginal propensity to spend can boost up the declining demand.

 

In driving the country’s economic recovery, the key directions at the Governmental level entail global and regional cooperation, structural reforms across sectors aided by fiscal and monetary stimulus. People at the moment are locked in homes, and hence, are unable to spend or earn. First and foremost step towards the reboot is to restore confidence in the economic system and the governance. Improved and coordinated responses from
stakeholders are critical at this point.

 

The country needs to continue with the fiscal stimulus packages for sometime at least till the economy rebounds. Labour-intensive sectors require focus. India will have to route the incentives to better support agriculture, MSMEs, logistics and transportation, exports and imports, health etc. Here, international cooperation may help countries to minimise the overlaps by sharing information, encourage smart implementation and avoid the pro-cyclical stimulus impacted by market fluctuations. Promoting smart implementation of packages may generate higher dividends to the economy.

Prospective strategies for India towards the goal of self-reliance and geopolitical cooperation

Conclusion

Structural reforms are inevitable at this point. Higher spending in food security, fighting poverty, technology and innovation, strengthening international trade, nutrition and livelihoods, public health and capital flow, smart and green logistics, enhancing the quality of human capital and education standards, strengthening institutions and governance needs to be areas of focus.


Countries have to invest more in healthcare, both management and facilities. New social and behavioural norms – “social distancing”, “wearing masks”, “maintaining hygiene”, etc., are the new normal, and we have to adjust with such new norms amid the pandemic. India has an important role to play in the post Covid-19 world, and it is immensely useful for the country to stay engaged in such global discussions. While there are substantial challenges and concerns, India must resist the temptation for quick fixes that do not address
the underlying concerns and avoid permanent solution. Structural reforms are must and should continue to focus on strengthening the country’s economic fundamentals—only then can they contribute meaningfully towards a more robust and resilient Indian economy.


But, the concerted action by the countries in the world will surely turn the tide. India has great opportunities in this context, especially looking at the composition of global value chains in the world trade. Overall, COVID-19 has brought untold misery to a large section of low income individuals across the globe. The uncertainty about future looms heavily in the mind of both consumers and producers.

The MSME sector, especially in our competitive engineering goods manufacturing, provides great prospects for employment and growth in the economy. The need of the hour is to carefully chalk out plans for the future resurgence of economic activity in the nation.


For the next few months, management of the economy and the management of public health need to go hand in hand. While India needs to learn from other countries, at the same time, it has substantial scope for learning from within India. In the management of the Corona crisis, it also depended on how state governments managed the crisis. Similar approach is needed for management of the economy as well. Strategies cannot be fixed for the entire country for all times to come. They need to be dynamic and flexible. States need to be empowered, be it through allowing them to go for fiscal expansion or deciding on the level of restrictions that they would like to impose in different areas or the exemptions that might be allowed. The Centre needs to support them with information and technical advice, logistics, material support, and financial assistance.


However, the Centre needs to be more concerned about the exports as the failure to revive it quickly can have serious long-term impacts. A comprehensive strategy addressing the impact of the current crisis may put the Indian economy back on a sustained growth path and strengthen the country’s trade and foreign policy.


The need of the hour therefore, is to evolve new and innovative mechanisms to overcome the economic hardships caused by the pandemic.

Cushioning the COVID impact on our clients: Consocia’s value driven services providing dynamic solutions

As COVID-19 grew into a global crisis, Consocia realized the need to support industry colleagues in dealing with the biggest challenge faced ever in recent times that of business continuity. In response to the situation, we were swift in curating an in-house crack team comprising experts in research and insights; stakeholder database generation; content; government relations and public policy.


Consocia Advisory engaged Central and State Governments besides many Districts through strategic narrative backed by data to highlight the need of the hour in the fight against the deadly pandemic. We urged immediate orders to restore Client’s ability to manufacture, warehouse, transport and distribute the client’s essential products across the country.


Presently, Consocia is working with several enterprises for business continuity as well as crisis management. In the last few weeks, we have helped opening of plants and warehouses of the Indian entity of a global disinfectant company in 6 states including in Red zones as well as
Containment areas, besides that of a renowned lighting solutions company in two states (Haryana and Karnataka) already while they are now looking for our assistance in three more states.


Within a few days of being on-boarded, through our 24×7 support, we were able to secure not only policy interventions for manufacturing but also for warehousing, logistics and distribution as well as access to staff & workers. In the process, we were able to assure the Central and State Government stakeholders that all due precautions are being taken to prevent and contain COVID 19. We even helped with internal SOPs for transportation and staff movement.


We are helping the apex body representing the Shopping Malls across India against the debilitating impact the Coronavirus pandemic has had on them. On behalf of SCAI, Consocia has crafted several interventions to draw the attention of the stakeholders and policy-makers on the plight of the industry and reinforcing reasons for Malls to be considered for resuming operations in a staggered manner, for the post-lockdown phase. At the same time, Consocia is working with the empowered Group of Ministers and Committees for COVID-19 response as well as the RBI seeking urgent financial stimulus for the sector and amplifying the initiatives through media engagement from time to time.


The upcoming editions of the dynamics of business transformation white paper series will focus on specific industries with strategies and outcome driven solutions to positively impact business outlook for business recovery and continuity in the COVID-adjusted world.


COVID-19 is a long battle for the industry. As your trusted well-wisher, our team is available to support you during these uncertain times in the areas of business continuity planning, public affairs, public policy and government relations. Contact us: reachus@consociaadvisory.com

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