The effects of covid-19 on worldwide businesses have been nothing short of devastating. It seems like only yesterday, a handful of now-bankrupt businesses were thriving. Times like these make you wonder, how can companies deal with this environment? What can they do to minimize the damage caused by the pandemic?
There are several ways to answer this question. Three of them are expanding from the core, engaging in partnerships and joint ventures, and developing alternative business models.
Expansion From the Core
In times of economic crisis, businesses face tough decisions. One of them is whether to continue working as they have so far or to look elsewhere. There are advantages and disadvantages to both. On the one hand, if the business continues running in its current state, there is no need to invest in extra know-how and expertise. On the other, a crisis requires flexibility, the willingness to adapt and change. Utilizing the same method will probably yield the same results.
Having said that, the best course of action a company can take is a combination of both. It can expand from the core. For example, if an organization is an industry leader in the prescription drugs field, it could look into OTC medicines or medical devices. These are areas in which the business can jump in the short term without doing too much research and development.
As always, expansion from the core is maximized with enhanced manufacturing and efficient marketing. As a result, if the company decides on this option, it would be best to hire an industrial marketing consulting firm’s services. A reputable one will make the process go as smoothly as possible at an affordable price.
Partnerships and Joint Ventures
There are many benefits to a partnership or joint venture. Among others, they represent a decrease in both expenses and risk. For struggling businesses, fewer profits are not a huge price to pay for much lower risk levels and a stable income.
When considering a partnership, companies should first ask themselves:
- Have I done my due diligence on my business partner? Like any agreement between two or more parties, you need to know what you are getting into.
- Does my partner complement my business? If the business is the same or very different, it won’t be easy to create synergies that lead to success.
- What level of risk am I willing to take? Is my partner willing to do the same? Ideally, both partners should be equally invested with similar risk and profit levels.
- Is it better to have a long or short-term understanding? Long-term partnerships are usually better. Yet, this is not always the case.
Alternative Business Models
In simple terms, an alternative business model is doing the same thing differently. It also means doing a variety of things instead of only one. For example, if you own a restaurant, aside from providing sit-in and delivery options, you could also look into pick-up services, catering to small businesses, working with food apps, customizing menus, etc. If you sell clothes at a brick-and-mortar shop, you could expand into online stores, B2B sales, and clothing delivery services.
The key is not to do something radically different. It’s the opposite: innovating and breathing life into your organization by creating other ways to promote and sell your product or service.
Successful organizations differentiate themselves from non-successful ones based on how they deal with change. Change can be a different customer base or an unstable economical environment. It can also be a pandemic like covid-19, an unexpected event that has wreaked havoc in businesses worldwide.
No matter what the situation is, there are ways in which enterprises can deal with it. These include expanding from the core, engaging in partnerships, and implementing alternative business models. By doing so, companies will not only manage to stay afloat but also flourish during uncertain times.