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CPG industry challenges

Preparing to Combat CPG Industry Challenges in the US Due to Coronavirus

As the COVID-19 situation unfolds across the globe, it presents new operational and leadership challenges for CPG companies. As a result of the crisis, there is a seismic shift in the way consumers shop and what they shop for, creating new CPG industry challenges. The US has seen an exponential increase in the coronavirus cases over the last fortnight. This has left players grappling with new CPG industry challenges relating to how to manage the demand-supply inadequacies, formulate an action plan to turbocharge logistics flexibility, and to adjust the existing commercial strategy to suit the new norms. To address the crisis head-on and ensure business continuity, companies must respond to these new CPG industry challenges by quickly rolling out contingency plans while doing their part to minimize the spread of the virus.

Lessons for US CPG companies from other infected countries

A common CPG industry tre18nd and the coronavirus spreads is that consumers are increasingly stocking up essentials and grocery items, while the demand for non-essentials have drastically declined, posing new CPG industry challenges. US consumer goods companies can learn from the mistakes of other countries and better prepare themselves to face this black swan event. Based on the analysis of our CPG industry experts on the impact of COVID-19 in countries like China and Italy, four main category archetypes have emerged and are most likely to show a similar trend in the US:

  • There is a huge spike in the demand for categories such as health and hygiene (hand sanitizers and disinfectant masks), instant meals, and medical supplies. These items are being rapidly undersupplied across channels which in turn results in rigid turnover and frequent out-of-stock situations.
  • CPG categories such as shelf-stable groceries, daily hygiene products, and bottled water face constrained supply and reduced stock-levels.
  • Decline in non-essential CPG product demand in categories including snacks and savories, soft drinks, personal care products, and pet food.
  • Steep decline in luxury product sales including cosmetics, alcoholic beverages, and confectionery.

As more consumers are shifting to online channels for purchases, this creates new CPG industry challenges for players in terms of adapting their logistics and supply chain to this new trend. Furthermore, these spikes and dips in demand have created intense stress for CPG companies and require them to rapidly adapt their strategies for production, transportation and distribution, key account management, and marketing. 

During times of crisis like this, it is critical for companies in the CPG industry to take calculative and well-executed measures to ensure business continuity in the long run. Request a free proposal to know how industry experts at Infiniti Research can help you plan your next steps during the COVID-19 situation.

Action plan to combat CPG industry challenges due to COVID-19

In countries like China and the UK, CPG companies have faced intensified challenges due to the short-term nature of their contingency plans. To exacerbate the situation, travel restrictions across countries have created logistical bottlenecks, further worsening the existing inbound and outbound supply chain challenges. Here are some strategies for players in the US to effectively combat CPG industry challenges due to the COVID-19 crisis and react effectively to this unprecedented business shock.

Review production plan and inventory management

The need of the hour for CPG companies is to define a contingency plan to ensure supply continuity. Companies in the CPG industry must determine the weakest links in their supply chain including raw materials, packaging, or workforce and build strategies to address these issues in the order of priority.

Build logistics flexibility

Working with local authorities to understand the COVID-19 hotspots and lockdown areas will help companies to better plan the logistics and delivery to these territories. A major revamp would be required for the existing transportation and logistics plan to improve logistics flexibility. Furthermore, steps can be taken to stop or limit the logistics of the non-essential category.

Enable frequent and real-time customer communications

Making account managers constantly available to address customer conversations, especially in critical channels, is vital for companies in the CPG industry during the coronavirus crisis. Working with multi-functional teams to quickly resolve pain points and bottlenecks are essential to provide proactive and quick responses to the customers. CPG companies must also consider creating agreements with manufacturing teams to produce larger batches of specific SKUs in order to increase product availability. 

For more insights, get in touch with an industry expert.

Coronavirus outbreak

Coronavirus Outbreak: Strategies for CEOs to Navigate the Covid-19 Crisis

In just a small span of time, the coronavirus outbreak has had a major impact worldwide. While some organizations have managed to find ways to maintain productivity, others are still struggling to ensure business continuity. With the fast-changing global situation resulting from the coronavirus outbreak, market activities are disrupted on many levels. Today, consumers are compelled to use online services to fulfill their daily needs, putting many industries under pressure. Also, the government initiatives such as ‘lockdown’ and ‘social distancing’ have taken a direct hit on the transportation and travel industry comprising of hotels, tourist spots, and resorts. Besides, as the cases of infected individuals surge rapidly, business leaders are under great pressure. This compels them to assess the potential risks and act with rapid response solution. To help save your business from the ongoing crisis, our market research experts have outlined critical strategies that business leaders must consider to navigate through the covid-19 crisis.

Strategies for Business Continuity Planning During COVID-19

Secure liquidity

During this crisis, a major challenge for small and medium-sized businesses is access to capital. As revenues take a hit during this period, organizations will need to keep running business operations at lower costs. This majorly applies to small and medium-sized companies where overhead costs like rent, utilities, and payroll leave very little liquid cash to business leaders. To combat this challenge and keep the business running smoothly in the long-run, business leaders will need to look for new ways to provide immediate liquidity. This is where proposals such as ‘Small Business Workforce Stabilization Fund’ can be taken into consideration. This proposal will help small businesses impacted by the covid-19 to avail financial assistance and keep business solvent. Besides, business leaders must focus into developing incident management and scenario plans that are specific to the crisis, communicate effectively to stakeholders, and plan on how to meet government priorities without compromising the safety of the workforce.

In response to coronavirus outbreak, some businesses are developing contingency plans, while others are adapting strategic initiatives. Is your organization prepared to combat the covid-19 pandemic challenges? If not, RFP here and our experts will help you build rapid response plans.

Manage workforce

During these days, talent management is the biggest risk business leaders are talking about. Lack of workforce can put high pressure on business leaders to ensure smooth delivery. This subsequently can result in greater delays, errors, and ultimately customer dissatisfaction. Besides, as people are less willing to move outside their home cities, filling existing vacancies will be tougher for business leaders. As such, business leaders will need to embrace a defensive talent strategy, which focuses on identifying and retaining key contributors. Besides, assessing remote work strategy and attending to immediate global mobility concerns, such as HR policies and first-aid plans can help businesses to efficiently manage the workforce and subsequently maintain productivity.

Ensure supply continuity

As China is the mass exporter of merchandise to countries across the world, the coronavirus outbreak in China has affected almost every industry, including pharmaceuticals, food and beverage, automotive, and consumer electronics. Although the ripple effects of the coronavirus outbreak are difficult to assess, business leaders can take steps to mitigate risks and prevent potential supply chain disruptions. Establishing an alternative supply base can reduce dependency on one specific region. Also, recent studies show that organizations that solely depended on China for parts and raw materials were drastically hit. Even the company’s whose suppliers depended on China for raw materials were hugely affected by the coronavirus outbreak. As such, it’s high time for businesses to avoid reliance on single-source suppliers for raw materials and other requirements.

To ensure supply chain continuity, supply chain leaders must also constantly monitor Tier 1 and Tier 2 suppliers. Suppliers’ production, warehousing, and distribution sites must be monitored and supply chain leaders must make sure that their Tier 1 suppliers have undertaken robust risk management programs.

Are you scrambling to manage the impact caused by the coronavirus outbreak? If yes, our experts can help you to optimize business agility and reduce costs in the face of business uncertainties. For a FREE consultation, contact us here.

Build organizational resilience

According to experts at Infiniti Research, organizations must follow a five-phased approach for building organizational resilience and ensuring ongoing operations.

#1 Defining the business model

Owing to the coronavirus outbreak, business leaders must initially focus into their core customers to ensure the continuity of operations.

#2 Identifying uncertainties caused by coronavirus outbreak

By leveraging SWOT analysis, business leaders can identify uncertainties from the coronavirus outbreak. Besides, information technologies (IT’s) potential uncertainties can also be taken into consideration.

#3 Assessing the coronavirus impact

The third phase involves assessing and categorizing uncertainties based on their severity for the business.

#4 Designing changes

This phase involves developing tentative strategies for executing changes. This phase also involves identifying and leveraging digital technologies and capabilities to facilitate business operations.

#5 Executing changes

In the last phase, business leaders must apply an agile approach to executing the initiatives. Besides, agility, speed, and quality are the key to enabling the continuity of operations.

Want to know how the coronavirus outbreak will impact your business? Request more info and our experts will help you gather data-driven insights and plan your next move to minimize the business impact of the pandemic.

Coronavirus outbreak

Evaluating the Impact of Coronavirus Outbreak on Different Business Sectors

As the effects of the Covid-19 pandemic continues to reverberate, various sectors of the economy are confronting a different kind of menace. While vaccines for coronavirus are under the development stage and some of the initial treatments are showing positive signs of success, the potential human impact of the coronavirus outbreak is immense and a cause for global concern. Besides, the coronavirus outbreak has the potential to trigger an economic crisis. Experts at Infiniti Research currently expect to see a negative impact on all sectors of the economy, from the pharmaceutical industry to luxury good makers and beyond. Here’s a comprehensive insight into the setback brought by coronavirus outbreak across various industries.

Impact of Coronavirus Outbreak on Different Sectors of the Economy

Automotive Industry

Challenged by already weak growth rates in 2019, the automotive sector is estimated to be heavily impacted by the coronavirus outbreak. With all manufacturing coming to a standstill and temporary closures of plants due to collapsing demand and supply shortages, the effect of the coronavirus outbreak on the automotive industry is unprecedented. The experts predict that there will be a further demand slump in the automotive segment since the government has extended the factory’s shutdown in some Chinese provinces. As such, automakers will need to take a gradual approach in ramping up production operations based on market demand, without compromising the safety of employees.

For an in-depth market analysis on how COVID-19 is impacting your industry and data-driven insights to inform your next moves, request a FREE proposal here.

Logistics Sector

According to World Logistics Council, logistics is a huge sector contributing to over 20% of the global gross domestic product (GDP) and around 8% of global employment. With the coronavirus outbreak, the logistics sector has taken a dip. Besides, the initiatives undertaken by the government to prevent the spread of coronavirus, such as lockdown and social distancing are impacting the demand for goods and causing a threat to the global supply chain. Also, recent researches predict that the breakdown of coronavirus is worse than the SARS epidemic. To gain a competitive advantage in the long-run, companies in the logistics industry will need to understand their direct supply chains and the inherent risks they may be exposed to at the secondary or tertiary supplier and customer levels. By being aware of these risks, logistics companies can focus on formulating corporate strategies and business planning.

Pharmaceutical Industry

A recent survey of healthcare market research experts revealed that around 85% of pharma companies are concerned about the impact of coronavirus outbreak on their company’s performance, with Asia-Pacific market expressing the highest level of concern. As China accounts for over 80% of the global active pharmaceutical ingredients (API) production, the coronavirus outbreak has compelled major pharma companies across the world to bring operations to a complete stop, resulting in a palpable short-term impact. Besides, the novel coronavirus outbreak could also derail thousands of ongoing drug trails that companies in the pharmaceutical industry are running to test new drugs. As such, pharmaceutical companies need to act swiftly to build organizational resilience, address talent management risks, and drive clear communication with suppliers.

China has been worst-hit by covid-19 outbreak and its slowdown is rapidly hitting global supply and demand. For a detailed evaluation of the implications of the coronavirus outbreak on your organization, contact us here.

Retail Industry

As retailers are compelled to close their stores in order to stave off the coronavirus outbreak, the retail sector is estimated to be heavily impacted by Covid-19. Also, major retail brands are witnessing a negative financial hit in the first quarter as a result of the epidemic. While some others are running under reduced hours with significant footfall losses. Also, with people scarcely venturing out of home, retail brands are bound to witness plummeting sales over the coming weeks.

However, the challenges vary across various segments in the retail sector. For instance, the grocery sector is facing challenges in coping with the sudden surge in traffic and product demand owing to rising customer adoption of online channels to meet their grocery and daily needs. As such, retail stores are in need to stay prepared to act quickly and address short-term disruptions.

Food and Beverage Sector

Like all other sectors, the coronavirus outbreak has a severe impact on the food and beverage industry. While some processes food companies are witnessing a surge in demands, others such as restaurants and retail food establishments are encountering facing shortage of food supplies and workforce management issues. Therefore, companies in the food and beverage industry will need to take actions to mitigate the risk and streamline supply chain operations.

The unpredictable nature of the coronavirus outbreak is making it difficult for companies across various sectors to efficiently plan their next moves. That’s why we take special care to deliver reliable research. Our market research experts can help you to understand how covid-19 could disrupt your organization and provide data-driven insights to help you make your next moves.

Request more info to know more about our services and learn their benefits for your business.

Logistics and supply chain

An Action Plan for Preparing Logistics and Supply Chain Recovery from the Coronavirus Impact

The coronavirus outbreak is a deep humanitarian crisis that is posing unprecedented challenges for business leaders and the economy as a whole. This article is intended to provide key insights to logistics and supply chain leaders grappling with responding to the existing crisis while ensuring employee safety, operational viability, and reviving their business from a historic supply-chain shock. A deep analysis of the ongoing situation by our industry experts suggests that several businesses can mobilize and set up rapid crisis management mechanisms to ensure business continuity. However, the typical focus of most of these efforts has been understood to be for the short-term. Logistics and supply chain leaders must also plan for the medium and long term in order to build resilience for the future.

Logistics and supply chain COVID-19 impact

Evaluate existing inventory at hand

At this stage, businesses must begin by estimating how much inventory is available in their value chain. This facilitates capacity planning for the long-run and also acts as a bridge to keep production running. Specific categories that must be considered include stock of finished goods in the warehouse, spare-parts inventory, inventory-in-transit, and blocked inventory that may be held for sales, QC, and testing.

Create logistics and supply chain transparency

Begin by determining components that are critical for operations. Also, have a clear idea of the components that are sourced from high-risk areas and lack ready substitutes. Supply chain risks related to these commodities can then analyzed to assess the risk of interruption from suppliers of tier-two and onward.   Manufacturing companies must engage with their key suppliers across tiers in an effort to form an agreement to monitor lead times and inventory levels and establish an effective recovery plan.

Estimate realistic end-consumer demands

A crisis such as the existing COVID-19 may cause an exponential increase or decrease in end-customer demand, making it increasingly difficult to gauge the fluctuations in demand harder.   Evaluating the underlying uncertainties in forecasts during short term and medium-term demand planning is essential.  Additionally, direct-to-consumer communication channels, market insights, and internal and external can prove to be invaluable sources of information in assessing the current state of demand among the customers’ customers. To prepare better for supply chain and logistics challenges related to the demand, manufacturers can consider integrating market intelligence into product-specific demand forecasting models, use advanced statistical forecasting tools to generate a realistic forecast for base demand, dynamic forecast monitoring to react quickly to inaccuracies.

Want more insights on how our advanced market intelligence services can help you with accurate demand planning and forecasting models to keep your business in control despite the ongoing crisis?

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