Covid-19 (Coronavirus) Impact on Businesses

Covid-19 or Coronavirus 2019 is a name of a virus spread across the world starting from the Wuhan city of China. The COVID-19 virus is a new virus linked to the same family of viruses as Severe Acute Respiratory Syndrome (SARS) and some types of common cold. This virus gets spread with the direct contact with infected person, or by touching surfaces contaminated by virus. Due to its effects on immune system, this virus generally attacks older people and people having pre-existing medical conditions.

No pharmaceutical products have yet been shown to be safe and effective for the treatment of COVID-19. However, a number of medicines have been suggested as potential investigational therapies, many of which are now being or will soon be studied in clinical trials, including the SOLIDARITY trial co-sponsored by WHO and participating countries. In many countries, doctors are giving COVID-19 patients medicines that have not been approved for this disease. The use of licensed medicines for indications that have not been approved by a national medicines regulatory authority is considered “off-label” use.

This major outbreak has make many of the major economies to lockdown their overall country’s operations to control the cases of Covid-19. This has impacted many industries, businesses such as e-commerce, airline, travel and tourism, and many other.

Many large as well as small businesses are getting adversely affected due to sudden lockdown in international market. Few industries will be having positive effect but other sectors will collapse due to this pandemic. For instance, airport operators and airlines will face cash flow dwindle and will require increased debt funding to pay rentals, salaries and to meet other expenses.

Another sector that will be impact adversely is hospitality as there has been cancellations and travel ban due to which many companies in this sector will face situation of insolvency.

INDUSTRIES AND RISK FACTOR

Airlines and Airport Industry:

•           Rise in interest cost

•           No cash flow

Hotels Industry:

• Cancellations of bookings

• Long-term travel ban

Automobile Industry:

•    No or less availability of labor post lockdown

•    Less spending on automobiles by Customer

Global companies are under pressure due to the Covid-19 crisis. Many businesses are handled by global operating companies need to be recessed and restructured. Many businesses are considering of adopting distributed global service model that can help large organizations in various sectors such as IT and Telecom, automotive and others to reduce organizational risk. These are the major sectors, however, many other sectors are going to get impacted due to this Covid-19. However businesses need to rethink and act rapidly with this situation.

Industries such as e-commerce, healthcare are expected to witness increase in their revenue. With the rising Covid-19, people prefers to use contactless delivery and pick-up services. Companies in this sector can prepare and can promote contactless payment systems.

In healthcare sector there will be growth in medical devices and life-science sector. Many governments are rapidly placing orders of thermal screening devices, hand sanitizers, face masks, gloves and other related items. Moreover, with the rapidly increasing coronavirus cases, many government are working towards the creation of testing kits and vaccines. This will increase overall revenue of healthcare sector.

The uncertainty about the nature and duration of the lockdowns and emergencies has complicated the policy response from the government. Where policy space is available, governments can achieve this goal using a mix of timely and targeted policies on hard-hit sectors and populations, including temporary tax relief and cash transfers to businesses.

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