The Impact Of The Coronavirus Pandemic On Uk Businesses: Was It All Bad?

The Impact of the Coronavirus Pandemic on UK Businesses: Was it all bad?

It is always hard to predict and plan for the impact of external factors on a business. Whether it be economic, political, legal or social change or the impact of the actions of competitors or your supplier network, businesses spend vast sums of time and money trying to predict, and create contingency plans to minimise, the impact of anything that could disrupt their operations.

Another key external factor is the impact of global events with no better example than the coronavirus pandemic, which from its slow beginning in early 2020 brought the world to a standstill, and the UK was no exception. The once bustling streets of London, the buzzing local market towns and thriving startup scene faced an unprecedented challenge that tested the UK business community s resilience like never before. The impact of the pandemic was far-reaching and left no industry or business untouched, product or service, small or large, international, domestic or local - the pandemic left its mark on them all.

For many firms the pandemic knocked their business back many years and for some even signalled the cessation of operations, either temporarily through the furloughing programme, or shutting the business for good. When the dust settled however, many businesses, new and old, found opportunity from the chaos and came out stronger. This was often achieved through quick strategic decision making and strong and decisive leadership from the owners and managers of the business.

The obvious winners from the pandemic are the pharmaceutical giants that developed the vaccines which helped reopen the world and bring everyday life back to something that resembled normality. Companies like Pfizer, Moderna and AstraZeneca were at the forefront of vaccine development, resulting in significant financial gains and increased market value. Pfizer alone hit revenues of over $100 billion in 2022 with almost 60% being attributed to COVID-19 related products.

As the way people worked changed, some may say irrevocably, to remote working, online technology companies experienced a surge in demand for their services. Video conferencing platform providers such as Zoom and Microsoft Teams saw substantial increases in their user base and revenues as businesses relied on their platforms for meetings, events and team collaboration. Zoom s profits jumped from just $21.7 million in 2019 to $671 million in 2020 where at its peak it had more than 300 million daily meeting participants.

As shops closed and consumers were confined to their homes, there was a huge surge in demand for online shopping. Being positioned perfectly to absorb this demand, e-commerce giants like Amazon experienced unprecedented levels of revenue as consumers` behaviour shifted to online shopping, reporting sales of $108 billion in the first three months of 2021 alone. Even as the high streets started to open up, consumer wariness and government guidelines on the risk of exposure ensured that this increased demand stayed high.

It wasn t only e-commerce that helped Amazon s revenues but one of their supplementary services, Amazon Prime which along with other streaming services such as Netflix and Disney+ & took full advantage of the pandemic. As people sought entertainment during the long lockdown months, subscri ptions and viewer numbers soared, with total UK streaming service subscribers jumping 34% in 2020 to over 32 million. lt;/p>

With gyms, fitness centres and studios shutting as part of the lockdown, exercise enthusiasts looked for other avenues for staying fit. Companies such as Peloton took full advantage of the home fitness revolution with their clever bike purchasing model, subscri ption virtual workout classes and celebrity endorsements. Peloton saw revenues increase 172% in the second quarter of 2020 to over $600 million and in the first quarter of 2021, made revenues of over $1 billion.

Finally, with everyone locked down at home and no restaurants open even if people did manage to go out, food delivery services stepped into the void and saw significant growth in orders. Businesses like Deliveroo and UberEats particularly saw huge growth with Deliveroo seeing its number of orders (almost 150 million) and value of orders (£3.4 billion) double in the first half of 2021 compared to the same period in 2020. Furthermore they took their opportunity to expand their scope of services to include many more national and local restaurants which then had a positive impact on their service offering post-pandemic.

Whilst clearly the pandemic left an unprecedented economic impact and presented immense challenges for many businesses in the UK and worldwide, some businesses found new opportunities and experienced significant growth as a result. Many of them will continue their upward growth trajectory as the world recovers from COVID-19 whereas others will have taken the opportunity, had their success during the pandemic and now either growth has returned to normal, they ve changed strategy and moved onto other avenues or closed their doors for good. lt;/p>

Elliott

Teacher of Business

TOPIC LINKS

External Factors

Contingency planning

Supply chain

E-Commerce

Decision making

Leadership and management styles

Change in scale

Crisis management

Strategic change