COVID -19 has become a synonymous word off late. No one in the world had thought that an invisible microorganism would create havoc in the world in such a short time period. People are completely locked down due to one of the strangest reasons which were unheard off in recent history.

We used to feel the strain on people’s life and country’s economy during known crisis situations such as War, Terrorism, Natural Disasters etc.. Irony is that such calamities are always localized and would impact either a certain region or certain market segments.

But a Pandemic of this scale has impacted all walks of life and across length and breadth of the global map. Majority of modern generations had never imagined such a situation would strike them in such a short interval and make them lead a life completely opposite of what they are used to. 

Global Market is currently in a shock as COVID-19 attack has paralyzed all economies. The only key aspect is HOPE for a better future in order to imbibe a positive mental approach at this stage. Market at present is trying to find a balance between hope and fear.

The Pandemic has resulted in certain unprecedented situations. An intelligent strategist should deem it to be an opportunity and energize the inner confidence of hope for an improved and robust turnaround. 

Market at present is looking at the flows which would come courtesy index re-balancing by both agencies MSCI (Morgan Stanley Capital International -MSCI Index which measures the performance of stock market) as well as FTSE (Financial Times Stock Exchange – FTSE Index measures the prosperity of the business of organization quoted in London Stock Exchange). Both these indices are global benchmark indicators and correlate to the world economy. COVID-19 has left such a mark that these indices have reached an unimaginable dip surpassing the great economic depression seen both during 1992 and 2008.

The Economic slowdown had started since early 2018, impacted severely with a drop in oil prices. Oil economics had a key role in economic downtrend and Industries had started their risk mitigation policies to overcome the eventuality. COVID-19 has stormed out all such policies and the market are in its deep perils and practically yawning to see a glimmer of light in this dark tunnel.

The term Lockdown has become one of the scary words for both country’s economy and people due to this pandemic. This lockdown and its extension have a profound impact on GDP growth and corporate earnings. The market in actuality flip flops to such an extent, an accurate prediction is difficult to gauge. Between a prediction of hope and impending fear, the certainty and uncertainty, the market is trying to find a balance and which is why we have seen extreme volatility.

The massive crash of the global stock market is an indication of the seriousness the world is facing in this crisis situation. The pandemic has driven both people and Organizations scrambling for Ventilators. 

The COVID-19 pandemic is a medical crisis, it will be difficult to say markets and economy have bottomed out till such time we find a medical solution, which allows economic activity to resume on normalcy.

Early medical solutions with high fiscal and monetary stimulus by the Government can result in  V-shape recovery – an economic recovery which undergoes a sharp drop in the first quarter of GDP but thereafter, it should bounce back quickly because of early medical resolution and high fiscal and monetary support. 

If the Medical solutions are very late, economic recovery will have an ‘I’ type of impact - markets and the economy will crash and will take a long time to bounce back. This could be an, unlike scenario, as Governments do need to focus on GDP recovery as fast as possible in order to avoid any sort of unrest and another economic catastrophe coupled with COVID-19 impact. 

In between ‘V’ and ‘I’ status, Organizations can strategize for ‘U’ type of recovery which can sustain its progress planned in a phased manner.  

We have to pray to God that medical solutions emerge early and then our fiscal and monetary stimulus should be high so that companies and the economy can survive the downturn and come out of this crisis early. Every organization has to be as agile as possible in adapting to the evolving situation. The unprecedented nature of the lockdown has significantly disrupted both production and distribution and first priority are to stabilize the overall Supply Chain Network, ensuring market growth.

Another very big challenge for corporates is the shortage of adequate skilled workforce. With the large-scale departure of the migrant workforce, sourcing the right talent pool will be a concern for industries. The challenge for HR is both unique and unpredictable. The big question is ‘How do we skill our people for new kinds of jobs?’ The pandemic would bring in massive changes in the type of work which we expect from the workforce.

There has to be a balance between containing the spread of the virus, providing safety across the supply chain and reviving economic activity. Post lockdown there will have to be a renewed approach for the opening of the market in a staggered manner. The industry predicts that the pandemic could last much longer even after the lockdown is lifted. The crisis will not end early and the market impact will affect Q1FY21 in totality and it may percolate to Q2FY21 if timely Medical solutions get delayed.

But if the crisis subsides then one could see H2FY21 being very different from H1FY21.  Many industries would see a ‘V’ recovery. 

Industry and market will see a structural change post-COVID-19. Certain consumer habits could shift quite significantly. Trust will become an important currency and consumers will pay a lot of attention to health and hygiene. Few older generation’s habits of buying will change. The older generation will accelerate the adoption of online purchasing. Kirana stores will see a resurgence as they have been the shoulder for many neighbourhoods to rely on during the lockdown for their daily essentials. Also, more polarization will be seen in the market with demand for sachets and large packs rising. There is significant opportunity to re-imagine businesses and re-look to innovate and take bigger bets. The market would seek newer avenues for growth with the change in the dynamics of people’s buying choice and behaviour. 

The revival can be of ‘V’ recovery, but the demand will certainly follow ‘U’ recovery – a gradual increase in the products and services. 

Organizations have to adapt to this Market change and bask upon reinventing their business strategies. They have to redraw their vision statements and growth models to ensure they are back into reckoning by H2FY21. This could result in a decent FY20-21 performance which will be an excellent platform for the future.