No doubt, the Covid-19 pandemic has wreaked unparalleled economic devastation on a global level that no one has seen in three generations. When this pandemic struck, many businesses were at risk of flatlining, and only through government intervention were they saved. In today’s world, the survival of the fittest still applies. The companies that will have the best chance of a bounce-back are the companies that have an integrated supply chain. They will also have a diversified supply chain because of how having everything from one source can be deadly if that source gets cut off.
Why the Diversified Business Model
It should come as no surprise that the diversified business model adds to one’s level of agility. Having multiple sources of revenue means that no one single source is responsible for success or failure. What is lost from one source of revenue may be made up with increased revenue from another.
Companies with a diversified supply chain are also at an advantage because they don’t have to worry as much that a single chain will cut off everything. Entrepreneurs don’t want an over-reliance on a single business to meet all their demands because it could lead to serious problems in the long term.
When it comes to inventory, companies that typically house their inventory at their individual retail locations may struggle to meet online demands with stores closed. Pulling some of their online offerings may be necessary in order to prevent overwhelming demands. Companies that are already set up with a warehouse that ships online orders to various retail locations and customers are better off in this situation because the infrastructure already exists. They can adapt better than a retailer without a consolidated inventory.
Great Difficulty to Small Businesses
While big businesses will undoubtedly suffer much, the most significant suffering tends to come from small companies as Covid-19 truncated their profits. Small businesses are expected to have the most challenging time because they don’t have as many resources available to keep themselves afloat. Unable to generate robust and reliable cash flow, many of these businesses will have to fall back on investors, lenders, and creditors to keep from going belly up.
During this time, businesses can take this opportunity to shore up their weaknesses. If a difficulty arises, why not use it to become even better? This is especially possible during times like this because it offers everyone a time of reflection, and they will notice some of their weaknesses.
The greatest way to bounce back from this pandemic seems to be about those who can face adversity, diversify supply chains, and reinforce themselves to become even better.