Developing Business in Pandemic Covid-19 Conditions
BANDUNG, itb.ac.id — The crisis conditions due to the pandemic have caused economic growth to slow down, banking liquidity difficulties, unemployment or layoffs to increase, and the economic cycle including production-distribution-consumption are also affected. This issue was discussed in the SBM ITB webinar series with the theme "Grow Your Business in the Mid of Pandemic".
The Dean of SBM ITB, Prof. Utomo Sarjono Putro in his opening said, this webinar raised the topic of MSMEs and startups which became an important pillar of the majority of the national economy by contributing 60 percent of Gross Domestic Product (GDP). According to a report from the Ministry of Cooperatives and Small Medium Enterprises in May 2020, as many as 47 percent of the total MSMEs experienced problems that collapsed due to COVID-19.
“This pandemic is forcing economic change towards a less-contact economy, thus demanding economic actors to be able to better utilize digital access. Our MSMEs need plug and play technology, which is easy for MSMEs,” explained Prof. Utomo.
Effect of COVID-19 on the Creative Economy
Dr. Dina and her team had previously conducted research by distributing questionnaires online from March 24, 2020 to April 14, 2020 to various associations in the creative economy subsector. The most dominant sub-sectors filled were fashion (14.6 percent) and culinary (14.3 percent) with 16 other subsectors. From this data, 8 percent of respondents claimed to have added turnover, which turned out to come from the games and animation subsectors.
This can be indicated by an increase in consumer demand during work from home which tends to do activities such as playing games and watching. Social distancing also affects many industries, especially fashion, which experienced a large loss of income at a level of around 100 to 300 million Rupiah.
In terms of winning competition in the midst of the COVID-19 disaster, most creative economy actors tend not to try risky new projects. Creative economy players are more likely to respond to competitors' strategies than other strategies. “Many startups are starting to sell products that are different from their industry by adjusting to the needs of a pandemic situation. There are many ways that they do so that cash flow is maintained,” explained Dr. Dina.
As many as 75 percent of creative economy practitioners are also actively seeking new knowledge and upgrading skills to adapt, especially in the photography subsector. From the data obtained, creative industry players also strongly disagree to reduce employees in their efforts to overcome the impact of the pandemic even though they have to do cost efficiency. They prefer to reduce working hours and salaries of employees than layoffs.
Dr. Dina also conveyed strategies that can be taken in general by creative economic actors in the short, medium and long term. The strategy is divided into four parts of the business model component, namely customer value proposition, profit formula, key resources, and key processes.
“In the short term, it is important for MSMEs to take care of consumers and try to collaborate with other sub-sectors so that they can expand the market. In addition, from the profit formula, try to think about changing the payment way and reducing unnecessary costs, as well as optimizing available resources and starting shifting to online,” explained Dr. Dina.
How to Increase Business Potential in the Era of COVID-19?
Building a new business or startup has two keywords, namely temporary and extreme uncertainty. This was conveyed by Fajrin Rasyid. “A startup must definitely be able to be observant in solving problems and conditions that exist in the surrounding community,” said Fajrin.
Viewed from the culinary industry business, Rex Marindo as a person who has been professional in the culinary industry since 2013 said that 90 percent of the culinary industry players are very mature in how to cook and create recipes, but lack the knowledge to survive and grow in business. One of the things that need to be considered in creating competitive advantage for culinary industry players is the Database Building and Management (application platform that includes WhatsApp Business and list-building email as a data container for potential repeat purchases by consumers).
Since the pandemic conditions, consumers prefer to buy food on a delivery basis rather than eating on the spot. Adaptation for behavior towards new normal by developing strategies such as social distancing, health consider, cashless, less contact must also be implemented by culinary businesses such as restaurants.
“Recent digital understanding must be fully implemented in all business and organizational processes. Moments like this also make businesses have to maintain brand communication in their business,” explained Rex Marindo.
One of Tiket.com Co-Founders, Geary Undarsa said that cultural crises or the core values that a business has becomes very important. “In my opinion 3F can save companies. It stands for Fast, Flexible and Friendly. Quick in responding and conveying something, then flexible in change so that there are no limits at every level of workers because consumers are more demanding on the best, cheapest, and fastest solution. It is also easy to build good relationships with fellow employees, suppliers and consumers,” he said.
Meanwhile, in closing Prof. Dwi Larso said that business is very important to see the pandemic as an opportunity to do business even though many consumer behaviors have changed, by offering new products or services from the business strengths they had before.
Reporter: Salsabila Mayang Febriana (Management, 2020)
Translator: Evita Sonny