Strategic Management for SMEs during Covid-19 Pandemic
Many countries have locked down to prevent the spreading of coronavirus, and by directly or indirectly, the business activities of the countries have almost shut down. Covid-19 pandemic has affecting the world economy and has directly causing many small and medium enterprises (SMEs) to close their businesses. Thus, good strategic management is very essential right now in order for those businesses to survive.
Firstly, the most important part as a lubricant in operating business is the liquidity or the cash in hand, without sufficient liquidity, the business will be stuck. Thus, SMEs should react quickly by turning some of the business’s assets into cash, or cut loss by selling their product for a lower price. During a hard time like this, the government usually comes out with a cheap loan to help these businesses which is the business loan with a low interest rate. Therefore, SMEs should take this opportunity even though they don’t have a plan to use this money before.
Secondly, restructuring the business model. As we can see that during the Covid-19 pandemic, there is a limitation of our movement. The movement control order is an action taken by the government to prevent the spreading of the virus. Thus, there is a clear opportunity there which is online services or any type of online business. So, SMEs with only the offline store, should be looking for an online store and the delivery. Even though their business cannot be operating in the way of online or delivery, they should look for a new side business that can compensate for the missing revenue.
In a conclusion, it is important to a country that all the business should be survived especially SMEs. It is to prevent from domino effect that leads to an economic recession or even depression. The government should play the important role in this crisis. The government should quickly take any necessary actions to help these businesses, by injecting the cash flows into the economy besides resolving the Covid-19 pandemic as soon as possible.
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