Strategic Responses During Crisis: An Empirical Investigation

Abstract

The coronavirus spread across the globe has affected the human life and economies critically. On one side, this situation has brought the attention of policymakers to save the mankind, on the other side; this pandemic situation threatened the business across the sphere. The firms are worst hit by the virus outbreak and are struggling to survive in this tough phase. The objective of this study is to measure the challenges faced by manufacturing and service industry, and how it influenced the financial parameters such as market share, profit margin, and logistics cost, and operating cost of the organization. It is also to be observed that in such a crisis, an appropriate strategic plan is required to sustain the businesses. Sales, revenue, production, profit margin, raw material availability, in-house employees decreased in manufacturing industries during COVID-19 but no significant change is observed in the service industry. Raw material cost, manufacturing cost, logistics cost, and operating cost increased significantly in both manufacturing and services industries. Market share, advertising cost, and customer connect decreased in manufacturing industries and increased in services industries. The main strategies in crisis are investigated empirically; retrenchment, persevering, innovation, and exit (Wenzel M, Stanske S, Lieberman MB, 2020, Strategic Management Journal, 41, V7–V18), it shows how organizations have taken steps proactively to fight in the crisis of COVID-19.