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Scenario planning key to post-pandemic survival strategy

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A woman walks in an almost empty shopping mall, which has reopened after the lockdown restrictions eased in Quezon City, May 17. -- REUTERS

By Denise A. Valdez
Reporter

SCENARIO PLANNING is vital to a company’s post-pandemic survival strategy, especially since both experts and industry leaders cannot say with certainty how the future would look like.

“There’s no telling (when the market could recover). The only thing that we have control over is planning… Scenario planning helps us to become flexible (and) have ready plans for whatever situation we find ourselves in,” Kantar Philippines, Inc. President Gary de Ocampo said during the BusinessWorld Insights online forum on the business impact of the coronavirus disease 2019 (COVID-19) pandemic on Wednesday.

As the situation evolves on a near daily basis, Mr. De Ocampo said the best way to adapt is by preparing for multiple scenarios considering three primary factors: the behavior of the government and institutions, the behavior of people and the behavior of the virus.

“These future scenarios can act as a starting point to being ready for how the crisis might evolve. They will give us a framework for the evolution towards the new economy, which we’ll have to define, along with the shape of demand,” Mr. De Ocampo said.

The Philippine economy is already seeing the impact of the coronavirus crisis, as it contracted by 0.2% in the first quarter.

Simon Wintels, partner at McKinsey Singapore, said there will be two primary drivers for the country’s gross domestic product (GDP) growth in the years ahead: getting the virus under control and instituting appropriate economic policy.

He said the faster the country gets the COVID-19 outbreak under control, the sooner the economy can recover. Similarly, stimulus measures will also have to be effective to cushion the economic impact.

Leaders, Mr. Wintels said, will have to work on quelling consumer uncertainty because this will boost consumer sentiment, which in turn will drive consumption.

“The faster an economy is able to settle the uncertainty about what’s going to come…, the quicker the comeback. It will take quarters rather than weeks, and it could take three years, if not longer, if all doesn’t go well,” Mr. Wintels said.

As far as planning goes, Mr. De Ocampo said it will vary per industry.

For Coca-Cola Philippines, President and General Manager Winn Everhart said the company has already observed a decline in demand as most Filipinos are only consuming their products at home.

“While we have a strong at-home position, a lot of our business is being served in restaurants, sporting events, out with friends… As that traffic has declined, we definitely have felt the extent of it,” he said.

What the company hopes for is pent-up demand after quarantine, which Mr. Everhart said Coca-Cola has seen in Vietnam, China, Korea and Taiwan.

For logistics firm Entrego Express Corp., the new environment that forces people to adjust to remote shopping and consumption has opened a door of opportunity to expand its business.

Entrego Director Nicky Gozon noted the lockdown has set the stage for e-commerce to grow bigger, reducing dependence on foot traffic in brick and mortar stores. “Logistics will play a big role in bridging this gap,” he said.

Vincent Tempongko, Globe Telecom, Inc. vice-president for site acquisition and management, said the stay-at-home rules have resulted in consistently high network traffic and bigger demand for its at-home products.

As the relevance of Globe’s services continues to rise, Mr. Tempongko said the company intends to remain aggressive in upgrading its network, but focus now may be in increasing capacity in residential areas.

With the situation forcing a change in behavior both in businesses and consumers, Kantar’s Mr. De Ocampo said some new trends might emerge: heightened attention to hygiene and increased importance of self-sufficiency.

“What people really want is a hygiene perimeter within which they feel safe and can get back to normal. Each brand or retailer has to do this, and that’s the first takeaway about the right signal to send to reactivate demand,” he said.

Stockpiling may be normalized, longer shelf life of products might emerge, and new storage solutions might come up. Mr. De Ocampo said people want to be ready and not get caught by surprise again.

“When we look at survey data, consumers are not saying that they aspire for a new normal. Consumers want to get back to normal, they want to return to what they know… Therefore, depending on which industry you operate in, consider which of these behavioral changes will be temporary and which will really be assimilated into new and lasting ways,” Mr. De Ocampo said.





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