“Survival!” — that's the only word that strikes in our mind during the deadly Covid-19 pandemic. The pandemic outbreak had a negative influence on everyone's lives, employment, and businesses on the global scale.
In terms of business, entrepreneurs and business owners had to devise new strategies to stay afloat. For that, they have to pivot their business activities and model.
According to the survey, 92 percent of respondents pivoted their business in at least one way, but many pivoted in distinct ways. This means that only 8% of businesses did not pivot at all in order to adapt to the current scenario.
Without a doubt, businesses must respond quickly and devise inventive strategies to stay intact.
In today’s guide, we’ll understand and learn all about pivoting business, top COVID-19 business pivot examples, and related concepts. Let’s take a look at what we’ll cover ahead:
- What’s Pivoting?
- Pivot During Covid-19 Pandemic
- How are Companies Dealing with the COVID-19 Crisis?
- 3 Important Factors to Pivot Successfully
- Best Ways to Pivot Business Model
- Approaches to Boost Business Pivot Strategy During COVID-19
- Points to Consider During a Covid-19 Crisis for your Business
- Challenges Associated With Pivoting
- Top Covid-19 Business Pivot Examples
- How Deskera Can Assist You?
Let’s get started!
Pivoting entails significantly shifting your company’s trajectory when you discover that your current services or items are not satisfying market’s needs and expectations.
Furthermore, pivoting enables businesses to take a new path. It also means that you may need to start your firm from scratch at times, discarding previous investments and approaches.
Check this COVID-19 Business Pivot Example:
For years, you've been selling delicious cupcakes in high-end grocery stores. Customers love your product, but demand dwindled during the pandemic and the ensuing economic downturn. Many people are opposed to the idea of overspending on cupcakes.
You make the decision to seek out new ingredient sources. Moreover, you don't want to compromise the quality of your cupcakes in order to save money on production. You quickly realize you're overpaying for supplies and replace your suppliers with new, less expensive ones.
Further, you can now relaunch your product as a more budget-friendly delight. Customers on a tighter budget will like the revised price and positioning.
Pivot During Covid-19 Pandemic
Business executives comprehend the need to modify their organizations even in the best of times. People react in this way to shifting economic conditions.
On the other side, the COVID-19 pandemic has presented a new, exceedingly harsh pivot-or-die scenario. Executives and entrepreneurs who want their businesses to prosper in the future should research some key examples of how other businesses have accomplished so.
In order for a pivot to be successful, three conditions must be met. According to Mauro Guillén in a Harvard Business Review article, three elements must be met for a company to successfully pivot. The pivot must be able to do the following:
- Align the business with at least one trend that the outbreak began or exacerbated (e.g., remote work).
- Extend the company's current capabilities in a way that confirms the company's initial strategic goal, and;
- Provide a long-term path to profitability that maintains/increases brand value in customers' minds.
Corporate executives must be highly aware of current short-term conditions and resources in order to attain these goals in a competitive manner.
However, greater potentials that can have a long-term benefit on the brand's reputation and operations must also be considered.
Although, COVID-19 is really not going to last forever. But with new variants, you still need to keep pivoting in your strategy.
Moreover, it's beneficial and inspirational to watch existing organizations make the necessary modifications and learn from their techniques.
It also aids them in being open during these trying moments. Because it motivates CEOs and founders of startups to pivot in ways they've never done before.
In that scenario, we can follow in their footsteps, overcome existing challenges, and create a prosperous future.
How are Companies Dealing with the COVID-19 Crisis?
Many businesses have adjusted their business plans to better line with current demand, at least temporarily. Masks and other personal protective equipment are made by clothing manufacturers. The focus of restaurants is on curbside pickup and delivery.
Other small businesses are shifting away from the wholesale business model by increasing their web presence and direct selling.
Analyzing how competitors have shifted to new business models can be quite useful for leaders who are considering a big transformation.
3 Important Factors to Pivot Successfully
Following we have listed three crucial factors that you must consider to pivot your business successfully. Let’s learn:
1. Comprehend New Trends
It is highly critical to understand and follow new trends emerging in the marketplace. People have changed their ways of working, shopping, and much more— therefore, it is important to pivot your business accordingly.
Businesses that want to develop new, innovative methods to capitalize on their market can take advantage of remote employment, as well as an increasing reliance on technology as a result of social alienation.
To communicate with customers, businesses have switched to employing online storefronts and smartphone apps. Those that accept this new digital lifestyle will have an advantage over those who are expecting for physical meeting locations to return.
2. Enhance Sustainability and Profitability
If a company wants to pivot, it must be successful and long-term viable. The company's product or service must maintain and boost brand value while also encouraging consumers to buy into the fresh approach.
Over time, the company will be able to transition from its original profit-generating business model to one that is long-term sustainable in a COVID-affected environment.
3. Broaden Business Model of the Organization
Pivoting successfully does not necessitate moving into a new location. Some businesses have a reputation for performing particular things.
Zara, for example, is well-known for its stylish clothes and accessories. If a firm wants to be successful in its pivot, it should look at sectors that are related to its main product.
Moreover, Zara's new range of designer face masks demonstrates how they used their brand awareness and recognition to create a viable product for a post-pandemic future.
Best Way to Pivot Business Model
Consider your product or service, as well as your assets, customers, network of partners, supply chain, and any other tangible assets.
Determine how you may repurpose these resources to produce new value in a product or service that customers urgently require or demand.
Consider other delivery methods, such as eateries moving to curbside pickup. Look for additional revenue streams. Find new methods to engage with partners on product or service offerings. And, of course, pay attention to your clients.
In simple words, do what successful entrepreneurs do best: think beyond the box. To begin, gather your complete team (virtually) and suggest ways to pivot. Then figure out what's feasible while remaining open to unconventional ideas.
Further, put the strategy to the test, evaluate it, and make changes as needed. The new model doesn't have to be perfect right away; all it needs to do is get you started in the correct path.
Some pivots caused by pandemics are merely a means of temporary survival that can be reversed once things return to "normal." Many organizations, on the other hand, may find that their new business models are more successful than their old ones – and certainly more resilient to upheaval.
Even short, tactical moves in the face of a crisis can help a company thrive and prosper. Transforming your company's business model during a pandemic, if done correctly, might deliver the innovation you need for meaningful, long-term success.
Approaches to Boost Business Pivot Strategy During COVID-19
Business owners may face dilemmas associated with pivoting during the COVID-19 pandemic. However, during these times, a small company's best shot is to rethink its business tactics, methods of reaching out to customers, and prioritize the usage of all things digital.
A list of suggested solutions for suffering businesses is provided below:
Pay Attention to Customer Needs and Requirements
You must pivot your business that will satisfy or fulfills the needs and requirements of your customers regardless of the industry in which your company operates.
Brands like Bershka, Zara, and many other popular brands have now expanded their product offerings to include COVID-19 masks, medical supplies and more.
Popular brands have successfully added a desired product, potentially attracting consumers to shop their store with the added benefit of purchasing a necessity.
Developing New Products
Companies are also hard at work developing new items. Manufacturing ranked first among industries that shifted to new products, followed by engineering firms and wholesalers. This suggests that many companies with the resources to create, manufacture, and market new items are taking the effort to do so.
Many times, the companies creating new goods are part of the industries that have been struck the hardest by pandemic-related closures.
Some companies pivoted to creating face masks to make up for the lost revenue when the business world abruptly shut down due to COVID-19 pandemic. This demonstrates that you may merely need to reorganize your resources to meet new client demands.
Delivery Channel Services
Customers can pick up deliveries and their recently purchased products safely and conveniently at retail businesses that offer curbside pickup.
Because many consumers are still apprehensive of buying in-person, being able to shop online and drive to the local store location has considerably lowered the risk of infection and is cheaper than using home delivery services.
In terms of your own business, this is an excellent feature to emphasize and advertise to your customers in order to increase sales by ensuring that everyone is secure.
Utilize Manufacturing Infrastructure
Leasing out space for the production of vital things like masks, scrubs, and gowns has shown to be a highly successful business strategy for keeping money coming, irrespective of the size of your property or its location of manufacture.
Businesses are not just pivoting during COVID-19, but they are also assisting communities and health care workers in staying safe from the pandemic's dangers or threats.
Build an Online or Virtual Service
Many small, local businesses lack an internet presence and have limited expertise using social media to promote their goods and services.
This is why taking some time to establish these platforms could assist increase exposure and make shopping easier for customers at COVID-19.
Using free services like Appypie, Wix, or WordPress, especially for small enterprises, can provide you with a step-by-step method for creating your own mobile website or app.
Pursue New Customers
When it came to altering business models, small enterprises that chased new consumers were the most likely to cite a lack of funds as their primary difficulty.
Surprisingly, this same group was the least likely to impose a COVID-19 premium to cover safety gear, social distancing, and other relevant expenses.
This further raises the prospect of a conundrum in which low-cash-flow businesses attempting to attract and keep new consumers are hesitant to drive them away with more fees or higher pricing.
Customers are actively turning to technology for all of their purchasing needs as a result of this expanding usage. As a result, it's vital to advertise your business extensively online.
Reaching out to your local community and sharing information about your business, whether through Facebook groups or local group sites, can help attract customers to your store, products, or services.
Moreover, just declaring that you are officially open may be enough to enlist the support of your community and assist you in your success.
Offer Sales Deals
Offerings and sales are a terrific method to increase sales and persuade customers to shop on your website. Customers who were on the fence about purchasing a few new items may seal the deal with incentives such as free delivery or a substantial discount.
Teamwork and Collaboration
It can achieve great outcomes by bringing two diverse audiences together as one by cooperating with other brands.
Collaboration with others can effectively double your traffic and audience, resulting in a larger potential client base.
This tactic could also be used by collaborating with an influencer who aligns with your brand's messaging and pushes items to a demographic that is likely already interested in the product.
Trust and Loyalty
Showing consumers that you support and stand behind them during the pandemic through various platforms helps build a transparent and reliable relationship between two parties. Working on strengthening loyalty can also lead to customers' unwavering support even through COVID-19's challenges.
Innovation and Experimentation
This is an opportunity for your small business to reinvent itself and possibly produce something fantastic. The pandemic has opened new possibilities for businesses to investigate and reposition themselves, whether it's rebranding or improving their online presence.
Despite your fears of failure, being able to test alternative techniques to determine what works and what doesn't can help you create your company more effectively.
From all of these considerations, the one constant that all small firms should follow is the speed with which they adopt each method and pivot. Because the Coronavirus has caused quick changes in customer behavior, your company will need to confront each strategy head-on in order to obtain the greatest outcomes.
Points to Consider During a Covid-19 Crisis for your Business
We are operating in challenging moments, and the ability to create is more crucial than ever before. Always keep in mind that perseverance, ingenuity, and hard effort are the cornerstones to long-term success.
- As a "always-on" approach, make sure your staff is able to be quick and nimble by allowing them to work remotely.
- Increase your contact with customers and partners, informing them of any changes you're making in light of the crisis's ever-changing landscape.
- Set up daily Google or Zoom calls to help your team collaborate, be more productive, and stay positive.
- Make your "to-do" list as unique as possible. Instead of previously scheduled activations, redirect your efforts on work that can be completed right now.
- Involve your community, be open to feedback, and make adjustments as needed. Keep in mind that everyone is dealing with the crisis, and if you make a mistake, apologize and correct it.
- When you emerge from COVID and pivot your business strategies, it's time to take a closer look at investing in: Analytical data, Digitalization of the supply chain, The Internet of Things (IoT), AI stands for Artificial Intelligence, Automation of robotic processes
- Make a daily agenda for yourself and/or your team and stick to it.
- Make it a priority to network! Reach out to at least five individuals every day to check in with them and see how they're doing. Make no demands.
- Shift your perspective from one of selling to one of supporting. Keep placing your efforts to assist your community. The goodwill developed as a result of this will benefit your company in the long run.
- Concentrate on progress! Develop abilities that will improve your profile or offer.
Challenges Associated With Pivoting
According to research, the single greatest issue small firms face while pivoting is a lack of personnel skills needed for a new approach, knocking out other impediments such as a lack of finance. This is reasonable.
If you don't have the expertise to operate new offerings like an online store, a virtual service, or a new delivery channel, they won't be successful.
This simply means that companies must either hire new employees with the necessary abilities or teach existing employees in new skill areas and assign them new approaches and tasks.
Further, you might face scarcity of funds or cash challenges due to covid-19 crisis. Additionally, implementing online delivery channels requires extensive strategy and tactics, which may be challenging as well.
In case, you are planning to develop a new product or service as your pivoting tactic. Then, make sure you do thorough market research so that you fulfill what customers require.
Once business starts getting back on track, you might still find it challenging. It is because of following new protocols associated with health and safety practices.
However, it seems certain that continuing business as normal will not suffice to get us through this crisis. Small businesses will have to keep innovating until client behavior settles down.
Meanwhile, small businesses must make customers feel welcome when they return to their stores, as well as meet them wherever they are—whether it's online or at the curbside.
Top Covid-19 Business Pivot Examples
The closing of Covid-19 triggered an almost immediate economic collapse that has caused havoc on both big and small companies. As a result, the company's only chance of surviving is to undertake a major restructuring - or declare bankruptcy.
The reality of how firms are handling the situation and planning for recovery reflects a quite different picture, one of shifting to business models that support both short-term survival and long-term resilience and development.
Pivoting is a directional shift that adds enough value to benefit both the customer and the organization.
Following we have discussed some examples of companies that have successfully pivoted their business model during Covid-19 pandemic.
One of the most widely used professional chats and messaging systems started with a completely different concept. Tiny Speck and Stewart Butterfield created Glitch, a quirky but surprisingly popular video game, between 2009 and 2012.
Their game emphasized sociability and exploration instead of combating monsters or solving problems. The team decided to focus their resources on a new product: a workplace messaging app, because the game was successful but not profitable.
The Swedish company was looking for a pivotal moment that would allow it to solve a major problem: Unlike Apple Music, Spotify is mainly reliant on free customers who must endure commercials.
Prior to the pandemic, the company expected ad revenue to grow even more quickly than the free user base, boosting the bottom line considerably.
Despite the fact that the model had begun to show signs of maturity, its weaknesses were not readily apparent until the outbreak struck and marketers' budgets were curtailed. Spotify responded by introducing original content in the form of podcasts.
In just a month, the Shopify platform has seen over 150,000 podcasts posted by artists and users, and it has signed exclusive podcast deals with celebrities and began creating playlists.
As a result of its new strategy, Spotify may become more of a trendsetter and comes under top covid-19 business pivot example.
Red Roof Hotels
The business is now providing day rates for employees, allowing them to work in a quiet, private environment that is more comfortable and flexible, as well as providing a welcome change of scenery.
Companies were already looking at rental and shared office spaces to give these benefits and cut costs before the pandemic, and gig workers were coming up with inventive ways to set up temporary offices.
The creators of Shopify didn't pivot by coming up with a fresh idea; instead, they sold an idea they already had, but for a different purpose.
Daniel Weinand, Tobias Lutke, and Scott Lake tried to start their own online snowboard equipment company, Snowdevil, in 2004.
They didn't like any of the existing e-commerce solutions, so they created their own. The shop failed miserably, but they were so pleased with the storefront they created that they decided to offer it to other businesses in need of a better internet presence.
Walgreens started offering food and personal care delivery, which are usually in high demand. This will assist in broadening the brand's appeal beyond medical and pharmaceutical requirements.
Importantly, Walgreens agreed to a new agreement with Postmates in order for this to work. The more targeted relationships you can contemplate and make a reality, the more additional services and goods possibilities you'll have.
These various cooperation options can offer more overall financial security for the organization, similar to diversifying an investment portfolio.
Walmart is a perfect example of a corporation that has negotiated a "digital pivot," according to the MIT Technology Review. Consumers can either buy online for delivery or store pickup, or shop in the store and pick up products they already ordered online.
Moving into ecommerce, as well as moving to remote work via cloud migration, were two of the most common ways businesses used technology during the global pandemic.
How Deskera Can Assist You?
As a business, you must be diligent with the employee payroll system. Deskera People allows you to conveniently manage payroll, leave, attendance, and other expenses. Generating payslips for your employees is now easy as the platform also digitizes and automates HR processes.
Companies of all sizes will need to evolve and reconstruct themselves as the times change. Pivoting a company's business plan quickly can help salvage a brand fighting Covid's pandemic impacts, as well as build up sensible practices that will remain effective and once the world returns to some semblance of normalcy.
As we have now reached at the end, we've compiled a summary of essential elements from this article for your future reference. Let's get started:
- Pivoting entails significantly shifting your company’s trajectory when you discover that your current services or items are not satisfying market’s needs and expectations.
- Corporate executives must be highly aware of current short-term conditions and resources in order to attain these goals in a competitive manner.
- It is highly critical to understand and follow new trends emerging in the marketplace. People have changed their ways of working, shopping, and much more— therefore, it is important to pivot your business accordingly.
- Put the strategy to the test, evaluate it, and make changes as needed. The new model doesn't have to be perfect right away; all it needs to do is get you started in the correct path.
- If a company wants to pivot, it must be successful and long-term viable. The company's product or service must maintain and boost brand value while also encouraging consumers to buy into the fresh approach.
- Popular brands have successfully added a desired product, potentially attracting consumers to shop their store with the added benefit of purchasing a necessity.
- You need to make use of free services like Wix, Appypie, or WordPress, especially for small enterprises, that can provide you with a step-by-step method for creating your own mobile website or app.
- Reaching out to your local community and sharing information about your business, whether through Facebook groups or local group sites, can help attract customers to your store, products, or services.
- Working on strengthening loyalty can also lead to customers' unwavering support even through COVID-19's challenges.