Managerial Economics 01

Assignment number: 01
Zoona Javaid Kiani

Roll number: 01
BBA- 6th
Managerial Economics
Submitted To: Ma’am Batool Naqvi
DEPARTMENT OF MANAGEMENT SCIENCES(UAJK)
Effects of Covid-19 on the business sector of Pakistan:
Pakistan’s fragile economy was just moving towards the stability when
covid-19 struck. According to the Karachi Stock Exchange, “Pakistan’s
economy is shrinking, unemployment is rising and various sectors are in
crisis”. According to a recent report of United Nations Conference on
Trade and Development, Pakistan would be hardest-hit by the global
pandemic of Covid-19. People will suffer from food insecurity and
poverty.
1: Major victims of Covid-19 outbreak are, micro, small and medium-
sized enterprises (MSMSE’s). MSMEs are the backbone of many
economies worldwide that provide income and employment generation
to a large number of people around the globe.
2: In Pakistan, due to Covid-19 outbreak and lock downs, MSMSE’S are
facing arduous effects on their businesses. The unavailability of labors,
slowdown of productions, shortage of raw materials and transportation
restrictions will have major ramifications on these businesses.
3: Service sectors is also affected due to Covid-19 as businesses are
closed and millions of workers are on the verge of facing
unemployment.
4: 43 percent of businesses has been temporarily closed. Respondents
that had temporarily closed largely pointed to reductions in demand
and employee health concerns are the reasons for closure, with
disruptions in the supply chain being less of a factor.
5: Pakistan’s exports primarily comprise of textile products. These
exports are down since the Covid-19 crisis started, with some orders
even being cancelled which will create a long term negative impact on
economy.
6: Businesses will bear the brunt of a reduction in global demand for
their products and services. This impact may particularly be felt in
specific sectors such as tourism, but also amongst those SMEs catering
for local markets where containment measures have been introduced.
Measures to uplift the business sector of Pakistan after Covid-19:
The end of the lockdown will not spell a return to the old “normal”, nor
will it be universal. The opening will take different shapes, with
different countries, different regions, and different business sectors
opening up in different ways and at differing speeds. The virus still lurks
and the ability to contain its spread will dictate what happens next; any
resurgence will likely bring about renewed restrictions.
1: Companies will need to take a holistic approach to restarting. The
best approach is to develop a strategy; site by site, segment by
segment, customer by customer, and product by product—in order to
prioritize recovery opportunities. For example, through relocation of
assets. It may be appropriate to freeze some planned or ongoing
projects until the company has the capacity to reassess them.
2: Emerging from lockdown, clients will be more vigilant about health
and increase their demands on safety. Companies will need to provide
products and services that adhere to the most rigorous health and
safety conditions, and be able to show or explain them to clients.
3: Companies must also think about the unilateral communication they
intend to conduct on this risk with all players in their sector, in order to
prevent competitive approaches that destroy value.
4: Marketing departments must ensure that the offering is in line with
the crisis-related shift in demand. In the short term, this will mean
actively encouraging customers to interact through digital channels.
5: Strengthen company’s ability to anticipate and meet demand. This
includes adjusting the ramp-up speed to avoid generating new stocks of
finished products for which customers may be few and far between.
Embracing these actions can help them value-assure the restart.
Further, the transition to a “next normal” will require them to reinvent
their business models, even as they continue to respond effectively to
the aftershocks of the crisis.

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Assignment number: 01

Zoona Javaid Kiani

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