Coronavirus and the world of business

Year 9 Pupils in Business Studies have been asked to consider the Coranavirus Crisis and its impact on Businesses – in particular they were asked to:

  1. Identify and explain how three businesses of your choice have been affected negatively by the coronavirus crisis.
  2. Identify and explain how three businesses of your choice have been affected positively/may have benefited from the coronavirus crisis.
  3. Explain 3 ways how businesses are responding to reduce the risk from the economic crisis caused by the coronavirus.
  4. What is an exogenous shock? Can you give a definition and some examples?

Here are some particularly good examples.

Business and the Coronavirus Crisis

By Bikrant, Year 9

  1. Restaurants without takeaways have been negatively affected as gatherings of more than 2 people have been banned meaning that restaurants have to close as many people sit down and eat and a lot of people together is dangerous as the virus can spread. As some restaurants don’t have takeaways it is a huge loss as they can’t make any money due to them not having any service of delivering food to homes or their customers can’t come and pick up food. So restaurants don’t have any source of income causing them a loss.
    Airports and airline services are also taking a big loss as many airlines have closed and the only airlines being used are the ones that are used by countries to bring home stranded citizens. The only source of income is from those countries asking them to bring back their citizens. People that do the baggage handling are out of jobs and so are staff working in airports.
    Hotels and B&B’s are suffering a loss as airports are closed and there are no people coming into the country so there are a lot less people looking for hotels. Huge hotels are closing and local B&B’s are not taking extra bookings. This links back to the airline services and airports with travellers not looking for places to stay as there are none coming into the country and most tourists have already returned to their homes safely.
  2. Video streaming apps like Netflix have been affected positively as more people are at home and get bored so they decide to go on Netflix and more are subscribing increasing the viewers on Netflix and their revenue has increased as more people are paying to have Netflix to pass their time at home.
    Delivery companies like DPD are also benefiting from the crisis as more people are ordering produces and services instead of going out mainly because people are not allowed to go outside for unnecessary things. So people order things online as some see it safer because the public are not going outside but instead delivery drivers drop parcels off at the door. Delivery companies are getting more orders so they are benefiting hugely from this crisis as well.
    Sports and fitness products have also seen a rise in sales as people want to keep fit at home during this lockdown so they are buying sports equipment. So some fitness equipment that didn’t sell before are now selling. This increases the revenue of companies that had equipment that normally wouldn’t sell. Companies like Sports –Tech are making a lot of money during this coronavirus as more people are aiming to stay fit and healthy.
  3. Businesses are furloughing workers meaning they are still on a payroll and are not being laid off. They get 80% of their pay and can earn up to £2500 in some cases. Businesses are shifting as many employees as they can to work at home meaning everyone stays safe and still get to essentially go to work. Some businesses are changing their production for social purposes. Brewers are making sanitizers and big companies like Rolls Royce are making ventilators so they can be used in hospitals.
  4. An exogenous shock is an unexpected or unpredictable event which affects the economy in a good or bad way. For example, natural disasters, diseases and war are all examples that cause an exogenous shock.

Business and the Coronavirus Crisis

By Ria, Year 9

Identify and explain how three businesses of your choice have been affected negatively by the coronavirus crisis.

All businesses have been affected negatively from the crisis but some have been affected more than others. The three businesses of my choice are hotels and B&Bs and the self-employed.

Hotels and B&Bs are losing out on money because hotels are losing out on money due to lack of booking. Major hotel have closed due to lack of booking and the circumstances not being safe for any of the workers. Cinemas and theatres have closed due to the Government closing all non-essential stores. This has had an knock-on effect on the film industry because due to cinemas and theatres being closed films that were going to be released have had to be postponed because none of the cinemas are open so no one will be able to watch the films therefore the company would not be able to earn back the money spent on the film whilst earning some profit too. The self-employed have been really damaged because they have fragile companies that only work due to people needing services. However, due to the pandemic people are no longer requiring these services so the self-employed sector has seen a rapid decline in the amount of customers they get. Most self-employed workers do not have a backup income which means that if they do not have enough customers they cannot get any profit that so they don’t have an income which means that it can become difficult for that person or family to survive

Identify and explain how three businesses/products of your choice have been affected positively/may have benefitted from the coronavirus crisis.

Even though many businesses have had major losses some have benefitted such as healthcare stores, video streaming companies such as Netflix and Amazon Prime and household cleaning product companies such as Dettol or Mr Muscle.

Healthcare stores have benefitted because people need to stock up on products to keep their houses clean so more people are going to buy the products so the company would make more profits compared to what they normally would.

Streaming companies have benefitted because more people are stuck at home and have more free time than they normally had so they can watch more shows and films than they normally would. They also might have had more business because more people probably bought subscriptions to have something to watch. These additional subscriptions means they can gain more profit due to having more customers.

Household cleaning companies have also benefitted because more people are buying products to clean their houses and they are buying more than they normally would in one purchase because they can’t leave their houses as often as they could before.

Explain 3 ways how businesses are responding to reduce the risk from the economic crisis caused by the coronavirus.

All businesses worldwide have had their won response to this pandemic. Each business has done what suits them best. Whether it being closing then later on claiming a grant to cover the losses or by keeping workers on reduced payroll even if they aren’t working.

All major UK plant companies have closed down as their production lines have slowed down due to a decrease in demand for their products as other goods or services matter more than cars for example. Some companies have decided to keep their workers on their payrolls even if they aren’t working instead of making them redundant which is helpful because it means that that person will struggle less to survive during this time because they still have a monthly or weekly income to help cover their costs. Other businesses who are still working may have made their workers work from home especially if all their work is online anyway because it is easier, safer and more convenient.

What is an exogenous shock? Can you give a definition and some examples?

Exogenous shock is when an unexpected or unpredictable even effects the economy negatively or positively. Some factors that can affect the economy are: wars, natural disasters and pandemics.

Head of Business Studies | + posts

Mr G Bowen is the Head of Business Studies at St Thomas More Catholic School.