BCG Perspectives
Facts, scenarios, and actions for leaders
Publication #2 with a focus on:• Preparing for the restart
Version: 20 April 2020

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 17 April 2020 Version 2.1.

COVID-19

COVID-19

BCG Perspectives

COVID-19 is a global
societal crisis

Leaders need to drive an integrated
response to navigate the crisis

We at BCG believe that the COVID-19 outbreak isfirst and foremost a societal crisis, threatening lives
and the wellbeing of our global community. Society
now, more than ever, needs to collaborate to protect
people's lives and health, manage mid-term
implications and search for lasting solutions.

It is the duty of health, political, societal, and businessleaders to navigate through this crisis. A complex
interplay of epidemic progression, medical response,
government action, sector impact, and company actionis playing out jointly. This document intends to help
leaders find answers and shape opinions to navigate
the crisis in their own environments. It encourages
thinking across the multiple time horizons over which
we see the crisis manifesting itself.

Source: BCG

1

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Objectives of this document

Executive Summary | COVID-19 BCG Perspectives

Impact on sectors and business depends on intensity and shape of the health and economic recovery, especially in an extended fight phase• Economic indicators and forecasts signal a severe downturn; global equity markets continue to be challenged and unemployment rates are rising• The last weeks showed a bounce in equity markets and in Total Shareholder Returns (TSR), but credit risks remain in many sectors• It remains critical to understand the specific context and environment (e.g. geography, sector) to distill implications for future pathways of companies• There will likely be an extended phase of 'fighting' the virus with many investments to bring forward therapies/vaccines in the next ~12-18 months• Young consumers are largely worried about financial implications, but share positive sentiment about recovery across many geographies
Navigating the COVID-19 crisis, particularly an extended 'fight' the virus phase requires integrated action by governments and business leaders• Governments need to ensure that reopening activities are guided by national health, and economic and social priorities, allowing for local adaptation• Reopening requires careful preparation, for governments as well as business; e.g. Managing for a safe workplace also requires managing risks outside work
• Business leaders and governments can use this crisis as an opportunity to strengthen their cooperation for a united fight against the virus

We believe during this crisis, leaders need to be able to think along two dimensions:(1)Taking an integrated perspective on health/medical progression, governmental responses, societal
reactions, and economic implications to understand business/sector impacts and(2)Thinking multi-timescale (the now, near, and long-term future—in a flatten-fight-future logic).
Source: BCG

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The COVID-19 disease progression continues to be a global challenge to societies, but interventions are starting to show positive effects• Government measures to mitigate the spread are largely effective in slowing cases (doubling every ~10 days a week ago, to every ~15 days now)
• Testing is increasing, giving more transparency and control; in several countries, this is complemented by digitally enabled contact tracing• While some countries are extending lockdowns and social separation, a few countries have started to progressively lift restrictions

COVID-19 will be a journey with three distinct phases requiring
an integrated perspective
Fight

FutureTypically, the initial phase after a pandemic
outbreak – goal is to urgently limit numberof confirmed cases, especially critical care

Finding paths to collectively fight the virus,
restart the economy, and support society inbalancing lives and livelihood

Disease controlled through vaccine/cure/herd immunity, and treatment withinsustainable medical capacities possible

Social distancing (lockdown) and partial businessclosures outside a few, lead to economic
recession with large employment impact

Moderate economic activity with recovering
GDP, some business reopenings, and social
distancing on sustainable level

Reactivated economy with strong businessrebound and job growth, social restrictions
limited or completely suspended

1. Disease progression, health care system capacity, and response
2. Government policies and economic stimulus
3. Economic scenarios
4. Business engagement and response
5. Public engagement and response

Source: BCG

All of the above five factors result in specific economic and social outcomes in each phase3

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Flatten

1

COVID-19 Context and Development
Disease progression, health care system capacity, and response

2

Economic and Business Impact
and Scenarios
Economic response
Scenarios and key drivers
Business impact

3

Guide for Leaders
Determining government action
Considering ecosystem interdependencies
Navigating businesses through the crisis
4

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Updated20 April
20202020
Version
2.3. 2.1.
Copyright© 2020by BostonConsulting
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Updated17 April
VersionGovernment policies and action

1

COVID-19 Context and Development
Disease progression, health care system capacity, and response

2

Economic and Business Impact
and Scenarios
Economic response
Scenarios and key drivers
Business impact

3

Guide for Leaders
Determining government action
Considering ecosystem interdependencies
Navigating businesses through the crisis
5

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Updated 20 April 2020 Version 2.3.
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Group.
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Government policies and action

COVID-19 pandemic spread: Cases doubling every ~15 days1 globally

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

As of 16 April 2020

UK

USA

Italy

China
Iran

9th Apr'20

16th Apr' 20

7
days

10
days

15
days

Japan
South
Korea

India

2nd Apr'20# of days for doubling1 the cases globally

53k

95k

144k

Days of doubling cases:
0-3 days

3-6 days

183
Countries with cases2

6-14 days

2.2M[∆5%]3

Confirmed cases globally

14-30 days

144k

# of fatality cases>30 days[∆6%]3

Fatality cases globally

Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards and hence imperfect measures
1. No. of doubling days based on 7 day CAGR 2. Basis Johns Hopkins CSSE ; 3. Daily growth rate basis 7 day CAGR
Sources: Johns Hopkins CSSE, Our world in data, WHO situation reports, BCG analysis

150

163

164

# of countries with local transmission

6

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2.3.

FranceSpain

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

The week that was…

14 April 2020

7

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From 11 to 17 April 2020

Doubling days is an early indicator of the phase a country is in;flattening of the curve now evident in several countries

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

As of 15 April 2020

Flatten

Daily growth rate of total cases (seven-day average)

Total cumulative number of confirmed cases (log scale)15%

1,000,000

Fight

Singapore

100,000

India

10%

Spain
Italy
Germany
FranceIran

Cases doubling: 8 days

Japan

Switzerland
Netherlands
Portugal
Austria

Central & South America4
BrazilSweden5%

10,000UK

CanadaBelgium
AfricaPortugal

US
Netherlands Cases doubling: 14 days

100,000

1,000,000

Cumulative number of confirmed cases (log scale)
AfricaAsia1

Central & South America

EuropeIceland

1,000

Italy
Iran
Spain
Norway Austria
Germany
Iceland
Switzerland
South Korea
Greater China

10,000South Korea

NorwayFrance

0%
1,000

China

100

0

North America

1. Includes Middle East 2. Countries selected from the chart on the left 3. # of days after exceeding 100 confirmed cases 4. Excludes Brazil
Source: Johns Hopkins CSSE, Our World in data, WHO situation reports

10

20
Asia1

30

40

50
60
Number of days3

Europe8

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Rates improving from top to bottom

Countries2 with doubling rate > 14 days

Testing ecosystem is proliferating—across both
high-throughput in-lab and rapid near-patient tests

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

As of 16 April 2020

Not exhaustive

Test
purposeAvailable forlast 3+ weeks

Becoming available now(over last 1-2 weeks)Indevelopment

Lab-based
Presence ofviral genome

Immuneresponse tovirus

Near-patient/
Point-of-Care

Rapid, on-site
portable test

Handheld digital PCR

Lab-based

Near-patient/
Point-of-Care

Presence of viral particle

1. More that 90 serology test makers have notified FDA that they have serology tests available for use as of April 16, 2020
Source: CDC website, FDA website, company websites

Many players announced
development plans1
Biosensor, 1 min
result (early stageof development)

9

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ExamplesDISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

Continued ramp-up of testing across countries
As of 15 April 2020
# of cumulative tests per million people
100,000# of cumulative tests per million people
IcelandUnited Arab Emirates
Germany

10,000

Italy
Spain

RussiaTesting rates per million for countries2 acrossnational income levels3

10,000US
FranceSouth Africa

1,000South Korea

1,000

Japan
100

India

100

# of confirmed cases per million people
10
Africa

1

10
Asia1

Central & South America

100
Europe1,000

10,000

North America

1. Includes Middle East 2. Data corresponds to 37 of 56 countries represented in the chart on the left 3. As per World Bank classification
Source: World Bank, Worldometers.info, Our World in Data, Johns Hopkins

10

Mar 16

High income
countries

Apr 1
Lower-middle
income countries

Apr 13Upper-middle
income countries

10

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100,000

Several countries drive digitally enabled contact tracing toincrease speed to detect outbreak and protect people

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

As of 14 April 2020

Developed by Government | Voluntary | 1M+ downloads

Various contact tracing
apps launched:CountryApp

Down-loads% ofPopulation4

India

Aarogya
Setu

50M1

4%

IsraelHamagen

1.5M1

17%

Singapore

TraceToget
her

1M1

18%

South
Korea

Corona
100M

1M2

2%

Iceland

Rakning C19

150k1

40%

Austria

Stopp
Corona

100k3

1%

Czech
RepubliceRouška

50k3

0.5%

Germany, Australia, and several others arein advanced stages of launching a contact
tracing application
1. Basis Press Research 2. Google play link no longer available 3. Basis App Annie data base 4. Downloads as a percentage of population
Source: App Annie data base; Google Play store; Press research, BCG

11

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Example: Singapore's TraceTogether

Non-exhaustive list

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

As of 16 April 2020

Population:~96 Million
Area:331,210 sq. km

Select developing
economies areleading the way
in driving
containment

Kerala(India)Population:~34 Million
Area:38,863 sq. km

First patient: 23 January
Total cases: 268
Tests: 120k+
Recovered Cases: 177 (66%)
Deaths: 0 (0.0%)• Early border control (e.g. China as early as 3 January, Korea, Europe)• National risk assessment exercise in early January; guidelines issued when Wuhan
reported 27 infections• Strict govt. facilities/home quarantines leading to effective tracing and monitoring• Early precautions: Schools closed since 17 January• Entered nationwide “Strict Social Distancing Rule” on April 1

First patient: 30 January (first to report infections in India)
Total cases: 394
Tests: 10k+
Recovered Cases: 245 (62%)
Deaths: 3 (0.8%)• Mandatory quarantines weeks before any other state• Civil society leaders and call centers helped clear doubts and remove stigma• Monitoring teams in every village; 100,000+ under observation• Schools and colleges closed since 10 March• Daily briefings by top political executives ensured information flow and reduced panic
movement

Source: John Hopkins CSSE; Corona Control in Kerala –Snehil Kumar Singh; Press research; BCG

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VietnamRace for a cure: Significant progress being made acrosspreventative measures and treatment (antibodies, antivirals)

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

As of 17 April 2020

Ongoing
research

Preventive measures

Treatment of infection

Vaccines

Antibodies

Antivirals

Prophylactic measure to prevent
infection by training the immune
system to rapidly eliminate

Passive immunity by administering
neutralizing antibodies against
circulating viral particles in the blood

Act by preventing viral entry to cells or
inhibit viral replication within the cell;potential to leverage existing anti-viral Tx>30 under development globally>20

Early results likely in Q2 2020; use will
be limited to small scale/at risk groups

Early efficacy signals of Chloroquine based
compounds expected in Q2 2020

~80

under development globally,of which three are inpreclinical stage

Small-scale early access for a small
subset of patients possible in Q3 2020
assuming positive results

under development globally

Companies
Not Exhaustive

While significant progress is being made, treatments and vaccines may be many months away
Source: WHO, Company websites, Press releases, Fierce biotech, Genetic Engineering and Biotech press research

13

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Overview

Not exhaustiveCountries are acting to ensure potential resurgence is contained

DISEASE PROGRESSION,HEALTH CARE SYSTEMCAPACITY, AND RESPONSE

As of 12 April 2020

Previous pandemics like MERS
and the Spanish Flu had disease
resurgence two to three times# of confirmed cases
1,000

31 Mar: Statewide stay-at-homeextended till at least 30-Apr

Wave 1500

Spanish Flu

UK Deaths per 1,000 persons
30

nd

2

wave

0
8-Mar

22-Mar

5-Apr

Measures to curtail resurgence
Louisiana (US)• Ban on public gatherings of 50+ people• Closure of schools, bars, salons, cinemas,
gyms, casinos• Statewide stay-at-home order until at least
30 April20
3rd wave10# of confirmed cases

1st wave

100
0

6/29
1918

9/21

11/16

1/11

3/8

1919

400

2014 outbreakin Middle East

0
2013

MERS

2015 outbreakin Korea

200

2014

2015

2016

2017

Wave 150
0Number of monthly cases worldwide

23-Feb

2019

22-Mar

5-Apr

03 Apr: Circuit breaker/lockdown
Wave 1200
0Source: John Hopkins CSSE, Press Search,
BCG Henderson Institute Analysis

8-Mar# of confirmed cases
400

2018

08 Apr: Extended prohibition of
public gatherings

23-Feb

8-Mar

22-MarHong Kong• Continuing of shutdown/containment
measures• Closure of bars, salons, cinemas, public
places till 23 April

Singapore• Lockdown/shut downs for one month withhefty fines for violators• Shifting of healthy migrant workers to"floating hotels"• Masks mandatory for anyone leaving home

5-Apr
14

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Daily infections by countryGovernment measures continue to be enforced

US gets stricter in hard-hit areas; China, Spain, Denmark, Iran selectively opening up
As of 16 April 2020
SchoolclosureRestrictedassembly

Non-essential
business closure

International
travelrestrictions

Domestic travel
restrictions2

China

Non-essential
local mvmt.
restrictions

GOVERNMENT POLICIESAND ECONOMIC STIMULUS

Stricter social distancing norms
imposed in hard hit areas of US; New
York, California, New Jersey,
Connecticut
Spain begins lifting restrictions on 13
April with construction andmanufacturing workers resuming work

FranceSwitzerland
Italy
Iran

Denmark announces concrete plan
to lift restrictions; primary schools
to reopen from 15 April

Denmark
Germany
US

Iran allowed government offices
and business outside the capital
Tehran to open from 11 April

South Korea
Japan
UK

China lifted the lockdown
restrictions on Hubei allowing
people movement subject to green
code classification

TurkeyIndia
Extensions / New interventions post 31 Mar

Relaxation measures

Continuing interventions

1. Includes nationwide actions and actions taken by major local or regional governments. 2 Some German + US rail services are being reduced but not through government mandate
International travel restrictions flagged if any bans put in place or limits in place; Internal travel restriction includes reductions in public transport, or restricted access; Non-essential businesses include at least restaurants, entertainment
venues; School closures are any mandatory state closures; Assembly restrictions include mandatory and advised restrictions on large groups, restrictions on e.g. faith based gatherings; Non-essential local mvmt includes stated restrictions on
being outside or curfews | Source: Government and media reports
2. France, India and UK have extended the lockdowns starting week ending 18 April; whereas Turkey has a weekend lockdown. Denmark has allowed primary school toreopen; Spain has allowed non-essential businesses like construction and manufacturing workers to go back to work; US has instituted stricter social distancing norms; Iran has allowed government offices and businesses outside Tehran toturn operational; China has lifted Hubei lockdown allowing people movement
15

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Spain

1

COVID-19 Context and Development
Disease progression, health care system capacity, and response

2

Economic and Business Impact
and Scenarios
Economic response
Scenarios and key drivers
Business impact

3

Guide for Leaders
Determining government action
Considering ecosystem interdependencies
Navigating businesses through the crisis
16

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Government policies and action

Global equity markets trending upward but still at a lower mean;
unemployment rates rise

ECONOMICRESPONSE

As of 15 April 2020

Global equity markets varying
around a lower mean

Highest level of seasonally adjusted
unemployment claims in history
Initial US unemployment insurance claims (millions)

Inflection with virus' spread toEurope, USA and beyond
7

Cumulative returns (%)
5

6

Feb 21

0

5

-5

4

-10

3

-15
-20

Korea (KOSPI)

2

U.S. (S&P 500)

1

-25Japan (Nikkei 225)-30

UK (FTSE 100)

-35

German (DAX)

21 Jan 1 Feb

Steeper sell-off thanin 1929

1 Mar

Total of 22M initial
unemployment insurance
claims for last one month(3.3M, 6.8M, 6.6M and 5.2M
for the last 4 weeks)

1 Apr 15 Apr

More critical sell-off
than 30% in 20081

0

India (Nifty 50)
1970

1980

1990

2000

2010

2020

Higher volatility than
'08 credit crisis peak2

1. Financial Crisis S&P sell-off at comparable time frame: 26/09/2008 – 27/10/2008 and 19/02/2020 - 23/03/2020 2. Peak VIX recorded 16/03/2020
Source: OECD, Impact of the COVID-19 pandemic on global FDI and GVCs, UNCTAD, US Bureau of Labor Statistics, BCG

17

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Markets looked past virus'
spread in China

Economic forecasts point toward severe downturn

ECONOMICRESPONSE

As of 14 April 2020

EuropeForecast GDP growth vs. baseline before COVID-19

Forecast GDP growth vs. baseline before COVID-19

6.1% (10.4.) BAML
5.5% (10.4.) Goldman Sachs Group
4.7% (14.4.) IMF
3.4% (10.4.) ING Group
2.9% (10.4.) Credit Suisse
2.9% (10.4.) Danske Bank
2.4% (10.4.) Barclays
2.2% (13.4.) Citigroup

Baseline: 2.0%

Fitch Solutions (14.4.): -1.3%
JP Morgan Chase (14.4.): -3.4%
Standard Chartered (10.4.): --4.0%
UBS (14.4.): -4.5%)
Morgan Stanley (14.4.): -5.0%
Barclays (14.4.): -5.5%
Natixis (14.4.): -5.9%
HSBC Holdings (14.4.): -6.4%
IMF (14.4.): -7.5%
BNP Paribas (14.4.): -8.3%
Citigroup (14.4.): -8.4%

ING Group (10.4.): -7.0%
Nomura Securities (06.4.): -9.0%

2020

Baseline: 1.3%

2021

(DD.MM) format used
Note: As of reports dated 27 March 2020 to 14 April 2020
1. Estimated since GDP growth mentioned for second half of 2020 as average
Source: Bloomberg, IMF, BCG analysis

Forecast GDP growth vs. baseline before COVID-19

6.1% HSBC Holding (14.4.)
5.6% Credit Suisse (14.4.)
5.5% Morgan Stanley (14.4.)
4.7% JP Morgan Chase (14.4.)
4.7% IMF (14.4.)
3.5% Standard Chartered (10.4)
3.2% ING Group (14.4)
2.7% DZ Bank (27.3.)
1.8% UBS (14.4.)

Caixa Bank (27.3.): 5.5%
Danske Bank (03.4.): 5.2%

1.4% Baseline

Commerzbank (09.4.): 4.0%

1.4% Fitch Solutions(14.3.)
1.4% Danske Bank
(03.4.)`
Baseline: 6.0%

9.5% (09.4.) BNP Paribas
9.2% (09.4.) JP Morgan Chase
9.2% (14.4.) IMF
8.8% (03.4.) Nomura Securities
8.8% (10.4.) BAML
6.5% (07.4.) ABM Amro
6.3% (03.4.) Dankse Bank

5.8% Baseline

5.8% (07.4.) ING Group

Last week’s range

1.6% (06.4.) Visa

Last week’s range

1.7% Baseline

Last week’s range

Visa (06.4.): -1.1%
ABN Amro (10.4.): 1.4%
Danske Bank (10.4.): -2.0%
Credit Suisse (10.4.): -2.6%
Deutsche Bank (31.3.): -4.2%
Barclays (10.4.): -4.5%
JP Morgan Chase (10.4.): -5.3%
Morgan Stanley (03.4): -5.5%
BNP Paribas (10.4): -5.7%
IMF (14.4): -5.9%
BAML (10.4.): -6.0%
Rabo Bank (09.4.): -6.4%
HSBC Holdings (03.4.): -6.5%

China

ING Group (07.4.): 4.0%
Credit Suisse (09.4.): 3.3%
ABN Amro (07.4.): 3.0%
HSBC (03.4.): 3.0%
Morgan Stanley (03.4.): 2.0%
IMF (14.4.): 1.2%
JP Morgan Chase(09.4.): 1.1%

5.6% (09.4.) Credit Suisse

Nomura Securities (03.4.): 1.0%

2020

2021

2020

2021

18

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US

Scenarios and potential outcomes driven by five key questions
Shape may vary in depth and duration depending on country and sector composition of the economy

SCENARIOSAND DRIVERS

As of 14 April 2020

Illustrative

FlattenFight

Economic
activity100%

Re-start

Cure

1a

2a
3

2b

Some sectors

1b

Critical carepatients

Five questions
will shape theeconomicoutcomes

Source: BCG

1a1b

What will be the LENGTHof "Flatten"?
What are the preconditions totransition? When will we achieve them?

2aTo what DEPTH does the economy
drop in "Flatten"?

2bWhat will be the LENGTH of "Fight"?
What are the preconditions to transition?
When will we achieve them?

3
What LEVEL of recovery does the economy
achieve in "Fight"?

Where does the
economy return torelative to the preCOVID era in "Future"?

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Shut-down

FutureFlatten: Key scenario inputs and implications

SCENARIOSAND DRIVERS

Prelim figures for USA

As of 14 April 2020

Fight

Scenario overview

Future1aEconomic
activity

Critical carepatients

1b

Scenario
parameters

LENGTHof “Flatten”

DEPTH ofeconomic dropKey
scenario
drivers• Disease progression2• Government response3• Sector composition of
economy• Employment• Revenue loss/week• Hospital capacity• Societal adherence tophysical distancing

Potential
outcomes• Mid May (~7 wks)
• Mid June (~1o wks)
• Mid July (~13 wks)

• 15-20% loss
• 20-25% loss
• 25-30% loss

Example: Lockdown duration scenarios1

1.
2.

Lockdown duration based on empirically observed 4-8 weeks from peak infection. Does not reflect impact from peak infection per capita rate, local health care capacity, local
testing/monitoring capability or local government policies. Duration varies by state, but duration reflects March W3 start
Disease evolution, infection rate, fatality rate, mutation, etc. 3. Social/economic policies, immigration, fiscal and monetary stimuli, etc.

20

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FlattenFlatten: Scenario selection and impact driven by localized
geography and sector factors

SCENARIOSAND DRIVERS

Prelim figures for USA

As of 14 April 2020

1b

DEPTH ofeconomic loss

15-20% loss

2-3%

3-4%

3-5%

20-25% loss

2-4%

3-5%

5-7%

25-30% loss

3-4%

4-6%

6-8%

W2 MayW1 JuneW4 June(7 weeks)(10 weeks)(13 weeks)(Weekly economic loss)

Scenario and impact
outcome differs based on
geography and industry

1a

LENGTH of suppression(weeks)Example: Lockdown duration scenarios2

1.

Lower end of ranges rounded down and upper end of ranges rounded up to reflect uncertainty. 2. Lockdown duration based on empirically observed 4-8 weeks from peak infection. Does not reflect
impact from peak infection rate, local health care capacity, local testing/monitoring capability or local government policies.

21

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Annualized economic impact1

Total shareholder return (TSR) rebound over last 15-20 days
across markets and sectors

SCENARIOSAND DRIVERS

Two time periods from 21 February 2020 to 15 April 2020

Decline reflects economic scenario and consumer sentiment
TSR performance1

Americas2/21-3/20

3/20-4/15

Europe2/21-3/20

3/20-4/15

Asia
2/21-3/20

Observations

3/20-4/15

PharmaHealthier sectors

Household Products
Food & Beverage

Non-discretionary/essential service
less hit but still had recovery

Telecom
Semiconductors
Utilities
Health Equipment
SoftwarePressured sectors

Materials
Tech Hardware
Prof. Services
Transport
Capital Goods

Broad set of industries experiencing
pressure, with some regions
particularly affected for certain
sectors (e.g. transport in Europe)
Utilities and health equipment
generally better off in Asia

Retailing
Financials
Media
Insurance
Real Estate

Vulnerable sectors

Auto
Banks

Hardest hit sectors have rebounded,
but still negative TSR YTD

Hospitality
Durable Goods
EnergyNote: As of 15 April 2020; Based on top S&P Global 1200 companies; Industries are based on GICS definitions 1) Performance is tracked for two periods, first from 21 February 2020
(before international acceleration of outbreak) to 20 March 2020 (trough of the market) and from 20 March 2020 through 15 April 2020
Source: S&P Capital IQ; BCG Henderson Institute; BCG

22

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Food/staples Retail

SCENARIOSAND DRIVERS

Credit risk continues to be a concern for majority of sectors
Median 5-year CDS1
implied probabilityof default1
Food/staples Retail
PharmaHealthier sectors

Household Products
Food & Beverage
Telecom
Semiconductors
Utilities
Health Equipment
SoftwarePressured sectors

Materials
Tech Hardware
Prof. Services
Transport
Capital Goods
Retailing
Financials
Media
Insurance
Real Estate

Vulnerable sectors

Auto
Banks
Hospitality
Durable Goods
Energy

5%
3%
4%
4%
6%
6%
4%
5%
5%
6%
4%
5%
3%
5%
8%
6%
8%
6%
8%
12%
6%
12%
6%
13%

Number ofcompanies with
5-year CDS
probability ofdefault >15%
0
1
0
0
4
0
0
0
0
7
0
0
8
6
8
0
2
0
5
7
2
6
1
9

Companies in
distress (%)3
0%
5%
0%
0%
15%
0%
0%
0%
0%
15%
0%
0%
32%
10%
47%
0%
14%
0%
20%
33%
4%
43%
5%
26%

Observations

Hospitality, energy, retailingindustries facing greatest riskof default based on current
credit profile
Less discretionary sectors arelargely at lower risk of default
in current climate
Other sectors may
have individual companies in
specific default risk as well

Note: As of 15 April 2020; Based on top S&P Global 1200 companies; Industries are based on GICS definitions
1 Credit Default Swap; 2 Performance is tracked for the period 21 February 2020 (before international acceleration of outbreak), through 15 April 2020 3. Distressed comprises over
15% implied probability of default Source: S&P Capital IQ; BCG Henderson Institute; BCG

23

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

As of 21 February 2020 to 15 April 2020

Governments stepping in to provide impetus to stressed sectors
As of 15 Apr 2020

Loans/Guarantees/
Direct payments

Scrapping of charges

Grants for salaries

SCENARIOSAND DRIVERS

Other Benefits

Example: Aviation~$30B for airlines and cargo
carriers (excluding grant forsalaries)$10B in grants for Airports

Grants to ensure continued
operations; have to maintain
90% employment

Australia$3.2B 15-month incentive loan

Relief from airport fees
Forego fuel excise, air service
charge and regional security
fees

UK

Guarantee of 80% of loan upto
£5M

80% of the wages of any
employee

100% business rates holiday for
12 months

Singapore

Carriers and airport operators to Rebate on landing charges,
defer fee payment to government parking charges, and officeamounting to ~$140M
rentals at the airport

75% of the first ~$4,600 of
employees monthly pay

Rental relief for ground handlers,cargo agents
scrapping of property tax

Hong
Kong

HK$2 billion purchase scheme forhalf-million air tickets, as well as Waiver of aeronautical charges
buying back airport services
reduction on landing charges
equipment

Source: Government Websites; Press Search~$30B grant to continue salaries
for airlines and cargo employees

Fund for emergency loans;deferral of taxes

Lowered bank ratios to improveliquidity

HKAA (Public Airport Authority)
allowed 70% discount on rent for
airport concessionaires; subsidyof HK$1M for each large aircraft,
HK$0.2M for smaller planes
24

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

US

Focused support to small industries and services
Loans/Guarantees/
Direct payments

Example: Services

Tax rebates/extension

Grants for salaries/
Employee Retention

Other Benefits

US

SBA1 to pay all principal, interest
Deferred tax payments untiland fees on all existing SBA loan
Decemberproducts for 6 months

Australia

Guarantee of 50% for new,unsecured loans

Deferred tax payments by up to 4 $1,500 per fortnight permonths (ATO2)
employee for up to 6 months
Instant asset write-off threshold 50% wage subsidy of anincreased to $150k
apprentice for up to 9 months

Moratorium on evictions overnext 6 months for commercial
tenants

UK

Guarantee of 80% of loan up to£5M by British Business Bank

Additional 3 months to fileaccounts with Companies
Deferred VAT payments by 3months

HMRC3 to reimburse employers
up to 80% of the salary costs£10k one-off grant to businesses
Commercial tenants to beprotected from eviction

Singapore

Guarantee of 80% of loan up to$1M at 5% interest rate

25% tax rebate capped at $15k
and 15% property tax rebate

8% rebate of the wages for 3
months ($1.3B program)1 month of rental waiver tostallholders and .5 months toother tenants

Japan

Up to 100% loan guarantee
Increase in subsidies from 66.7%
Deferred tax payments by up to 1
Subsidies for capital investments
under a framework of up to 280M
to 90% for part-time pay and
year
up to 10M Yen
Yen
wages

India

INR 10M emergency working
capital loans within 48 hours;
3 month deferment of loan EMI5
repayments$349B paycheck –protection
program - 100% federally backed
loans of up to $10M

Pay 12% EPF4 contribution of

Tax payments deadline extendedby 3 months
employer for 3 months

1. SBA refers to Small Business Administration 2. ATO refers to Australian Tax Office; 3. HRMC refers to Her Majesty's Revenue and Customs;
4. EPF is Employee Provident Fund 5. Easy monthly instalments
Source: OECD. (2020); Press Search; SME Policy Responses

Loan advance up to $10k to
affected businesses without aneed to repay

Waiver of minimum accountbalance;reduced bank charges for digitaltransactions
25

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

As of 16 April 2020

SCENARIOSAND DRIVERS

Fight: Key scenario inputs and implications

SCENARIOSAND DRIVERS

Prelim figures for USA

As of 14 April 2020

Fight

Scenario overview

FutureScenario
parameters
Economic activity

2a2bDURATIONof "Fight"

LEVEL ofeconomicrecovery• Cure development/deployment timeline

Critical care patients• Health care, testing, and monitoring
capacity

Key scenario
drivers• Continued government response• Societal response to social distancing
measures• Economic result• Consumer behavior• Output of different industries

1. Based on vaccine treatment implemented; 2. Level of economic openness

26

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

FlattenDuration of Fight: Aggressive movement towardvaccine in 12-18 months

SCENARIOSAND DRIVERS

As of 15 April 2020

0

1

2

3

4
Commercial scale-up

Small-scale clinical trial material

Traditional paradigm
takes > 5 years

Discovery /screening

Scale-up at risk

Phase 1

Commercial scale-up

Phase 2Disc

Phase 1(10s patients)

Phase 3
(1,000s
patients)

Phase 2(100s patients)

Limited preclinical testing
Start Ph 2 withinterim Ph1 data

Phase 3

Commercial launch

Scale to support
global demand

Key success factors/indicators:

Small-scale clinical trial material

Potential accelerated
pathway for Covid-19
vaccine5Commercial
launchEmergency use
authorization for asmall volume release• Published safety data to show vaccine has
been well tolerated in healthy volunteers• Manufacturing scale-up beginning
immediately (expected ~6-12 month leadtime)
• Expansion of clinical trials to include
volunteers over 60 years old• Established a clear view on a surrogate ofefficacy (e.g. challenge model)

Potential animal
challenge study in parallel

Source: Company websites, BCG analysis, https://www.fiercepharma.com/vaccines/china-s-cansino-bio-advances-covid-19-vaccine-into-phase-2-preliminary-safety-data,
https://www.weforum.org/agenda/2020/04/bill-gates-7-potential-coronavirus-vaccines/, https://academic.oup.com/jid/article/doi/10.1093/infdis/jiaa152/5814216,
https://www.nature.com/articles/d41586-020-00927-3

27

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Timeframe (years)

Duration of Fight: Data from therapeutics will likely emerge
in a few months; drugs will likely reduce severity of infection

SCENARIOSAND DRIVERS

As of 15 April 2020

Remdesivir

Current use•

Ebola and othercoronaviruses(investigational)• Malaria and lupus
Hydroxychloroquine (Plaquenil)

Q2 2020

Q3 2020

Q4 2020

Gilead may apply for ultra-quick review ifearly trial data looks positive ; potential tosupply 140k treatment courses

Currently used undercompassionate use• Clinical data fromcontrolled trials showing
reduced hospitalization
time or infection level

If clinical data is positive, high potential
to scale production quickly

Currently used undercompassionate use

Tocilizumab(Actemra)•

Rheumatoid
arthritis

Likely to see data readout in Q3 2020 for
28-day controlled study

Sarilumab(Kevzara)•

Rheumatoid
arthritis

Trials with severe or critically ill patients
started in late March 2020

N/A (previously usedin H1N1 and Ebola
outbreaks)

Johns Hopkins team has begun to build a networkof 40 sites across 20 states to biobank plasma;scale will be a big limitation

Convalescent
serum
Synthetic
antibodies(i.e. producedin bioreactor)••

Results from the trials in the two New York
hospitals are expected around the end of April

N/A

Source: Company websites, WHO, https://milkeninstitute.org/covid-19-tracker

Key success factors/
indicators:• Demonstrated safety
profile at the dose required
to achieve efficacy• Bio-banking infrastructure
to support convalescentplasmaTargeting clinical trials to begin
in Summer of 2020
Expect to have capacity to provide small
scale access by late Fall 2020 (Regeneron)

Key:

Prelim. data

Early accessBroad availability

28

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Drug

Fight: Likely very different ramps by geography and by sector

SCENARIOSAND DRIVERS

China example
As of 07 April 2020

Figures for China

17-Jan12-FebCoal consumption
moving higher

12-Mar

10-Apr17-Jan12-FebProperty transactions
are restarting

12-Mar

10-Apr17-Jan12-Feb

12-Mar

10-AprAreas with early intervention show signs of V-shaped ramp;
Wuhan/Hubei trending toward U shape
Note: China data re-based for weekdays excl. weekends relative to start of Chinese New Year. Congestion delay index average include Beijing, Shanghai, Guangzhou,
Shenzhen, and Wuhan; Daily coal consumption of major power plants = sum of daily average coal consumption of Jerdin Electric, Guangdon Yudean Group, Datang
International Power Generation, and Huaneng Power International, Inc. Source: Wind, www.cqcoal.com, and BCG Center for Macroeconomics

29

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

People and goods arestarting to move againIn developed markets, younger consumers are concerned aboutvirus's financial impact, but confident about restart and recovery
US

Financial security

Strength in savings

Economic outlook

More worriedLess worried

WeakerStronger

Negative–20 ppAverage
20 pp–20 pp

20 pp–20 ppAverage

Gen Z
(18–
25)

Average

CanadaUK

Germany

France

Italy

Return to normalcy
Positive

Slower20 pp–20 ppFasterAverage

20 pp

Younger generations feel
more positive

Millennials(26–40)
Gen X
(41–
55)

Older generations
feel more secureBabyboomers+(56+)
I am worried about mypersonal finances due tothe coronavirusI have enough savingsto get throughThere will be an
economic recession due
to the coronavirusMy spending habits will quickly
return to normal after thecoronavirus is under control

Source: BCG COVID-19 Consumer Sentiment Survey, March 27–30, 2020 (N = 2,928 Canada; 2,985 France; 3,085 Germany; 2,150 Italy; 2,984 UK; 2,944 US), unweighted, representative within 3% of
census demographics. Note: Question text: “How much do you agree with each of the following statements about the coronavirus?”

30

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

As of 30 March 2020

BUSINESS ENGAGEMENT
AND RESPONSE

1

COVID-19 Context and Development
Disease progression, health care system capacity, and response

2

Economic and Business Impact
and Scenarios
Economic response
Scenarios and key drivers
Business impact

3

Guide for Leaders
Determining government action
Considering ecosystem interdependencies
Navigating businesses through the crisis
31

Copyright© 2020by BostonConsulting
Group.
All rights
reserved.
Updated 20 April 2020 Version 2.3.
Copyright© 2020by BostonConsulting
Group.
All rights
reserved.

Government policies and action

DETERMINING
GOVERNMENT ACTION

Several countries have already announced restart ambitions
As of 09 April 2020

Transition timeline from 'Flatten' to 'Fight' phase for selected countries

01.

08.

15.

Apr
22.

29.

05.

12.

May
19.

26.

03.

Denmark

Denmark: Proposing to lift some restrictions on
business and schools, ban on gatherings until 10 May

Czech RepublicCzech Republic: Planning to lift restrictions on some
home repair and household goods shops

Austria

Austria: Proposing to reopen small shops, large shops toremain closed until May

Malaysia

Malaysia: Proposing to reopen selected economic
sectors in phases, following strict hygiene rules

United States

United States: State-led reopening potentially starting
beginning of May

NorwayNorway: Proposing to resume some businesses, schools,
and travel

Germany

Germany: Planning to begin lifting restrictions for somebusinesses and shortly after for schools

Proposed re-entry plans dependent on disease evolution in each country
Notes: '(Began…)' refers to the start date of a country's lockdown, lockdown definition varies between countries; Italy, Spain
have announced some intention to lift some restrictions in April, but without specific dates statedSource: Lit search; BCG analysis

Start of lockdown
Potential start date of 'Fight' phase32

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Mar

Initial details of restartTo transition from 'Flatten' to 'Fight' phase, leaders need to think
through multiple key questions

Governments

Fight

Ecosystems

FutureBusinesses

How to balance containment
and mitigation withsocioeconomic recovery?

Under what context should
employees be allowed to return totheir workplace?

When is the right time to reopen?

Which employees should returnto their workplace?

What is the optimal sequencing
of reopening?

What interventions should betaken to ensure a safe work
environment?

Source: BCG

How to manage
uncertainty given winningrequires coordination ofmany stakeholders?

33

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

FlattenNational
government

RegionA

RegionB

RegionC

Municipalities

Private/public actors

Source: BCG

1

Establish and assign risk
levels to local regions

2

Develop discretionary
guidelines by risk level3

Regions establish oversightand 'control tower'4

Set specific policies at
local level5

Private and public actors
develop unique playbooks

DETERMINING
GOVERNMENT ACTION

National advisory guidelines articulate a common framing of risk
levels and provide practical advice on actions to take for each risk
level (transportation, gathering size, PPE, etc.)• Federal public health officials advise on disease management
activities by risk level• Risk levels a function of health care readiness (and in someinstances public engagement)

Actual sequence of reopening activities needs to go from deaveraged and responsive to locally driven, customized to on-theground facts• Result is decision-makers adopting different strategies forrecovery by locality based on how to best meet requirements forthe local risk level, and tailored to their local conditions

Governments should actively involve the private sector in creationof sector-specific playbooks to achieve guidelines including industry
associations, trade and labor unions, chambers of commerce

34

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Reopening activities need to be guided on a national level
and adapted to local realities

Local risk assessments determine need for applicationof differentiated guidelines
Each area is to be categorized into four riskclusters with varying degrees of openness

Red
Areas with high case load but low
growth rate of new cases

Case study: National guidelines in Germany vary byregion based on assessed risk
Mecklenburg-Vorpommern

Current case load1: 15/100k
Growth rate (7-day avg.): 1.5%
Population density: 69/km2

Extended lockdown
except for essential
goods and services

BayernCurrent case load1: 136/100k
Growth rate (7-day avg.): 2.7%
Population density: 185/km2

Yellow
Areas with no new cases in last
week and all prior cases isolated/
contained

Selectively open up andprepare for full opening

Green
Areas with no new cases in thelast 3 weeks and all prior cases
recovered

Open up to the extent
feasible while monitoringrisk of outbreak

In Bayern, an area with a comparatively higher current
caseload, growth rate, and population density,
restrictions are tighter and reopening of shops andschools will happen later than in the rest of Germany,such as Mecklenburg Vorpommern

1. Not all recovered cases get reported; Source: Bayerisches Landesamt für Statistik, Regierung Mecklenburg Vorpommern, Zeit, BCG analysis

35

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Severe Red
Areas with high case load, highgrowth, and high risk oftransmission

DETERMINING
GOVERNMENT ACTION

Governments need to get the preconditions for opening rightPublic/economic readiness

Diseaseconditions

Health carecapacity

Virus monitoring system

Business
preparation

Publicresponse

Government
preparation

Control of virus impact
in terms of case growthand disease impact(e.g. high risk
populations)

Adequate supply of
hospital supplies,
trained workers,
treatment spaces

Widespread virus
testing relative to newcase volume, serologicaltesting, and contact
tracing

Workplace healthprotocols and businessreadiness

Training and availabilityof hygiene products
and PPE; highcompliance rates

Federal framework for
public health, sectors,
and global politics

Leading indicator thatmeasures are effective,
public health isprotected

Capacity sufficient tocare for COVID-19 andother healthneeds

Testing to inform
decisions, resource
allocation, and outbreakresolution

Businesses ensure
workplace safety for
those returning to
work

Public educated andempowered to adhere to
guidelines, play role incontainment

Clear guidance,
expectations, and legal
protection for system
actors

Source: BCG analysis

36

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Health care readiness

DETERMINING
GOVERNMENT ACTION

DETERMINING
GOVERNMENT ACTION

Five different factors should inform the sequencing decision

Example Country

Weekly income at risk and virus resurgence risk factors
are two starting considerations
1

1

Virus resurgence

Virus resurgence risk factor

35
2
3

3

Employment: 500k jobs

Arts and entertainment

Income at risk
Accommodation & food

Employment
30

However, additional considerations
play an important role, too

3

Stage
Three

2

Stage
Two

1

Stage
One

Education

Finance, insurance & RE

Other services

Wholesale & retailTransport

25

Construction
Professional services

4

Geographical specificity

Resources & utilities
Manufacturing

5

Sector interconnectedness
0.0

0.5

Note: The virus resurgence risk factor takes into account frequency of contact, contact with external customers, physical proximity during
interactions, likelihood of exposure to illness Source: BCG analysis

1.0

1.5
2 Weekly income at risk
during major lockdown ($B)
37

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Three factors are primary determinants
for country-specific sequencing

CONSIDERINGECOSYSTEM INTERDEPENDENCIES

Ecosystems and a global view will be required as economies open

Illustrative

1

Metals imported, rare earth metals
mined in China

2

Components like silicon wafers, chips,
and PC boards made in SEA, China, andUS

3

Larger assemblies fabricated in the
US, Taiwan, Japan, and Philippines

4

5

LCD Screens(South Korea)
2,3
1,2,
4,5

Final assembly and testing in
Chongqing
Products shipped through Chongqing
Port/Shenzen Port worldwide

Silicon mining
1 (China)
3

3

Batteries(Japan)32Components(Southeast Asia)

1
1
Mining: Cobalt, niobium,
gold, lithium, platinum

Note: Based on Dell/Apple laptop supply chains
Source: BCG research38

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Global integration of electronics
supply chain – key regional steps

Existing industry associations can bridge the gap between
governments and companies to set standards

Suraksha stores: Public/private partnerships toensure safety and hygiene practices

Business for South Africa (B4SA) is a conglomerate ofbusinesses and leaders

Government sets up 2 million 'Suraksha Stores' to provide daily
essentials to citizens

Its purpose is to jointly develop a strategic and sustainable
response to COVID-19

The initiative will convert small shops to retail outlets selling
daily essentials

B4SA works in close collaboration with the government, themedia, and NGOs

India's top 12 packaged consumer goods companies support theimplementation

It consists of four workstreams:

Each company will be given one or twostates to execute this plan
effectively
Companies include:

Health care

Economics

Labor

Communications

Source: The Economic Times, Business Standard, BCG

39

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Business for South Africa: Companies acrosssectors joining forces to define COVID response

CONSIDERINGECOSYSTEM INTERDEPENDENCIESGuiding principles
for leadershipin crisis

Be visible, purposeful,and authentic

Leverage the principleof “commander’s intent"Communicate in ways that engage andincrease the relevance of your teams
and clarify the reasons underlying yourcommunications

Share only key objectives and rationaleof required actions to allow theorganization to be flexible and adaptive,
and allow a focus on execution“THESE are the times that try
men's souls. The summer soldier
and the sunshine patriot will, in
this crisis, shrink from the serviceof their country; but he thatstands by it now, deserves the loveand thanks of man and woman.
Tyranny, like hell, is not easilyconquered; yet we have thisconsolation with us, that theharder the conflict, the moreglorious the triumph."

Use multiple clock-speeds

Engage externallyThink on multiple timescales byconsidering the now, the next, and thelater. Ensure that leadership teams lookahead and prepare for the future

Communicate with customers andstakeholders to gather frequent, fresh,
firsthand information to adapt andrespond effectively

Cut through bureaucracy

Keep imagination alive

Assemble a multi-functional task force
that is empowered to make decisions
and suspend normal decision protocols

Look out for new needs and opportunities
to serve clients now and beyond the crisis.
We will not be reverting to a 2019 reality

Thomas Paine, The Crisis

Source: When Leadership Matters Most, BCG Henderson Institute40

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

NAVIGATING BUSINESSESTHROUGH THE CRISISHome environment/
community
Employees might have exposure to otherpeople in their home environment likefamily, roommates, or people they have tocare for (like grandparents); or live inmore densely populated communities

Source: BCG

Employees commute towork via public/grouptransport where they are
exposed to other commutersin confined space like buses

Commute from/to work

NAVIGATING BUSINESSESTHROUGH THE CRISIS

Employees interact with
their colleagues orclients at the workplace
depending on the type of work
and workplace

Workplace41

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Business leaders need to consider their employees’ risk profile
holistically, not take an isolated view of the workplace

NAVIGATING BUSINESSESTHROUGH THE CRISIS

To know more
about the9

Establish crisis
management

action areas
for businessleadersrefer to theprevious edition

Navigatethrough
Flatten, Fight,
and Future

Scenario-Based
1 Develop
Planning Approach to
manage uncertainty

Fight

Futurea Rapid Response
2 Createand Transformation(RR&T) team

Organization and
3 Revamp
People for the new normal

Cost, Cash, and
6 Manage
Liquidity

Topline Security
4 Driveand Customer trust

Stronger; drive
7 Emerge
advantage in adversity

and restart Supply
5 Stabilize
Chain, Manufacturing

Digital and8 Accelerate
Technology transformation

Society during
9 Help
COVID-19

Note: RR&T = Rapid Response and Transformation Team
Source: BCG

42

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

FlattenDetailed measures across priority action
areas (1/3)
Establish crisis
management

12

Develop Scenario-Based
Planning Approach to
manage uncertainty

Create a Rapid Response
and Transformation(RR&T) teamNavigate throughFlatten, Fight, and Future

3

Revamp Organization
and People for the newnormalFight• Deep-dive into possible outcomes of disease spread, demand
shifts, supply/ops issues, regulatory requirements, andpotential operations restart; adjust for sector-specific issues• Perform scenario stress tests around cash-flow• Establish preconditions for what it will take to get workforce
back to offices, factories, etc.
• Set up teams to work on different time horizons (flatten, fight,
future) to avoid reverting to crisis management across all• Frequently run scenarios and update plan; focus
on understanding the de-averaged impact bygeography and line of business, depth of demand
drop, duration of Fight phase• Develop recommendations for daily planning,
resources, supply chain, workforce, and otherstakeholder management as per modeled
scenarios• Establish nimble cross-functional Rapid Response &Transformation team (RR&T)• Refine processes to manage the crisis situation, remote
working, disruption in supply• Ensure smooth transition of operations and workforce tothe 'new reality'• Shift to digital/remote customer interactions• To manage the massive complexity of "restarting",enhance Rapid Response & Transformation teamstructures• Develop approach for how to bring people back towork, how/when to engage customers• Establish governance and standardization toeffectively coordinate other areas from the RR&T

• Define policies to keep employees safe with high morale• Engage across levels to retain talent• Move to online/remote working; redefine rosters and train
for efficiency/effectiveness• Establish preconditions for coming back to the working
environment; clearly communicate• Build SWAT teams to address critical business areas,such as product launch, digital channel redesign, retaildelivery models• Get ahead of the curve on team to manage policies
to get teams back to work safely• Take a clear view of forward demand and the newnormal: manage/restructure organization to fit
capacity needs• Create dedicated focus to accelerate digital,
process automation, new ways of working

Source: BCG

Future43

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Flatten

NAVIGATING BUSINESSESTHROUGH THE CRISISDetailed measures across priority action
areas (2/3)
Flatten

NAVIGATING
BUSINESSESTHROUGH THE CRISISFight

Future4

5

6

Drive Topline Security &Customer Trust

Stabilize & restart Supply
Chain, Manufacturing

Manage Cost, Cash, &Liquidity• Reach out to customers for their situation and needs,• Drive actions to inspire confidence and ensure ability todeliver (e.g., multichannel, people-light approaches)• Manage volatility in demand, and refine sales motions(e.g. to virtual) and objectives• Assess changes in customers' behaviors• Adapt and transform channels(e-commerce), sales, marketing spend, pricing,and support• Ramp up commercial efforts significantly to
seize market shifts; leverage learnings toaccelerate digital capabilities• Take measures to ensure operations continuity:
Workforce safety and management, stop-gap measures
for supply chain, site readiness (access, maintenance,services, suppliers)• Ensure open and direct communication with employees• Explore solutions to retain key talent• Ensure quick and safe restart of facilities; drive
centrally driven efficiency measures• Set up capabilities (org, control tower) tomanage unstable supply chain; explore alternate
networks, dual/multiple suppliers for criticalgoods and services, delivery methods, etc.
• Accelerate production as demand rebounds;
account for product shifts• Build forecasts for COVID-19 impact on P&L, balance
sheet, investor base
• Review capital sufficiency scenarios and possible effects
on credit risk
• Manage credit and debt commitment for short term
• Create agile FY20-21 business plans and budgets to deal
with uncertainty• Build central team to simulate financials as per
evolving scenarios; drive agile working ways
• Decisively take structural actions: TURN PMO,
zero-based budgets, delayering/restructuring,
re-base tech portfolio, etc.; deploy rapidly as
speed is predictive of success in downturns

Source: BCG

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Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Navigate throughFlatten, Fight and FutureDetailed measures across priority action
areas (3/3)

7Emerge stronger; drive
advantage in adversity

8

Accelerate Digital &Technology transformation

9

Help Society during
COVID-19

FlattenFight• Stress-test current value proposition and business
offerings, and scan crisis impact on key
customer/market trends• Plan for new projects to shift the portfolio andleverage the 'new normal'; plug capability gaps
• Identify white spaces in own industry andecosystem• Selectively invest in areas where opportunistic
M&A can be conducted• Develop and implement strategy to exploit
greater talent availability• Address and serve immediate workforce needs forremote working• Leverage tools for conducting key processes online• Adapt traditional processes to become digitally viable• Identify and implement key digital use cases andadapt to agile way of working• Accelerate use cases to meet demand shifts• Redesign key customer journeys with emphasison digital interventions• Ensure immediate support to employees, suppliers,
communities, etc.
• Team with government/local communities/acrossindustries to address crisis• Leverage assets, supplier relationships, logistics
networks, and employees to help adjacent communities• Work across industry boundaries to identify crosssectoral synergies to deploy solutions• Determine how to contribute in the crisis toemployees, customers, through medical response,
supply of essential items for society, or by playing a
positive economic/employment role
• Allocate innovation resources where possible tofocus on solutions to COVID-19 crisis• Leverage expertise developed to support
government policies and responses, rebuild
business for local customers, suppliers, etc.

Source: BCG

Future45

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 20 April 2020 Version 2.3.

Navigate throughFlatten, Fight and Future

NAVIGATING
BUSINESSESTHROUGH THE CRISIS

Additional perspectives on COVID-19
Selected sector publications

People & Organizations

Strategy

Transportation & Logistics

Airlines

Public Sector

How to protect your workforce
during the COVID-19 pandemic

Sensing and shaping thepost-COVID era

Transportation and logistics
companies must adapt to keepsupplies moving

The post-COVID-19 flightplan for airlines

Governing in the timeof coronavirus

Economic Impact

Crisis Response Checklist

Health Care

Consumer

Telecommunications

Understanding the economic
shock of coronavirus

Checklist

COVID-19 Is Stressing the
Finances of Even the Strongest
US Health Systems

COVID-19 Consumer
Sentiment Snapshot #5

Time for action: In times of
COVID-19 Telcos need tomove rapidly to be part of thesolution

Operations

Technology & Digital

EnergyFinancial Institutions

Automotive

Building the Bionic Supply Chain

The Rise of the AI-Powered Company in
the Postcrisis WorldHow Uncertainty Is Hitting
M&A in Oil and Gas

How Should FIs navigate the
COVID-19 Crisis

COVID-19’s Impact on the
Automotive Industry

Source: BCG

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Selected overarching publications

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