BCG Perspectives
Facts, scenarios, and actions for leaders
Publication #4 with a focus on
Accelerating Digital & Technology Transformation
Version: 1 May 2020

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

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 midterm 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
action is playing out. 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

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Objectives of this document

NAVIGATING BUSINESSESTHROUGH THE CRISIS

Establish crisis
management

9

action areas
for businessleaders(RR&T) teammanage uncertainty

Topline Security
4 Driveand Customer Trustand restart Supply
5 Stabilize
Chain, Manufacturing

Futurea Rapid Response
2 Createand Transformation

Scenario-Based
1 Develop
Planning Approach toOrganization and
3 Revamp
People for the new normal

Navigatethrough
Flatten, Fight,
and Future

Fight

6

Restructuring Cost,
Managing Cash, & Liquidity

Focus offutureedition

Stronger; drive
7 Emerge
advantage in adversity

Digital and8 Accelerate
Technology transformation

Focus ofthis
editionSociety during
9 Help
COVID-19

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

2

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

FlattenExecutive Summary | COVID-19 BCG Perspectives

Significant impact on economy, sectors, and business; consumers moving online drives need for accelerated digitization•Flatten: Shut-down of 'non-essential' activities can put estimated 10-30% of economic activity and 15-35% of jobs at risk temporarily1 (GER, FR, IT, ES, US)•Fight: 5-20% of economic activity and 5-20% of jobs can be temporarily1 at risk– implying protracted economic challenges (GER, FR, IT, ES; US)•Accelerated movement toward vaccine or treatment at scale could limit Fight phase to 12-24 months•Economic forecasts indicate significant downturn in 2020; global rebound to pre-COVID levels not expected before 2021
•One-third of consumers plan to increase online spending, especially those living in most affected and urban areas•Crisis expedites urgency of digital transformation—"more urgent priority" for >75% of companies across industries
COVID-19 crisis may become a step-change moment for digital, together with restructuring efforts across industries•Many of the behavior shifts we are seeing today are expected to persist beyond the crisis; a huge uptick in digital activities is seen across allindustries•CEOs need to navigate digital imperatives to address near term response to crisis and mid-term resilience

We believe during thiscrisis leaders need tothink along two
dimensions:1

Taking an integrated perspective on
health/medical progression, governmental
responses, societal reactions, andeconomic implications to understandbusiness/sector impacts

2

Thinking multi-timescale
in a flatten-fight-futurelogic

1. Impact only for duration of specific phase (Flatten and Fight). Only accounting for first order effects of microeconomic data and subject to change, e.g. as governments act
Source: BCG

3

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Several countries are currently flattening the curve and all need to be actively ensuring containment•Globally, about 30% of COVID-19 patients have recovered; case doubling rate improved to 25 days
•Many countries are flattening disease spread curve (i.e. doubling rate > 14 days); risk of resurgence looms, but actions being taken to proactively manage•Governments are monitoring the situation using multiple means, incl. digital technologies; choices depend on privacy and security considerations

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 new 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, lead to economic recession with large
employment impact

Increasing 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

All of the above five factors result in specific economic and social outcomes in each phase
Source: BCG

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Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Flatten

1

Guide for leadersFresh insights: messages for leaders2

Updated epidemic, economic, andbusiness scenarios and impact
Preconditions for restart
Economic impact
Business impact

3

Appendix: Detailed action areas
and further readings
Detailed action areas for business leaders
Further readings

5

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

This week's focus: how to accelerate Digital & Technology transformation

27 April 2020

6
Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

What is happening around the world

From 24 to 30 April 2020
26 April 2020

Disease Progression | ~30% reported recoveries1 globally so far;case doubling rate improves to 25 days
As of 29 April 2020

UK

USA

Italy

China
Iran

22nd Apr '20

29th Apr' 20

8
14
days

12
19
days

18
25
days
days

Japan
South
Korea

India

15th Apr '20# of days of doubling2 the cases globally

511k
(25%)

Days of doubling cases:
0-3 days

183
Countries with cases3

710k
(27%)

973k
(30%)

Total # of recoveries (as % of confirmed cases)
3-6 days

6-14 days

3.2M[∆3%]4

Confirmed cases globally

14-30 days

228k

>30 days
55
23

34

67
48

[∆3%]4

Fatalities globally# of countries with community transmission5

Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards and hence imperfect measures
1. Refers to total reported recoveries as a percentage of total reported infections (cases) 2. No. of doubling days based on 7 day CAGR 3. Basis Johns Hopkins CSSE 4. Daily growth rate basis 7 day CAGR 5.
Community transmission defined basis WHO - countries experiencing larger outbreaks of local transmission on basis of decided factors
Source: Johns Hopkins CSSE, Our world in data, WHO situation reports, BCG analysis

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FranceSpain

Disease Progression | Many countries are flattening the curve
As of 29 April 2020
Daily growth rate of total cases (seven-day average)

10%

Total cumulative number of confirmed cases (log scale)for countries2 with doubling rate > 14 days
US1,000,000
Mexico8%

RussiaSingapore

BrazilSpain

Cases doubling:
10 daysUK
Germany
FranceIran
China
CanadaBelgium
Netherlands
Switzerland
Portugal
SwedenAustriaJapan

100,000

India

6%
South Africa

4%

2%

Fight

0%
100

Asia1

Cases doubling:
14 daysCanadaCases doubling:
Netherlands
Sweden21 daysUK
US
BelgiumJapan
Germany
Portugal
Iran Spain
Norway Austria France
Italy
South Korea
Switzerland
IcelandChina

10,000

NorwayNorth America

South America

South Korea

Iceland

1,000

10,0001,000,000
Cumulative number of confirmed cases (log scale)
EuropeItaly

Africa1. Includes Middle East 2. Countries selected from the chart on the left 3. # of days after exceeding 100 confirmed cases
Source: Johns Hopkins CSSE, Our World in data, WHO situation reports

100

0

20

40

60
Number of days3

Asia1

EuropeNorth America

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Rates improving from top to bottom

FlattenDisease Progression | Risk of resurgence but actions being taken

Daily infections by country

Measures to curtail resurgence# of confirmed cases

07 Apr: Japan declares
COVID emergency

1,500
1,000

• Employers to reduce the number of employees
in workplaces by 70%

500• Facilities housing education, exercise, exhibitions,and recreation have been asked to close

Spanish Flu
UK Deaths per 1,000 persons
30

2nd wave20
3rd wave

10
0

0

1st wave

June1918

Sept1918

Nov1919

Jan191923-Feb15-Mar

5-Apr

29-Apr

22 Apr: Extended social
distancing measures

Number of monthly cases worldwide
400

2014 outbreakin Middle East

0
2013

50

2015

2016

2017

2018

2019

• Ban on gatherings of 4+ people extended to
7 May; fines up to $25k for violators• Extension of immigration restrictions (14 days’
compulsory quarantine) by 1 month to 7 June0
2014

Hong Kong• Closure of bars, pubs, gyms, leisure, andoutdoor activities until 7 May

2015 outbreakin Korea200• 14 countries added to entry-ban list (in addition to70+ countries); restrictions extended to end ofMay

Mar1919# of confirmed cases
100

MERS

Japan

23-Feb15-Mar

5-Apr

29-Apr

Source: John Hopkins CSSE, Press Search, BCG Henderson Institute Analysis

9

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Previous pandemics like MERS
and the Spanish Flu had disease
resurgence two or three times

As of 29 April 2020

Government Response | Widespread use of digital technologies in crisis response;
choices depend on privacy and security considerations
As of 29 April 2020

Non-exhaustive list

Alert

Track & Trace

Community Support

Collaboration

Use of technologies(IoT, Analytics, Robotics,
Imaging) to aid detectionof cases based on physicalsymptoms, history

Use of communicationtech (Chat-bots,
Webpages) to share
information including
disease alerts, treatment,
and testing centers

Use of modern
computing (GPS,Bluetooth) to tracecontact with patients/
high-risk individuals

Coming together of thecommunity (individuals,
local groups, organizations
and scientific community)
on crisis response

Use of technologies(AI, Big Data, Performance
Computing) to enable
collaboration acrossboundaries

China

Australia

South Korea

IrelandUSA

Smart robot patrols

Coronavirus Australia app

Corona 100m app

MyWelfare portal

AI enabled research dataset

UK

Singapore

India

SingaporeEU

C-19 symptom tracker

FluGoWhere website

Aarogya Setu app

MaskGoWhere portal

Big data hub for R&D

Vietnam

UK

Australia

USA

South Korea

NCOVI health monitoring

GOV.UK Notify portal

COVIDSafe app

COVID-19 high performancecomputing consortium

AI-enabled testing kit
development

Deep dive on next page
Source: BCG

Virus monitoring solutions
10

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Select examples

DetectGovernment Response | Australia example—a privacy centric approach
used to design the Track & Trace solution
As of 29 April 2020

COVIDSafe
Australia's
contact tracing
solution

Key features
Voluntary use only
Limited data captured1
Stored on app for 21 days only2
Double consent required before sharing
APIs3 from Google and Apple not leveraged

Will the application record any
location data?
What personal information
will be collected by the app?

Where will the data be stored?

Who will decide to upload
the data?
How will potentially exposed
citizens be notified?

Optional

Mandatory

No location data
recordedPhone number
only

Location data
recordedPhone num.
& basic data

Local ondeviceCitizen makes decision
to upload data

Manually via
phone call

Phone number &detailed data4

HybridCloud

Data uploaded
automatically

Automatically via SMS or
In App Notification

1. Name, age range, postcode, mobile number 2. Bluetooth, with anonymous reference identifiers
3. Application Programming Interface 4. For example DOB, address and/or travel history in addition to basic
demographics
Source: Publicly available media and government websites

11

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Will use of the application be
mandatory or optional?

Government Response | South Korea example—focus on building
a connected and comprehensive track and trace solution
As of 29 April 2020

“Smart City”
Database

Tracking wristbands

GPS tracking andlocation-based alert1

Connects to apps
via Bluetooth

Enables symptom reporting andcontact with case workers

Alerts officials if person leaves
the home or destroys the bandVideo surveillance

Credit card transactions

CCTV cameras enable contact
identification

System tracks movements basedon credit card transaction data

High density of tracking: 1
camera per 6.3 people

Real-time data
feeds on patients, reduces
patient trace time from1 day to 10 minutes

Data submitted by 22 credit
card operators in 10 minutes

1.Travel history in addition to demographics and phone number
Source: Reuters: Ahead of the curve: South Korea's evolving strategy to prevent a coronavirus resurgence, 15 April 2020; The Straits Times: Coronavirus: South Korea to strap tracking wristbands on those who violate
quarantine orders, 11 April 2020; The Korea Herald: South Korea’s best method of tracking COVID-19 spread: credit card transactions, 9 April 2020; The Conversation: Coronavirus: South Korea’s success incontrolling disease is due to its acceptance of surveillance, 16 April 2020; App Annie data base; Google Play store; Press research, BCG
12

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Smartphone app

Scenarios and potential outcomes | Five key questions
As of 29 April 2020

Illustrative

FlattenFight

Economic
activity
100%

Restart

Cure

1a

2a
3
2b

Potential pathways

1b

Critical carepatients

Five questions
will shape theeconomicoutcomes

Source: BCG

What will be the LENGTH of "Flatten"?
1a What are the preconditions to transition?
When will we achieve them?

1b

To what DEPTH does the economy
drop in "Flatten"?

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

2b

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

Where does the
economy return to3 relative to the preCOVID era in"Future"?

13

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Shut down

FutureEconomic starting point | Understanding of countries' sector composition
critical to estimate direct negative impact of reduced contact
As of 27 April 2020

Preliminary figures

Groceries & Healthcare providers, etc

Legal ande.g. Auto andTourism andSoftware, etc. Mining, etc Restaurants, etc.

Germany

65%

UK

68%

France54%

Italy

Employment by sector (%)

11%

16%

9%

58%

7%

13%

61%

11%

12%

66%

22%

8%

14%

15%

12%

53%

12%

7%

US

53%

13%

23%

11%

Open
Low to High

LimitedLow

LimitedMediumLimitedHigh

Under stay-at-home order

15%

48%

53%

12%

16%

4%

17%

17%

53%

57%

21%

14%

12%

Spain

Contact Intensity

Incl. Government

12%

14%

Government employment does not include health care in EU countries to maintain comparison with US
1. European figures reflect gross output by sector, which is analogous to revenue by sector. US figures directly reflect revenue by sector.
Source: Eurostat Database; St. Louis Fed Reserve; O*NET; American Community Survey; other country-specific sources available on request; BCG COVID response teams; BCG Analysis

15%

16%

17%

15%

17%

19%

23%

18%

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Revenue by sector (%)

Impact during 'Flatten' | Shutdown of 'non-essential' activities can put
estimated 10-30% of economic activity and 15-35% of jobs temporarily at risk
Preliminary figures – ONLY first order effect of microeconomic data during Flatten phase.
Economic impact also depends on length of suppression.

Impaired economic activity1 during 'Flatten' phase
Estimation in private sector relative to pre-COVID in %Germany
UK

Impacted employment during 'Flatten' phase
Estimation across the economy in %~25-10%~30-15%~25-10%~30-15%~30-15%

France~30-15%~25-10%Italy~30-15%~30-15%Spain~35-20%~30-15%

US
-30%

-20%

~30-15%-10%0%-35% -30%

Disclaimer: These analyses represent only potential scenarios based on discrete data from one point in time. They are not intended as aprediction or forecast and the situation is changing daily. Figures shown only reflect economic activity "directly displaced" by effect of virus.
However, multi-order impacts and the impact of government spending and stimulus not considered-20%-15% -10%

Max of estimated range(i.e. period hardest hit by the lockdown)

Note: Numbers are rounded to nearest 5%. Gov't employment does not include health care in EU countries to maintain comparison with US.
1. European figures reflect gross output by sector, which is analogous to revenue by sector. US figures directly reflect revenue by sector.
Source: Eurostat Database; St. Louis Fed Reserve; O*NET; American Community Survey; other country-specific sources available on request; BCG COVID response teams; BCG Analysis0%
Min ofestimated range

15

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As of 27 April 2020

Impact during 'Fight' | 5-20% of economic activity and 5-20% of jobs
can be temporarily at risk– implying protracted economic challenges
As of 27 April 2020

Preliminary figures – ONLY first order effect of microeconomic data during Fight phase.
Economic impact also depends on duration of Fight phase.

Impaired economic activity1 during 'Fight' phase
Estimation in private sector relative to pre-COVID in %Impacted employment during 'Fight' phase
Estimation across the economy in %UK

~20-5%~20-10%France~20-5%~20-10%Italy~20-5%~20-10%Spain~20-5%

US~20-5%
-30%

-20%

-10%

~25-10%~20-5%

-5%

0%

-30%

-20%

Disclaimer: These analyses represent only potential scenarios based on discrete data from one point in time. They are not intended as aprediction or forecast and the situation is changing daily. Figures shown only reflect economic activity "directly displaced" by effect of virus.
However, multi-order impacts and the impact of government spending and stimulus not considered
Note: Numbers are rounded to nearest 5%. Gov't employment does not include health care in EU countries to maintain comparison with US.
1. European figures reflect gross output by sector, which is analogous to revenue by sector. US figures directly reflect revenue by sector.
Source: Eurostat Database; St. Louis Fed Reserve; O*NET; American Community Survey; other country-specific sources available on request; BCG COVID response teams; BCG Analysis

-10%

-5%

0%

Base case
Upper bound case
Lower bound case16

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

~20-5%~15-5%

GermanyDuration of Fight | Accelerated movement toward vaccine ortreatment at scale could limit Fight phase to 12-24 months
As of 19 April 2020

Vaccine••••Multiple vaccines (e.g. Moderna, CanSino, AstraZeneca) in Phase 1 trials
Simultaneously, investments being made in manufacturing capacity
Likely about 12 months to earliest FDA-approval
Likely to take 4-6 months post-approval to full implementation

Treatment• Anti-viral therapies potentially available at scale in Q4-2020—
however, likely only used for more advanced cases• Antibodies from recovered patients currently being tested—
use will be limited to small scale/at-risk groups

Herd
immunity• Potentially could achieve herd immunity through exposure todisease and subsequent recovery• Would require 60-70% of population to acquire and recover

Estimated timeline
April '21 – April '23(12-36 months)
12-month development "best case",
then likely to require time to scale
across population

Oct '20 – April '22(6-24 months)
If first round of drugs being tested
succeeds – then 6-9 months; if not –substantially longer

Substantial
Would likely involve "pulsing" economy
on / off, but always maintaining caseloads below care capacity

Likely must be combined with treatment

Source: BCG analysis; Morningstar

17

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Current status

Consumer Sentiment | One-third plan to increase online spending next
month, especially those living in most affected and urban areas
As of 27 April 2020

US Example

Observations% respondents to increase online spending
45%
40%

43%
39%
37%
33%

35%

0

One third of consumers
plan to increase online
spending next month

Urban1
Most affected COVID-19 areas

34%
31%

Suburban2
Less affected COVID-19 areas

33,3%

Rural3

Residents of more
affected areas to increase
online spending more thanthose of less affected areas
Urban areas see
stronger increase in
online spending thansuburban or rural areas

1. Urban areas are those with more than 3,000 people per square mile 2. Suburban areas are those with from 1,000 to 3,000 people per square mile 3. Rural areas are those with less than 1,000 people persquare mile
Note: “Most affected areas” are the top 10 states by local number of confirmed COVID-19 cases, according to CDC statistics as of April 20, 2020; “Less affected areas” are the other 40 states and Washington, DC
Source: BCG COVID-19 Consumer Sentiment Survey, April 10–12 2020 (N = 2,960 US); unweighted, representative within +-3% of US census demographics

18

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Respondents planning to increase online spending in the next monthBusiness Leaders' View | While digital has been a priority for some time,>75% of companies plan to accelerate digital transformation now
As of 29 April 2020

Pre-crisis, digital capability investments
have been top priority

Respondent views on priority of digitaltransformation post crisis

Digital Capabilities
or Tech Stack50%

Research & Development

44%

Marketing & Sales

41%

Other Innovation
Mergers & Acquisition

38%
34%

All industries

Technology, Media, Telco

4%

EnergyIndustrial Goods
Public Sector
Financial Institutions

Emerging Markets

31%

Divestitures
and/or Spin-Offs

29%

Consumer
Heath care
More urgent

Note: DSR Digital Transformation 2020 Survey still ongoing with n=121; BCG 11th annual investor survey 2019 with n=251
1. Respondents were asked what percentage of companies should be more aggressive in pursuing the following strategies for value creation
Source: BCG 11th annual investor survey 2019 (Published 12 Feb 2020); DSR Digital Transformation 2020 Survey; BCG

No change

Lower priority
19

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Investor views on priority areas companies should
aggressively invest in1

Now, >75% of companies plan to accelerate
digital transformations

Many of the behavior shifts we are seeing today are expected to persist
beyond the crisis
A huge uptick in digital activities is seen across all industries and all parts ofthe value chain

1)

Businessleaders need tonavigate twoimperatives

In the short-term, embrace digital and analytics solutions to help manage
the crisis and succeed during turbulent times• Apps like 'Safe@Work‘ can help companies safely manage operations• Digitizing analog business models has immediate impact
2)

In parallel, accelerate digital and technology transformation to become
more resilient and take advantage of the new reality• Key to winning is intertwining human and technological capabilities• Digital levers with significant impact on near- and mid-term performance

Source: BCG

20

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COVID-19 crisis
is a step-change
momentfor digital andtechnology
transformation

The time
to accelerate
digitization isnowMany of the behavior shifts we are seeing today are expected
to persist beyond the crisis…providing opportunity
for persistent market change

Use of technology increased to replace traditional in-person services;
UK telemedicine to see ”ten years of change in one week“1Customers more comfortable with digital interactions

Use of Zoom and Slack increased; more new users for Zoom YTD
than total 20192, for Slack +140% in Q1 2020 compared with Q4 20193

Remote and virtual working models proliferating

Tracking and tracing of individuals via cell-phones implemented
to prevent further virus spread4

Data-driven and AI-powered decision making
increased, using granular, real-time information

Timely location-specific health guidance via digital apps
disseminated, allowing organizations to adapt to local situations5

Adaptive management practices more prevalent,building on collaboration and rapid decision making

Offline marketing campaign dollars reinvested into digitalmarketing, online-to-offline platforms, and e-commerce5

Fortified technology platforms emerging

Source: 1. New York Times 2. CNBC 3. TechCrunch 4. New York Times 5. Harvard Business Review

21

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Current behavior shifts
toward digital activities…

A huge uptick in digital activities is seen across all industries
and all parts of the value chain

Marketing/
Sales

Operations

PeopleSource: Press releases; BCG

Blockchain
to expand customer reach

Loyalty programs
to increase e-sales

Marketing/sales refocus
to boost online

Financial Service Provider usedblockchain to enable small/medium
enterprises in contactless bidding forbank loans

Beverage producer shifted to e-commerce,
linked home delivery with loyalty
program to drive repeat purchases

Retailer closed all stores and focused on
digital marketing/sales, leading to +30%
rise in online orders for the quarter

Process refocus
to stay in operation

Analytics tool
to coordinate response

Construction
to fulfill e-commerce

Bank moved large parts of the loan
handling process online to minimize
loan defaults

Retailer used advanced analytics tosimplify local store assortment andbetter respond to demand changes

Grocer accelerated constructionof e-commerce fulfilment centerand doubled online delivery capacity

Partnering
to retain staff jobs

Robotics technology
to treat patients

Social media
to incentivize workers

Retailer shared idle staff with
online-to-offline retailers to keep
staff employed

Hospital staffed wards with 5Gpowered robots to alleviate thestrain on human personnel

Underwear company used WeChat
to coordinate employee engagement
in increasing sales within social
circles22

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Examples of digital actions taken by companies in various industries

Business leaders need to navigate two digital and technology
imperatives to steer through the crisis, and win in the new reality• How do we ensure the safetyof our employees?
• How do we move quickly to aremote working model?

Digital &technology
imperatives• How do we ensure continuity ofsupply and operations?
• How do we manage costs andensure liquidity?
• How do we address current
customer needs?

Source: BCG

1

Fight
• How do we restart?
• How do we win with newcustomer behaviors, channels?
• How do we manage costs andensure liquidity?
• How do we make decisions amid
uncertainty?
• What tech and people
foundations need to be built?

Future• How do we ensure ongoing
resilience?
• How do we build more adaptive
organizational models?
• How can we step-change
operational efficiencies?
• How do we strengthen
connections with our customers?
• How do we change our business,market, industry for growth?

Immediate Digital Accelerators: Embrace digital and analytics solutions to help
manage the crisis (top and bottom line) and succeed during turbulent times

2

Digital & Technological Transformation: Accelerate digital and technology transformation to become
more resilient and take advantage of the new reality

23

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CEO Focus

FlattenImmediate Digital Accelerators | Apps like 'Safe@Work'
can help companies safely manage operations

1

On the app, he receives
targeted instructions andtips and is required toconfirm all locations in thepastAdam updates his COVID
health status with “healthy”
Adam receives andconfirms an update on
COVID guidelines for his
location and function

Susan decides to increasesocial distancing measureson the production floor to
avoid future COVID cases

Later, he receives an alert, that
he has been close to a COVIDpositive employee and begins
self-quarantine

Susan sees Adam's selfreporting and confirms
a complete shift

Adam postpones his lunch after his
phone informs him that the canteen
is currently overcrowded

Susan ensures that everyone incontact with Adam goes intoquarantine and initiates thedisinfection of all thecontaminated areas he visited

Note: Features are illustrative and require clients' local regulatory and compliance review. You have to make your own assessment on health & safety, privacy and otherregulatory, compliance or corporate policy requirements for use and implementation of Safe@Work
Source: BCG

24

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

His app constantly tracks
proximate devices via
Bluetooth to trace
potential infection chains

Immediate Digital Accelerators I Digitizing (parts of)analog business models has immediate impact

Industry

Context

Response1

ImpactEducational
institutions

Locked-down schools in
multiple countries

Shifted physical education classes to home schooling

Cosmetic
retailer

Closed physical retailstores to limit infections

Redeployed beauty advisors as online influencers

Financial service
providerIncreased demand for
health care services

Enhanced digital solutions to attract new customers

Beverage
producer

Restricted customer accessto bars and restaurants

Automotive
manufacturer

Limited physicalcontact outside of home

Source: Press releases; BCG

Used video conferencing tools to engage with students

Leveraged digital tools to engage customers virtually

Expanded digital insurance offer to include telemedicine
Shifted to omni-channel distribution
Promoted DJ livestreams, e-gaming events, andinfluencers
Launched touchless delivery to reduce interaction
Offered webcam-based customer service

45M downloads in 42 daysof top six education apps
200% growth in online sales
compared with the prior year’s sales+52K new customer sign-ups a day
in its peak
40% beer sales increase on delivery
partner e-commerce platform~12,700 cars sold in March –highest ever monthly sale

25

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

China Example

Digital & Technological Transformation | Key to winning: intertwining
HUMAN and TECHNOLOGICAL capabilities

2

Digital & Technology Transformation Journey• Lighthouse control tower• Follow customer online, digital marketing

Outcomes

Tech

PeopleSource: BCG… seeding …

… full digital and technology transformation• Customer experience: New E2E customer journeys,
personalization and digital marketing, next gen sales• Return to work, track and trace, remote working• Operations: full digital supply chain, factoryof the future, digital support functions• Data-driven supply chain stabilization• New digital products, services, businesses• Cost reduction through digital• AI@Scale• Tech resilience and cyber security• Accelerated data and digital platforms (DDP)• Tech portfolio reset• World-class tech function• Adaptive response management• Agile@scale and platform organization• Upskilling bootcamps• Digital skill building at scale (BOT)26

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Immediate digital accelerators …

Digital & Technological Transformation | Digital levers drive
significant impact on near and mid term performance2

Examples of digital levers

Mid-term EBIT impact
Revenue uplift

Customer offer& Go-to-Market

Operations

Support functions

Changing ways
of working

Leveraging thePower of data & tech

• Dynamic
pricing at apersonalized
level• Optimizationof inventorywith data &analytics• Automation ofprocesses with
RPA & AI• Build tech &engineering
capabilities• Simplify data& application
landscape• Rapid productdevelopment
via virtual
prototypes• …

• Predictive
quality control& maintenancewith AI• …

• Use of AI chatbot to improvecustomer
service• …

• Selectively
insource
critical skills• …

• Optimize IT
infrastructure
and migrations
to S4 Hana/
cloud
• …

Profit after
improvement

Example digital levers
Source: BCG analysis

27

Copyright © 2020 by Boston Consulting Group. All rights reserved.

Profit underpressure

“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."

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

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 Institute28

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Guiding principles
for leadership incrisis1

Guide for leadersFresh insights: messages for leaders2

Updated epidemic, economic, andbusiness scenarios and impact
Preconditions for restart
Economic impact
Business impact

3

Appendix: Detailed action areas
and further readings
Detailed action areas for business leaders
Further readings

29

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

This week's focus: how to accelerate Digital & Technology transformation

Some countries need to continue monitoring the case growth closely(cases doubling under 14 days)

Preconditions
for restart

Currently available serological tests too unreliable
to provide strong solution

Updated epidemic,
economic, andbusiness scenarios
and impact

Economic
impactEconomic forecasts continue to point to significant downturn in 2020—
global rebound to pre-COVID levels not expected before 2021
US: Peak of unemployment insurance claims ten times higher than in thefinancial crisis

Stock markets have currently stabilized after unprecedented drop

Business
impact

TSR1 has rebounded over last month but impact visible across many
sectors; no sector at pre-crisis level
Credit risk continues to be a concern for majority of sectors
Majority of companies negatively affected—yet some companies
in each sector manage to emerge much stronger

1. Total Shareholder ReturnSource: BCG

30

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Business readiness across health protocols and workplace safety key toensuring smoother transition during restartPRECONDITIONSFOR RESTART

Leaders need to get the preconditions for restart rightPublic/economic readiness

Diseaseprogression

Health carecapacity

Virus
monitoring

Business
preparation

Publicresponse

Government
preparation

Control of virus impact
in terms of case growthrate, environmental
factors1, and disease
impactAdequate supply of
hospital beds,
ventilators, ICUs, PPE,
trained staff, newtreatments

Widespread andprivate virus testing;contact tracing, tracking,and isolation

Workplace healthprotocols and businessreadiness

Training and availabilityof hygiene products;
civil awareness,compliance rates

Leadership capacity,
policy framework for
public health, sectors,
and economy

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, to play role incontainment; societal
response2

Leadership capacity anddecision-making on
policy; clear guidanceand expectations

1. Environmental factors: population density, demographics (age, health conditions), weather, etc.; mixing from other localities
2. Societal response: physical distancing, gatherings, intergenerational living, mass transit usage, shopping behavior, etc.
Source: BCG analysis

31

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Health care readinessSome countries need to continue monitoring the case growth closely(cases doubling under 14 days)

PRECONDITIONSFOR RESTART

As of 29 April 2020

Rates improving from top to bottom

10%
Mexico8%

RussiaSingapore

BrazilCases doubling:
10 daysSouth Africa

4%

2%

0%
100
Asia1

Cases doubling:
14 daysCanadaCases doubling:
Sweden21 daysUK
US
BelgiumJapan
Germany
Portugal
Iran Spain
Norway Austria France
Italy
South Korea
Switzerland
Iceland
China
Netherlands

10,0001,000,000
Cumulative number of confirmed cases (log scale)
EuropeNorth America

Cases doubling: 9

Max/day:
1,239# of newcases# of newcases

Days since first 100 infections

South America

Africa10

Max/day:
1,426# of newcases# of new
cases

India

11

Max/day:
1,893# of newcases# of newcases

Note: For doubling days, round off values calculated based on last 7 days CAGR of total confirmed cases 1. Includes Middle East
Source: Johns Hopkins CSSE, Our World in data, WHO situation reports

10

Days since first 100 infections

South Africa
Max/day:
318

Days since first 100 infections

Days since first 100 infections

Singapore

Max/day:
6,450

Days since first 100 infections

9

MexicoMax/day:
6,411

BrazilIndia

6%

Russia13

Days since first 100 infections

32

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

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

FlattenFight

Non-exhaustiveCurrently available serological tests too unreliable
to provide strong solution

PRECONDITIONSFOR RESTART

As of 27 April 2020

Illustration: Implications of Accuracy for Covid-19 Testing
Base data: 100,000 tests performed1; 5% disease prevalenceFalse Negative Patients(sick patients misdiagnosed negative)

False Positive Patients(healthy patients misdiagnosed positive)

100

provide the most accurate detection of thevirus genetic material (RNA), typicallyfrom respiratory swabs, and can detect thevirus before symptoms appear

detect the human immune response to
the virus about one week from when
symptoms appear; many "rapid" serology
tests launched vary significantly inaccuracy relative to molecular tests

Healthy patients = 95,000

Current Molecular"gold standard" test

"Gold standard" molecular tests

Serological tests

Sick patients = 5,000

Sensitivity 98%
Specificity 99%

950

Detection ~2-4 days before symptoms
Misdiagnosed
infectious people
do not isolate andpropagate
infection further

Rapid finger-stick serology

1,250"high quality"
Sensitivity 75%

4,750

Specificity 95%
Detection ~6-10 days after symptoms

Rapid finger-stick serology

3,500"low quality"2
Sensitivity 30%

38,000A positive serology test
result (true or false
positive) that suggest
an active COVID-19
infection will need a
confirmatory
molecular test

Specificity 60%
Detection~6-10 days after symptoms
Note: Serology tests detect active COVID-19 infection starting ~6-10 days after symptoms appear (IgM earlier, IgG later), or previous
exposure to the virus (IgG only) 1. Roughly equivalent to US nationwide daily throughput as of March 31, 2020 2. The Guardian("Coronavirus test kits withdrawn in Spain over poor accuracy rate", March 27, 2020)
Source: Expert interviews; BCG analysis

33

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Two test types available for
Covid-19 that differ in what
they detect and how wellthey detect

Business readiness across health protocols and workplacesafety key to ensuring smoother transition during restart
Face
Face
masks
masks

PRECONDITIONSFOR RESTART

SpecialSpecialcleaning
teams
cleaning
teams
Revised social
norms
Revisedsocial norms

Remoteworking
Remoteworking

ThermalimagingGood morning!

Physical separation

John Doyhle(e.g. non-overlapping
shifts)Non-overlapping
TEMPEARTURE
OK
DO YOU FEEL SICK?

Thermalimaging

shiftsCopyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Hand
Hand
sanitizer
sanitizer

Tracking&Trackingtracing& tracing

Care for
Paid sickthe sickleave
34

Economic forecasts continue to point to significant downturn in
2020—global rebound to pre-COVID levels not expected before 2021

ECONOMIC IMPACT

As of 28 April 2020

GDP level forecast2

GDP growth forecast vs. baseline

EOY 2021 vs. EOY 20192021

-10% -8% -6% -4% -2% 0%
Forecast -5.9%

2%

4%

6%

8% 10%-10% -8% -6% -4% -2% 0%Baseline 2.0%

2%

4%

6%

1.7%

4.7%

8% 10%

US

96-103%
Forecast range
1.2%

6.0%

5.8%

9.2%

107-112%

China
-7.5%

1.3%

1.4%

4.7%

95-101%

EuropeGermany's own forecast -6.3% (29 Apr)1
1.9%

Germany's own forecast 5.2% (29 Apr)1

5.8%

6.5% 7.4%

106-112%

India
-5.2%

0.7%

0.5%

3.0%

96-100%Japan
Forecast (IMF Apr 2020)

Baseline (IMF Jan 2020)

Forecast range (IMF & Banks3)Note: As of reports dated 31 March 2020 to 28 April 2020, YoY forecasts 1. Announced by the German Federal Ministry for Economic Affairs and Energy on 29 Apr 2020 2. Range calculated with
25th & 75th percentile values of forecast range 3. Range from forecasts (where available) of International Monetary Fond, JP Morgan Chase; Morgan Stanley; Bank of America; Fitch Solutions;Credit Suisse; Danske Bank; ING Group; HSBC Source: German Federal Ministry for Economic Affairs and Energy; Bloomberg; IMF; BCG analysis

35

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

2020

ECONOMIC IMPACT

As of 30 April 2020

Initial US unemployment insurance claims
Millions

Total of 30M1 unemployment
insurance claims
during last 6 weeks(weeks of 21 March – 25 April)

7
6
5
4
3

Financialcrisis

2
1
0

1970

1980

1990

2000

2010

2020

1. Unemployment insurance claims of 3.3M (21 Mar), 6.9M (28 Mar), 6.6M (4 Apr), 5.2M (11 Apr), 4.4M (18 Apr), & 3.8M (25 Apr)
Source: NBER, US Bureau of Labor Statistics, and BCG Center for Macroeconomics analysis

36

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

US:
Peak ofunemployment
insurance claims
ten times higher
than in the financial
crisisStock markets have currently stabilized after unprecedented drop

BUSINESS IMPACT

As of 27 April 2020

Global equity markets varying around a lower mean

Steeper drop than in 1929

Feb 21

5
0
-5
-10
-15

Bigger sell-off than in 20081-20-25
Korea (KOSPI)-30

U.S. (S&P 500)

-35

Japan (Nikkei 225)-40

UK (FTSE 100)

-45

German (DAX)
1 Feb

1 Mar

1 Apr

27 AprHigher volatility as in 20082

China (SSE)

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: Impact of the COVID-19 pandemic on global FDI and GVCs, UNCTAD, Bloomberg, Reuters Eikon BCG

37

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Inflection with virus' spread toEurope, US, and beyond

Markets looked past virus’s
spread in China

Cumulative returns (%)

Observations

TSR has rebounded over last month, but impact visible across all
sectors; no sector above pre-crisis level across regions

BUSINESS IMPACT

As of 29 April 2020
Order of sectors reflects economic scenario and consumer sentiment

Healthier sectors

Pressured sectors

Vulnerable sectors

Food/staples Retail
PharmaSemiconductors
Household Products
Telecom
Health Equipment
Tech Hardware
Food & Beverage
SoftwareMaterials
Prof. Services
Utilities
Retailing
Capital Goods
Media
Financials
Transport
Hospitality
Durable Goods
Real Estate
Insurance
Banks
Auto
EnergyAmericas

EuropeAsia

21 Feb '20 – 21 Feb '20 –20 Mar '20
29 Apr '20

21 Feb '20 – 21 Feb '20 –20 Mar '20
29 Apr '20

21 Feb '20 – 21 Feb '20 –20 Mar '20
29 Apr '20

-10%

-5%

-15%

-19%

1%

-30%

-2%

-19%

-6%

-16%

-8%

-17%

-8%

-20%

-17%

-33%

-10%

-31%

-13%

-11%

1%

Observations

-13%

-8%

-9%

-20%

-2%

-22%

-1%

-43%

-13%

-27%

-10%

Non-discretionary/essential service lesshit but still had recovery

-5%

4%

First sectors recovering regionally

-14%

-5%

-29%

-10%

-25%

-4%

-23%

-15%

-26%

-10%

-24%

-14%

-12%

-2%

-30%

-9%

-32%

-18%

-28%

-13%

-34%

-11%

-31%

-14%

-30%

-17%

-30%

-15%

-29%

-15%

-31%

-19%

-33%

-17%

-30%

-24%

-6%

-1%

-42%

-22%

-36%

-22%

-24%

-7%

-38%

-17%

-35%

-20%

-29%

-18%

-36%

-17%

-47%

-34%

-14%

4%

-36%

-16%

-35%

-16%

-19%

-10%

-37%

-20%

-38%

-31%

-13%

-14%

-49%

-28%

-47%

-30%

-23%

-14%

-49%

-23%

-32%

-17%

-21%

-11%

-42%

-29%

-26%

-17%

-22%

-8%

-42%

-31%

-40%

-28%

-27%

-16%

-41%

-30%

-44%

-38%

-26%

-20%

-47%

-23%

-45%

-25%

-32%

-20%

-56%

-32%

-45%

-24%

-41%

-27%

Broad set of industries experiencing
pressure, with some regions particularly
affected for certain sectors (e.g. Mediain Europe)
Food & beverage, utilities, media, andhealth equipment generally better off in
Asia

Hardest hit sectors had some recoveries
but still performing way below 21 Feb
2020 levels

Note: As of 29 April 2020; Based on top S&P Global 1200 companies; Sectors are based on GICS definitions. TSR = Total Shareholder Return. 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 29 April 2020
Source: S&P Capital IQ; BCG ValueScience® Center; BCG

38

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

TSR performance1

Credit risk continues to be a concern for majority of sectors

BUSINESS IMPACT

As of 29 April 2020

Healthier sectors

Pressured sectors

Vulnerable sectors

Food/staples Retail
PharmaSemiconductors
Household Products
Telecom
Health Equipment
Tech Hardware
Food & Beverage
SoftwareMaterials
Prof. Services
Utilities
Retailing
Capital Goods
Media
Financials
Transport
Hospitality
Durable Goods
Real Estate
Insurance
Banks
Auto
EnergyCompanies in
distress (%)3

21 Feb 2020

29 Apr 2020

21 Feb 2020

29 Apr 2020

4%
3%
5%
4%
4%
4%
4%
3%
4%
4%
5%
3%
5%
3%
5%
4%
3%
5%
4%
5%
4%
4%
5%
5%

5%
3%
7%
4%
7%
5%
4%
3%
4%
6%
5%
4%
7%
4%
8%
6%
3%
11%
6%
9%
6%
6%
11%
13%

0%
0%
0%
0%
0%
0%
0%
0%
0%
4%
0%
0%
0%
2%
0%
0%
0%
7%
0%
0%
0%
0%
0%
0%

0%
5%
14%
0%
15%
0%
0%
0%
0%
17%
0%
0%
41%
12%
14%
0%
36%
43%
5%
16%
0%
4%
33%
35%

Note: As of 29 April 2020; Based on top S&P Global 1200 companies; Sectors are based on GICS definitions
1. Credit Default Swap 2. Performance is tracked on 21 February 2020 (before international acceleration of outbreak), and 29 April 2020
default Source: S&P Capital IQ; BCG ValueScience® Center; BCG

Observations
Less discretionary and cash-rich sectors
are largely at lower risk of default incurrent climate

Retailing with spike in companies in
distress (~40% of retailing sector with
> 15% implied probability of default)Auto, hospitality, and energy industries
facing greatest risk of default based on
current credit profile

3. Distressed comprises over 15% implied probability of

39

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Median 5-year CDS1 implied
probability of default2

Majority of companies negatively affected—yet some companies
in each sector manage to emerge much stronger

BUSINESS IMPACT

As of 29 April 2020
Year-to-date shareholder return in % per sector
20

-20
-40

Healthier sectors
Top 10%Bottom 10%

Pressured sectors

Energy

Auto

Banks

Insurance

Real Estate

Durable Goods

Hospitality

Transport

Financials

Media

Capital Goods

Retailing

Utilities

Prof. Services

Materials

SoftwareFood & Beverage

Tech Hardware

Health Equipment

TelecomHousehold Products

Semiconductors

Pharma-80

Food/staples Retail-60

Vulnerable sectors

MedianNote: Sectors are based on GICS definitions; data as of 29 April 2020; Companies sampled from S&P Global 1200
Source: S&P Capital IQ; BCG ValueScience® Center

40

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

0

1

Guide for leadersFresh insights: messages for leaders2

Updated epidemic, economic, andbusiness scenarios and impact
Preconditions for restart
Economic impact
Business impact

3

Appendix: Detailed action areas
and further readings
Detailed action areas for business leaders
Further readings

41

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

This week's focus: how to accelerate Digital & Technology transformation

Detailed measures across priority action areas (1/3)
Fight• Deep-dive into possible outcomes of disease spread, demand
shifts, supply/operations issues, regulatory requirements, andpotential operations restart; adjust for sector-specific issues• Frequently run scenarios and update plan; focus onunderstanding the de-averaged impact by geography
and line of business, depth of demand drop, durationof Fight phase1

Develop Scenario-Based
Planning Approach to
manage uncertainty• 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

2

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

3

Revamp Organization andPeople for the new normal• 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• 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 them
• Build SWAT teams to address critical business areas, such as
product launch, digital channel redesign, retail delivery models
Source: BCG

Future• Develop recommendations for daily planning,
resources, supply chain, workforce, and otherstakeholder management as per modeled scenarios• 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
• Get ahead of the curve to manage policies to getteams 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

42

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

FlattenEstablish crisis
management

Detailed measures across priority action areas (2/3)

4

5

Drive Topline Security &Customer Trust

Stabilize and restart
Supply Chain,
Manufacturing

Fight

Future• Reach out to customers for their situation and needs,• Assess changes in customers' behaviors• Drive actions to inspire confidence and ensure ability todeliver (multichannel, people-light approaches)• Adapt and transform channels(e-commerce), sales, marketing spend, pricing, and support• Manage volatility in demand, and refine sales motions(to virtual, etc.) and objectives• Ramp up commercial efforts significantly to seize market
shifts; leverage learnings to accelerate 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 quick and safe restart of facilities; pushcentrally driven efficiency measures• Ensure open and direct communication with employees• Explore solutions to retain key talent• 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

6

Manage Cost, Cash,and Liquidity• 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 todeal with uncertainty

Source: BCG• Build central team to simulate financials as per
evolving scenarios; drive agile ways of 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

43

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

FlattenNavigate throughFlatten, Fight, and FutureDetailed measures across priority action areas (3/3)• Stress-test current value proposition and business
offerings, and scan crisis impact on key
customer/market trends

7

Emerge stronger; drive
advantage in adversity

Fight

Future• Plan for new projects to shift the portfolio andleverage the 'new normal'; plug capability gaps
• Identify white spaces in own industry and ecosystem• Selectively invest in areas where opportunistic M&A
can be conducted• Develop and implement strategy to exploit greatertalent availability

8

9Accelerate Digital &Technology transformation

Help Society during
COVID-19• Address and serve immediate workforce needs forremote working• Identify and implement key digital use cases andadapt to agile way of working• Leverage tools for conducting key processes online• Accelerate use cases to meet demand shifts• Adapt traditional processes to become digitally viable• 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• 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

• Leverage assets, supplier relationships, logistics
networks, and employees to help adjacent communities• Allocate innovation resources where possible tofocus on solutions to COVID-19 crisis• Work across industry boundaries to identify crosssectoral synergies to deploy solutions• Leverage expertise developed to support
government policies and responses, rebuild
business for local customers, suppliers, etc.

Source: BCG

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FlattenNavigate throughFlatten, Fight, and FutureFurther reading on facts, scenarios, and key focus areas for leaders
To know more, refer to the previous editions
As of 17 April 2020

1

Facts, scenarios, and actions
for business leaders• Epidemic progression• Thinking on a multi-timescale
perspective for leaders, preparing
their responses across three phases:(1) FLATTEN the COVID-19 infection
curve, (2) collectively FIGHT thevirus, preserve public health, andprogressively reopen sectors ofsociety and the economy, and (3)prepare for the FUTURE

1. Total Shareholder ReturnSource: BCG

2

Preparing for restart• Testing proliferation and digitaltracking of the spread; race forthe cure• Updates on government measures
including first liftings of restrictions• BCG scenarios on duration anddepth of economic impacts• Key questions and considerations
for governmental and businessleaders to address when restarting

As of 24 Apr 2020

3

Emerging stronger fromthe crisis• Health care capacity and testing• Business preparation and public
response as key to a sustainabletransition• Consumer sentiments, economic
impact forecasts, and TSR1
performance across industries• The relevance for business leaders toleverage real-time, leading indicators• Perspectives on how to prepare andwin with innovation as an accelerator
out of the crisis

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Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

As of 10 April 2020

Additional perspectives on COVID-19
Selected sector and functional publications

Technology & Digital

People & Organizations

Media

Technology

Consumer

The Rise of the AI-Powered
Company in the Postcrisis
World

Take Care of Tech Talent
When it Matters

Media Companies Amidst
COVID-19

How Tech Companies Can Shape
Their Demand Recovery PostCoronavirus

COVID-19 Consumer SentimentSnapshot #7: Retracing the Old
NormalOperations & Digital

Globalization & Digital

Financial Institutions

Telecommunications

Financial Institutions

Building the Bionic Supply
Chain

The Race for Digital
Advantage in Africa

For Banks, COVID-19 Makes
Transformation That Much MoreUrgentTime for action: In times of COVID19 Telcos need to move rapidly to
be part of the solution

Global Risk 2020: It's Time forBanks to Self-Disrupt

Crisis Response Checklist

Transformation

Health Care

Automotive

Transportation & Logistics

Checklist

COVID19: Win the Fight,
Win the Future

Biopharma Applies New Service &Support Models amid COVID-19

Auto Companies Will Outlast
COVID-19 & Come Out Stronger

Transportation & logistics
companies must adapt to keepsupplies moving

Source: BCG

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Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 1 May 2020 Version 4.1.

Selected overarching publications

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