COVID-19 Survival Game

Since December last year, COVID-19 has spread to 214 countries and territories.[1] To curb the spread of COVID-19, countries around the world implemented lockdown measures, including closing borders, shutting schools and workplaces, and limiting large gatherings, which have brought much of global economic activity to a halt.
The pandemic has presented unprecedented damage to the global economy. According to the World Bank[2], the global GDP is projected to contract by 5.2 percent in 2020 as a result of the pandemic, which is the deepest global recession in decades.
However, the impact of COVID-19 has not been uniform across different industries. Some industries have been hit harder than others while certain business sectors have experienced unexpected growth due to high demand stemming from the pandemic.

Analysis on the impact of COVID-19

Hebronstar’s analysis on the impact of COVID-19 across industries indicates that businesses can be categorized according to business opportunity and recovery variables.

  1. Businesses in the ‘Positive’ category has quickly recovered from the pandemic and even achieved significant growth during this period. Food-delivery companies are thriving as the fear of contagion drives many consumers to stay indoors. Grubhub, a U.S. food delivery app, saw a 12 percent increase in revenue in the first quarter of this year to $363 million.[3]
  2. Industries that lie in the ‘Stable’ area has benefited from the pandemic but are likely to recover slowly. The retail industry, for instance, has experienced growth in online sales but seen massive declines in offline sales as consumers purchase the majority of their goods online due to the pandemic. E-commerce sales in the U.S. is forecasted to increase by 18 percent this year while total U.S. retail sales is expected to drop by 10.5 percent.[4]
  3. Due to COVID-19, people who had previously been reluctant to shop online are setting up online accounts and experiencing an entirely new customer journey. Once they get a taste for online convenience, they may never go back to their old ways, which would slow recovery in offline sales.
  4. ‘Resilient’ industries have suffered losses due to the pandemic but got back on their feet quickly. For instance, the S&P 500 lost an estimated $1.737 trillion of its value during its two-day market sell-off in February this year.[5] However, the S&P 500 hit a new all-time high in August this year and erased its losses from the pandemic-induced sell-off, returning the market to pre-pandemic levels.[6]
  5. The ‘Negative’ category includes industries that have declined due to the pandemic and are likely to show slow recovery. The hospitality and leisure sector is one of the most adversely affected industries due to travel restrictions and fears of community spread through travel. As the global lockdown continues, the airline industry is set to lose the most. The International Air Transport Association estimates that global air transport industry revenues could fall $252 billion, 44 percent below 2019’s numbers.
  6. In a best-case scenario, the airline industry is projected to recover by the end of 2023, based on the assumption that passenger demand will recover to 2019 levels by then, contingent on the production and distribution of effective COVID-19 vaccines.[7]

The foregoing analysis suggests that the impact of COVID-19 will vary considerably across industries. Therefore, it would be important for businesses to evaluate how business opportunity and recovery variables will play out and the impact these factors will have on their business activities.


Survival Scenario

In our analysis, industries can be categorized into four segments: Positive, Stable, Resilient, and Negative. To tackle COVID-19, businesses need to develop survival scenarios accordingly.

1) Businesses in the ‘Positive’ category can adopt ‘Attract & Retain’ strategy, where they focus on acquiring new customers through business opportunities that arise from the pandemic and come up with plans to retain them even in the post-COVID-19 world. For instance, food-delivery companies may consider offering additional incentives. Coupang Eats, a Korean food delivery app, launched a ‘One House Delivery’ service in June this year, which reduced delivery time by assigning one delivery man to one order. This is differentiated from competitors’ ‘Combined Delivery’ system in which one driver receives multiple orders from nearby regions.

2) Industries that lie in the ‘Stable’ area can implement ‘Strategic Adaptation’ strategy, where they on-board with the changing consumer behavior and shift their business models. For instance, retailers can expand their e-commerce businesses and move offline businesses to online.

3) ‘Resilient’ industries can utilize ‘Status Quo’ strategy, where they keep things as they are by not trying to seize business opportunity and thus avoiding confrontation and risk.

4) Industries in the ‘Negative’ category can pursue ‘Boost Retention’ strategy, where they concentrate on keeping existing customers and preventing them from defecting.

For instance, airlines may consider lowering ticket prices or offering special promotions. Jeju Air, a Korean LCC, introduced ‘Jeju Air Free Pass’ in July this year, which allows customers to fly for a set number of times regardless of the destinations within the validity period.


In the post-COVID-19 world, companies that are able to quickly adapt will survive. Therefore, companies should first consider their position: Which category are they in? Then companies should increase flexibility and agility in response to changes to remain competitive and survive.


[1] CNN. (2020, Aug 28). Tracking Coronavirus’ Global Spread.

[2] World Bank. (2020, Jun). Global Economic Prospects.

[3] Forbes. (2020, May 12). Potential Uber Eats-Grubhub Combo Would Surpass DoorDash to Create the Largest U.S. Food Delivery App.

[4] eMarketer. (2020, Jul 2). US Ecommerce Will Rise 18% in 2020 amid the Pandemic.

[5] CNBC. (2020, Feb 25). Coronavirus Wipes Out $1.7 Trillion in US Stock Market Value in Two Days.

[6] CNBC. (2020, Aug 22). The S&P 500′s Return to a Record Doesn’t Tell the Full Story with 60% of Stocks Still with Losses.

[7] Moody’s Investors Service. (2020, Jul 16). Moody’s – Coronavirus-related Disruptions to Airline Industry Affect Broad Swath of Global Economy.


Hebronstar Insights
Woo, Ji Soo / Associate Consultant