How Covid-19 affects the normal lifecycle of a business

The business cycle we expect to see

The industry lifecycle is one of the first tools often used to analyse the strategy a business should be following. The lifecycle focuses on the stages of formation, growth, consolidation and eventually the close of a business in the market.

The Normal Business Cycle


 Largely it is intuitive to any business owner: funds are invested into a company to find space, stock, and staff. Maybe a bit more is spent on doing some marketing and new development. All in the hope of eventually seeing profit.

Subsequently, your business begins to see some return customers. They tell their friends and you begin to grow. Then you reach a point where you need to change offerings as the seasons switch around, or new competition opens up.

But since you are a dedicated and focussed business who has a can-do attitude, you know what your customers want and how to give it to them. Maybe there are some places that you could do better, but you are doing well enough. The market undergoes a few changes, maybe some load shedding here or there, or taxes go up. Stronger companies adjust to this, the weaker ones with marginal profits and relationships struggle and close down.

The strong surviving businesses consolidate and settle in for the long run. Slowly though, the market changes: no longer do people look to buy what you have and you enter the slow decline. Some businesses refresh and switch up their offer to remain relevant, while the less dynamic slowly fade away. 

The COVID Business Cycle


Everything goes belly up…

Start-ups, Growth-phase, Shakeouts, Mature, Declining… almost everyone in the industry goes into survival mode.

The weaker players get pushed to the side, stronger players consolidate and batten down the hatches. Employees struggle, owners struggle, consumers struggle; no one is exempt. But what ultimately does this mean in terms of strategy that you should be using? If everyone is impacted and the playing board is reset, then what strategies should be used to exit and drive the business going forward?

Revitalising and Adapting
Surviving firms through a situation like COVID-19 are faced with changed consumers, new trends, new behaviours, and new patterns emerge.  So, this begs the question: what strategic choices need to be made for your firm to grow into the future?

There are different strategies for different stages of the business lifecycle, but when something so widespread and drastic happens, it can be considered a reset of how the normal marketplace functions. Most businesses now have two choices, revitalise and adapt, or face the slow decline to crisis.

South Africa has largely lagged behind the rest of the developing an developed world in terms of adopting new technologies. What COVID-19 did, was forced this digital transformation especially in South Africa. Consumers started ordering groceries online and for the first time understood the appeal of convenience! New opportunities arose in the tech sector and suddenly there was a huge shift in mindset. Companies that always planned to go online “one day” suddenly had little choice in the matter if they were to survive!

However, we think these changing trends are here to stay. Once consumers have tasted the sweetness of convenience we doubt they will every go back to waiting in queues to checkout! However, running an omnichannel retail business requires a lot of expertise in the long run especially if business owners want to avoid the constant manual labour of keeping inventory levels synced, and organising operations to service customers online and offline. This is all without the additional marketing spend that an online store requires to be successful and to justify the investment involved in getting up and running.

Luckily hoodgoods, full of talented, intelligent, and hardworking entrepreneurs, is here to help you on this path to growth. We understand what the changed South African market needs in terms of service and access to products. Further, our philosophy of developing micro-economic hubs through supporting local, neighbourhood businesses will help level the playing field (which has gotten even more unequal and skew post-Covid). We understand that independent retailers are not a software or web business, but we also recognise that going digital will be one of the new ways of revitalising and making your business take the next step.

Let us connect you with your community and clients through our digital platform, specifically set up to get you in touch with your next client. Reach out to us to see how we can help you take the next step in your business journey. Email us on  


Various phases in the business cycle and strategies to deal with the challenges presented

John Meyer

Tech Guru

John is an engineer and a business consultant with diverse and varied interests. He regularly writes about challenges he sees businesses facing through his professional corporate and consulting work as well as through the lens of an entrepreneur!