Survey: Companies need to reevaluate business model amid the pandemic

The majority of companies in Asia need to fundamentally change their business models due to the pandemic and its subsequent economic fallout, according to FTI Consulting's Resilience Barometer COVID-19 Report. 

The report surveyed more than 600 companies in China, India, Indonesia, Japan, Singapore and South Korea. 91% of respondents said they had placed greater emphasis on planning for unknown risks, meaning that concentrating on business fundamentals, such as staying operational and financially viable in the face of future crises. As a result, 81% of companies now use AI and analytics to monitor scenarios that impact risk and compliance.

The pandemic has also impacted business resilience, with 64% of companies surveyed saying they had been facing challenges servicing their debt requirements. Companies saw an average revenue decline of 10% and headcount decline of 12%.

Meanwhile, 83% of companies believed they must fundamentally reevaluate their business models as a result of the pandemic, while 36% of companies surveyed across Asia required restructuring or refinancing due to the pandemic's impact.

“From debt servicing to cyber threats, businesses have never faced so many compound crises occurring at once. If 2020 has taught businesses anything, it is that those businesses that invest in resilience will be well placed to succeed when we emerge on the other side," said Caroline Das-Monfrais, senior managing director and global resilience lead at FTI Consulting.

Companies will need to reassess strategic actions like mergers and acquisitions as well as the integrity of supply chains, which three-quarters of respondents believed that such actions have been permanently disrupted.

“Companies in Asia have arguably faced a longer period of disruption than other regions as a result of COVID-19. As well as reported declines in productivity, turnover, profit and headcount, businesses are facing the prospect of permanent changes in consumer behaviour and the need to rethink their business models in order to serve the needs of their clients in the new normal,” said Andrew Gerrard, head of markets and strategy for Hong Kong.