Coronavirus (COVID-19) : Impact, Implications, & Immediate Actions

Framework Primer
Coronavirus (COVID-19): Impact,

Implications, & Immediate Actions
Low
Version 2
Low system readiness Medium system High system readiness
and low virus spread. readiness and low and low virus spread.
virus spread.
B1 A3 A4

and medium virus readiness and medium and medium virus
Virus spread. virus spread. spread.
spread
B2 A1 A2

and high virus spread. readiness and high and high virus spread.
virus spread.
B3 B4 B5
High
Public-health system
Low High
readiness
Presentation created by
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Contents
 Overview
 Scenarios and Stages of Recovery
 COVID-19 Scenarios
 Immediate Business Actions
 Appendix
This document is an exclusive document available to FlevyPro members - http://flevy.com/pro 2

This deck discusses the business impact and implications of the
Coronavirus pandemic, as well as critical actions businesses should take
Presentation Overview
The entire world is currently dealing with the same crisis, the Coronavirus Disease 2019 (COVID-
19) pandemic. Countries, organizations, and individuals are faced with extremely serious risks,
uncertainties, challenges, questions, and decisions—in many cases existential in nature. It is
important for everyone to arm themselves with accurate, comprehensive information to best
prepare themselves and their organizations to manage through this crisis by making informed,
thoughtful decisions.
This presentation discusses both global and organizational impact and implications of the
COVID-19 pandemic, along with critical actions organizations should take immediately.
The first 2 sections discuss 9 potential scenarios and the 4 stages of economic recovery. These
scenarios capture outcomes related to GDP impact, public health response, and economic
policies.
The third section delineates 6 immediate and critical actions organizations should be taking:
1 Protect Employees 3 Ensure Sufficient Liquidity 5 Practice CCD

2 Set up a Cross-functional 4 Stabilize the Supply Chain 6 Help the Community
Response Team
We hope you can leverage these slides to help guide and manage your organization
safely and successfully through this crisis.

Contents
 Overview
 Appendix

Based on the current spread of the Coronavirus, we can evaluate
9 scenarios to determine our path to recovery
9 Scenarios for Coronavirus Disease 2019 (COVID-19) – Overview
Based on the rapid, exponential spread of COVID-19 across the world over the past month, McKinsey has revised its Scenario
Analysis to include 9 potential scenarios.
Low
Medium system
Low system readiness High system readiness
readiness and low virus
and low virus spread. and low virus spread.
spread.
B1 A3 A4

Virus
and medium virus readiness and medium and medium virus
spread
spread. virus spread. spread.
B2 A1 A2
Medium system
Low system readiness High system readiness
readiness and high virus
and high virus spread. and high virus spread.
spread. A More likely scenarios
B3 B4 B5 B Less likely scenarios

High
Public-health
Low system readiness High
These scenarios capture outcomes related to GDP impact, public health response,
and economic policies.
Source: How to Restart National Economies during the Coronavirus Crisis, McKinsey, 2020

In the later slides, we will take a deeper dive into the scenarios of a slow
global recovery (A1) and when the Coronavirus is contained (A3)
9 Scenarios for Coronavirus Disease 2019 (COVID-19) – Details
Better
Rapid and effective control Virus contained but sector damage; Virus contained; slow recovery. Virus contained; strong growth
of virus spread. lower long-term trend growth. rebound.
Strong public-health response
succeeds in controlling
spread in each country within GDP
2-3 months.
B1 A3 A4
Time
Virus spread
Effective response, but virus Virus recurrence; slow long-term Virus recurrence; slow long-term Virus recurrence; return to trend
and public-
recurs. growth. growth, muted world recovery. growth, strong world rebound.
health
Public-health response
response
succeeds but measures are
Effectiveness not sufficient to prevent
of the public- recurrence so physical
health distancing continues
response B2 A1 A2
(regionally) for several months.
Broad failure of public- Pandemic escalation; prolonged Pandemic escalation; slow progression Pandemic escalation; delayed but full
health interventions. downturn without economic recovery. toward economic recovery. economic recovery.
Public-health response fails to
control the spread of the virus
for an extended period of time
(e.g., until vaccines are
available). B3 B4 B5
Worse
Ineffective interventions Partially effective interventions Effective interventions

Self-reinforcing recession dynamics Policy responses partially offset Strong policy response prevents
A More likely scenarios kick in; widespread bankruptcies and economic damage; banking crisis structural damage; recovery to pre-
credit defaults; potential banking crisis. is avoided; recovery levels muted. crisis fundamentals and momentum.
B Less likely scenarios
Worse Better
Knock-on effects and economic policy response
Effectiveness of government economic policy

Different countries have had different levels of success in handling this
crisis—we have thus 4 stages of recovery readiness
4 Stages of Recovery Readiness – Overview
For a nation to recover and restart its economy, there are 4 stages it must pass through, depending on its current state of readiness.
Stage 1 Stage 2 Stage 3 Stage 4
Population Higher Restrictions to transit in Stay at home or at designated Stay at home or at designated Stay at home or at designated
risk specified zones, times, and location. location. location.
days of the week.
Others No restrictions, but remote No restrictions but remote work Restrictions to transit in Required to stay home in
work is recommended. is highly recommended. specified zones, times, and mandatory isolation.
days of the week.
Economic Essential All sectors are allowed to Government begins to prepare Government partially manages Government ensures the
sectors operate, and key supply chains the management of key supply essential supply chains in management of essential
operate on a market basis. chains in partnership with the partnership with the private supply chains in partnership
private sector. sector. with the private sector.
Others All sectors are allowed to Most sectors are allowed to Only a few sectors are allowed Only those that can operate on
operate. operate but they need to comply to operate and they need to an online basis are allowed.
with specific social distancing comply with specific social
and health protocols. distancing and health protocols.
Transport No restrictions to intraregional Some restrictions to High restrictions to Intraregional mobility is limited
mobility; interregional mobility intraregional mobility, no intraregional mobility, no to exceptional cases, no
is allowed but only between interregional mobility allowed. interregional mobility allowed. interregional mobility allowed.
regions in Stage 1.
Assembly Events of up to 200 people are Events of up to 50 people are Events of up to 10 people are Events are limited to household
allowed in public and private allowed in public and private allowed in public and private members and caregivers if
spaces. spaces. spaces. required in private spaces.
As the states within the US have taken different measures against the Coronavirus,
different US states are at different stages.

Contents
 Overview
 Appendix

We can map the 4 stages of recovery readiness against the 9 scenarios—
the best prepared areas are in stage 4 (in the upper right box)
COVID-19 Scenarios – 4 Stages of Recovery Readiness
To understand what state of readiness a country is in, we can map the 9 scenarios to the 4 stages of readiness.
Readiness to restart Low

economy: Low system readiness and Medium system readiness High system readiness
low virus spread. and low virus spread. and low virus spread.
Stage 1
Stage 2
B1 A3 A4
Stage 3
Stage 4 Low system readiness and Medium system readiness High system readiness
medium virus spread. and medium virus spread. and medium virus spread.
Virus
spread
B2 A1 A2
Low system readiness and Medium system readiness High system readiness
high virus spread. and high virus spread. and high virus spread.
B3 B4 B5
High
Public-health
Low High
system readiness
This is a powerful framework to help countries—as well as organizations within

countries—determine how best to manage through this crisis.

For every country and territory, there is a path to recovery—before we can
restart parts of the economy, we must first slow the spread
COVID-19 Scenarios – Path to Recovery
Readiness to restart economy: Low

2
2 3
3 44
Stage 1 Stage 2 Stage 3 Stage 4
Journey to the next normal
1 to 2
B1 A3 A4
 Mandatory lockdown measures in Stage 4 slow the
virus spread, placing the city in a position to start
reopening its economy through Stage 3 measures.
Virus
2 to 3
spread
 As the economy reopens, the capacity of the
healthcare system is significantly expanded, thus B2 A1 A2
allowing a move to Stage 2 measures.
 City may return to Stage 3 or 4 if virus spread soars 1
after reopening.
3 to 4
 The city would reach its next normal, wherein its
healthcare-capacity has expanded sufficiently, the B3 B4 B5
High
virus spread is moderate, and the city deploys
Stage 1 measures. Public-health
Low High
system readiness
If we prematurely restart the economy prior to truly containing the spread, we risk re-
starting the spread.

To evaluate our current state of spread, we need to conduct patient case
analysis to forecast when we can “flatten the curve”
COVID-19 Scenarios – Trend Analysis
For up-to-date case trend data at the regional, country, and territory levels, use the Coronavirus Dashboard from Flevy:
https://flevy.com/coronavirus.
The Coronavirus Dashboard is a free, online tool. It

contains features and metrics not available at other
sources:
 View and plot the Active “Cases Curve” and “New
Cases Curve.” These are used to depict whether a
region is flattening the curve.
 Segment the United States for better analysis. Select
and analyze specific states to view as a combined data
set (e.g. Tri-state Area, Pacific Northwest, Midwest). It is
important to the US by regions, because lockdown and
other mitigation policies are enacted and enforced at a
regional, not national, level.
 Download the trend data. All data is downloadable
into CSV.
 Track additional metrics. Track metrics like Active
Cases per ICU Bed, Adjusted CFR, Total Cases/Deaths
per MM Population, etc.
Historical data is sourced from John Hopkins University—access the Coronavirus

Dashboard here: https://flevy.com/coronavirus.
Source: Flevy.com

Let’s take a deeper into the stage 2 scenario, A3, which captures
the situation where the virus is contained by mid-Q2
COVID-19 Scenarios – A3 (Overview)
DESCRIPTION
SCENARIO Virus  The Coronavirus contains to spread across EMEA and North America until mid-Q2.
A3 Contained  At that point, public health containment and mitigation efforts, along with a seasonal decline, leads to a reduction
in case load.
GDP IMPACT EPIDEMIOLOGICAL SCENARIO ECONOMIC IMPACTS
 China and East Asian countries continue their  China will undergo a sharp but brief slowdown
current recovery and control the virus by early Q2. and relatively quickly rebound to pre-crisis levels
GDP of activity.
 In Europe and the United States, the virus would
Time be controlled effectively with between 2-3 months − China’s annual GDP growth for 2020 would
of economic shutdown end up roughly flat.
Economic Partially effective − New case counts peak by end April and  In Europe and the US, monetary and fiscal policy
Policy interventions. declines by June with stronger public health would mitigate some of the economic damage
Response: response and seasonality of virus. with some delays in transmission
− There is a strong resurgence that begins after
Public Rapid and
the virus was contained at the end of Q2.
Health effective control
Response: of Coronavirus
spread.
Most countries expect to experience significant decline in GDP in Q2, which would be
the first time since WWII.
Source: COVID-19: Briefing Materials, McKinsey, 2020

GDP drops to its lowest point globally in Q2
COVID-19 Scenarios – A3 (GDP Impact)
REAL GDP GROWTH – COVID-19 CRISIS Real GDP Time to
Local currency units indexed, 2019 Q4 = 100 drop 2019 2020 GDP return to
Q4-2020 Q2 growth pre-crisis
World United States Eurozone China1
% change % change Quarter
115
China -3.5 -0.5 2020 Q4
110
105
100 USA -8.0 -2.4 2020 Q4
95
90 World -5.3 -1.8 2021 Q1
85
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2021 Eurozone -10.1 -4.7 2021 Q2
1 Seasonally adjusted by Oxford Economics
By the end of 2020, GDP will have recovered to the pre-pandemic levels for most
countries.

Under the A1 scenario, we endure a slow, global recovery—
there is severe and large-scale human and economic impact
COVID-19 Scenarios – A1 (Overview)
DESCRIPTION
SCENARIO Slow Global  The Coronavirus contains to spread globally with no seasonal decline.
A1 Recovery  This results in healthcare systems being overwhelmed and crashing in multiple countries, especially among the
poorest (which test is still very far behind currently).
 There is severe, large-scale human and economic impact.
GDP IMPACT EPIDEMIOLOGICAL SCENARIO ECONOMIC IMPACTS
 China would need to clamp down on regional  China would recover more slowly and would also
recurrences of the virus. be hurt by falling exports to the rest of the world.
GDP Its economy could face a potentially
 In the US and Europe, containment measures of
unprecedented contraction.
Time the virus fail within one quarter
 The US and Europe would face a GDP decline of
− These countries are thus forced to implement
35-40% at an annualized rate in Q2.
Economic Partially effective some form of physical distancing and
Policy interventions. quarantines throughout the summer. − Economic policy would fail to prevent a huge
Response: spike in unemployment and business closures,
creating a far slower recovery even after
Public Effective, but COVID-19 virus is contained.
Health insufficient
 Most countries would take more than 2 years to
Response: measures; thus,
recover to pre-virus levels of GDP.
Coronavirus
spread rebounds.
Most countries will take over 2+ years to recover to the pre-pandemic GDP levels.

The GDP shows a gradual U-shape recovery stretching multiple
years
COVID-19 Scenarios – A1 (GDP Impact)
REAL GDP GROWTH – COVID-19 CRISIS Real GDP Time to
Local currency units indexed, 2019 Q4 = 100 drop 2019 2020 GDP return to
Q4-2020 Q2 growth pre-crisis
World United States Eurozone China1
% change % change Quarter
115
China -4.2 -2.3 2021 Q2
110
105
100 USA -11.1 -8.7 2024 Q2
95
90 World -7.2 -5.7 2022 Q4
85
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2021 Eurozone -13.2 -10.6 2024 Q4
1 Seasonally adjusted by Oxford Economics
By the end of 2021, we see the GDP at still over 10% below that of 2019 for the US and
Europe.

Contents
 Overview
 Appendix

Organizations should take immediate actions now
Immediate Actions to Take – Overview
There are 6 immediate and critical actions organizations should take right now.
2 4 6
1 3 5
Set up a Stabilize Help the

Cross- the Supply Community
functional Chain
Response
Protect Team Ensure Practice
Employees Sufficient Customer-
Financial centric Design
Liquidity Principles
Note these immediate actions are guidelines—each organization should do a detailed

analysis of its specific situation to best manage the crisis.
Source: How Companies Can Respond to the Coronavirus, MIT Sloan Management Review, 2020; Coronavirus COVID-19: Facts and Insights, McKinsey, 2020

In an effort to protect employees, there are steps we can and should take
Action – Protect Employees (Overview)
For most organizations, Business as Usual (BUA) is not an option. As this is a
literal life or death situation for people, organizations need to make the protection
of employees a top priority. To this effect, there are 3 things we should do.
For more information and
1 Provide clear communication to employees on what to do.
guidance on these areas, refer to
 Foremost, we need to provide clear, simple language to local managers on these resources available at Flevy:
CRITICAL ACTION how to deal with the Coronavirus pandemic. These recommendations
Business Continuity Planning
should be consistent with best practices outlined WHO, CDC, and other
(BCP), Disaster Recovery (DR),
health agencies.
and Crisis Management
Protect Employees 2 Provide autonomy and decentralize decision making. Every organization should have
 Secondly, we should also provide autonomy to local managers, so they feel Business Continuity, Disaster
empowered to deal with any quickly evolving situation. With that said, Recovery, and Crisis Management
corporate should also monitor and ensure guidelines are being safely Plans in place. They also be
followed. revisited regularly to ensure
relevancy. More resources:
3 Provide an infrastructure for remote work.
https://flevy.com/business-
 For any crisis, telecommuting has been an important tactic for maintaining
toolkit/business-continuity-planning
operations. To this point, do the following:
Remote Work / Virtual Teams
– Allow employees to telecommute.
– Train our leaders. Leaders should be sensible and reasonable in their https://flevy.com/business-
expectations as to when workers are available for work. toolkit/virtual-teams
– Identify employees who are most crucial to maintaining business
continuity. Ensure these employees have the proper tools and
infrastructure to work remotely.
– Develop a disaster recovery scenario that incorporates telecommuting.
We should conduct Scenario Planning to generate ideas about how to pull together
the capacity to resume operations in a limited form.

To properly combat this crisis, we need a Coronavirus Response Team
that’s cross-functional and reporting directly to Leadership
Action – Set up Response Team (Overview)
We should set up a cross-functional Coronavirus response team. By cross-functional, we mean the team should include
members from every function and discipline within the organization. The leader of the team should report directly to the CEO.
This response team will have several workstreams, focused on the following areas:
c
CRITICAL ACTION
1 Nerve Center Coordination and communication with relevant constituencies.
Set up a Cross-
functional
Response Team 2 Employee Protection Employees’ health, welfare, and ability to perform their roles.
3 Financials Stress Test Financial stress-testing and development of a contingency plan.
4 Supply Chain Management Supply Chain monitoring, rapid response, and long-term resiliency.
Sales, Marketing, & Customer

5 Engagement
Sales and Marketing responses to demand shocks.
Note members of the response team will need to dedicate most of their time to virus
response.

There are 5 focus areas—or workstreams—for our Coronavirus Response
Team to work on
Action – Set up Response Team (Workstreams)
Define, align leaders on potential scenarios.
Create ‘single source of truth’ about the headwinds.
Run table-top exercises for tough decisions.
1 Nerve Center Provide clear policies and guidelines.
Ensure transparent two-way communications.
Monitor issues on near real-time basis, with rapid response.
2 Employee Protection Track adherence to policies.
Support global response efforts.
Run financial stress test for all scenarios.
3 Financials Stress Test Define trigger-based portfolio of actions.
Update demand forecasts.
Map exposure to suppliers (Tiers 1, 2, 3) estimate impact.
4 Supply Chain Management Support supplier stability and operational re-starts.
Act on part rationing, inventory, logistics.
Drive greater supply chain risk management in the medium term.
5 Sales, Marketing, & Customer Engagement
Ensure customer transparency (B2B context).
Define plan for priority growth segments.
Refresh customer loyalty programs, incentive plans.
Note how these workstreams align with the other critical, immediate actions to take.
Source: Coronavirus COVID-19: Facts and Insights, McKinsey, 2020

Further, we need to ensure sufficient liquidity, as well as stabilize our
Supply Chain
Actions – Liquidity and Supply Chain
Recommended resources from Flevy:
With few exceptions, most organizations will suffer financially. In particular,
smaller organizations will find it difficult to survive the crisis and potential
recession. Cost Management & Optimization
Here are 4 things to focus on in terms of liquidity and financial https://flevy.com/business-
considerations: toolkit/cost-management
c
CRITICAL ACTION 1 Have at minimum 3 months of 3 Have an adequate buffer stock of Cash Flow Management
cash at hand. crucial parts and other inputs on hand.
Ensure Sufficient 2 Know what your options are for 4 Try to get an understanding of how toolkit/cash-flow-management
Financial Liquidity extending loans, terms, and prepared key suppliers and other
other short-term obligations. stakeholders are for an unexpected
event.
Much of the activities related to Supply Chain Management relate to

medium-term risk management in our Supply Chain. In the aftermath,
there are long-term actions to take related to Business Continuity
Management (e.g. supplier regional diversification). Supply Chain Management
c toolkit/supply-chain-management
CRITICAL ACTION
Digital Supply Chain
Stabilize the toolkit/digital-supply-chain
Supply Chain

Lastly, we need to stay close to our customers and also support our
community
Actions – Customer and Community
Recommended resources from Flevy:
In staying close and engaging our customers, we should ensure customer
transparency and apply Customer-centric Design (CCD) principles. Customer-centric Design (CCD)
Stream
https://flevy.com/browse/stream/cus
tomer-centric-design
c
CRITICAL ACTION Streams represent our most
comprehensive offerings. We
Practice currently only have 12 available
Streams:
Customer-centric
Design Principles https://flevy.com/pro/streams
In times of crisis that affects the community, it is important and morally

responsible for an organization (particularly larger ones that can deliver
stronger impact) to take an active role in helping the community at large.
If not already, we should adopt strong Corporate Social Responsibility (CSR) Corporate Social Responsibility
practices. Here are some important activities: (CSR)
c
CRITICAL ACTION  Target nonprofits and community outreach organizations in your local area. https://flevy.com/business-
 Encourage our employees to volunteer. toolkit/corporate-social-
responsibility
Help the  Let others know what our organization has done. The communication should
Community include only the most pertinent details, including the amount of funds
committed, the key beneficiaries and recipients, and what you aim to achieve
with your donation. Within it, include a quote from our leadership team.

Contents
 Overview
 Appendix

The appendix includes our old scenario analysis conducted in early March
Appendix Slides
The appendix includes slides around 3 broad economic scenarios—a quick recovery, a global
slowdown, and a pandemic-driven recession. These scenarios were based on research
conducted by McKinsey in early March.
Due to the rapidly accelerating situation of the COVID-19 crisis, these scenarios are no longer
valid. We have kept the original slides in the appendix for reference.
We hope you can leverage these slides to help guide and manage your organization
safely and successfully through this crisis.

This presentation breaks down 3 potential economic scenarios driven
by the COVID-19 global outbreak
3 Scenarios for Coronavirus Disease 2019 (COVID-19) – Overview
This presentation will outline potential results under 3 broad economic scenarios—a quick recovery, a global slowdown,
and a pandemic-driven recession.
1 Quick Recovery 1 Global Slowdown 1 Global Recession
In the Quick Recovery scenario, case In the Global Slowdown scenario, In the worst case scenario, Global
count continues to grow, given the most countries are unable to achieve Recession, the assumptions are
Coronavirus’s high transmissibility. the same rapid control that China similar to that of Global Slowdown,
However, countries are able to managed. In Europe and the United except the virus is not seasonal—i.e.
achieve rapid control, as seen in States, transmission is high but unaffected by spring in the northern
China. The peak in public concern is remains localized, driven by strong hemisphere. Infection cases grow
reached in a 1-2 week timeframe. The countermeasures taken individuals, throughout the year, resulting in
virus is assumed to be seasonal. firms, and governments (at all levels). healthcare systems being
The virus is assumed to be seasonal. overwhelmed for many countries. A
recovery in consumer confidence is
pushed out to Q3 or later.
Note these scenarios are based on a McKinsey article published prior to the lockdown of
several countries, including Italy, Norway, Denmark, and Ireland.
Source: COVID-19: Implications for Business, McKinsey, 2020

Under the Quick Recovery Scenario, most countries are able to achieve
rapid control of the outbreak
Quick Recovery Scenario – Overview
SCENARIO
Quick Recovery
ASSUMPTIONS EXPECTED ECONOMC IMPACT
Public-health  Similar effectiveness to China. China  Recovery is largely complete, including

response Hubei by early Q2.
Seasonality  Virus is seasonal. Rest of  Relatively fast rebound by end Q1 in

world Europe and US after initial acute drop in
consumer demand.
Fatality ratio  Similar to flu.  Other economies (Middle East, rest of
Asia, Africa, LatAm) see varied impact.
Change in  Localized. Working populations change

behaviors some habits but most economic activity
persists.
Countries that have excelled at containing the outbreak include Taiwan, Singapore, and
Hong Kong—as they prioritized health concerns above all economic ones.

The global GDP impact ranges from a 12-32% decline under this scenario
Quick Recovery Scenario – Global GDP Impact
2020 GDP growth, by region, by scenario, %
MIDDLE EAST AND NORTH

UNITED STATES EUROPE CHINA
AFRICA
6 6 6 6 -22%
4 4 4 4
-23% -9% -45% 2
2 2 2
0 0 0 0
LATIN AMERICA SUB-SAHARAN AFRICA EAST ASIA GLOBAL
6 6 6 6
-1%
4 4 4 4
-0.5% -12 to -32%
-30%
2 2 2 2
0 0 0 0
Pre-COVID-19 estimate Quick-recovery scenario
We see marginal impact to Latin America and Sub-Saharan Africa.
Source: Industry reports; Oxford Economics; press articles; World Health Organization; McKinsey analysis

Under the Global Slowdown Scenario, most countries cannot rapidly
control the outbreak—however, the virus is seasonal
Global Slowdown Scenario – Overview
SCENARIO
Global Slowdown
Public-health  Less effective than China. China  Recovery is largely complete, including
response Hubei by early Q2.
Seasonality  Virus is seasonal. Rest of  Europe, US see economic slowdown

world until mid Q2.
Fatality ratio  Higher than or near flu, dependent on  Certain sectors (aviation, hospitality)
health-system response. deeply affected.
 Other sectors, such as consumer, see
acute initial drop but recover by end Q2.
Change in  Mostly local, some general. Greater shift
behaviors in daily behaviors.
We need to balance between over-testing (and overwhelm the healthcare system) and
under-testing (and cause more infections)—both of which have dangerous consequences.

The global GDP impact results in a decline between 40-60%
Global Slowdown Scenario – Global GDP Impact
2020 GDP growth, by region, by scenario, %
MIDDLE EAST AND NORTH

UNITED STATES EUROPE CHINA
AFRICA
6 6 6 6 -36%
4 4 4 4
-74% -59% -74% 2
2 2 2
0 0 0 0
LATIN AMERICA SUB-SAHARAN AFRICA EAST ASIA GLOBAL
6 6 6 6
-20%
4 4 4 4
-38% -40 to -60%
-77%
2 2 2 2
0 0 0 0
Pre-COVID-19 estimate Global-slowdown scenario
In this scenario, we see GDP decline by over 70% for the US, MENA, and SEA.
Source: COVID-19: Implications for Business, McKinsey, 2020

Under the Global Slowdown Scenario, most countries cannot rapidly
control the outbreak and the virus is not seasonal
Global Recession Scenario – Overview
SCENARIO
Global Recession
Public-health  Less effective than China. China  Recovery leads to resumption of pre-
response outbreak routines, which drives new
transmissions; complete by Q3.
Seasonality  Virus is not seasonal.
Rest of  Europe, US see generalized reaction.
world  Global recession.
Fatality ratio  Higher than flu, because of disease
characteristics or insufficient health-  Consumer confidence does not recover
system response. until end Q3 or beyond.
Change in  Generalized.
behaviors
This results in global growth in 2020 falling to between -1.5 to 0.5%.

Download day-to-day trend data and analytics by country from Flevy
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1. Drill down by country 2. View trend data and key stats 3. Download into Excel
Also available in the

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• Relevant best practice
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• Consulting whitepapers
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Coronavirus (COVID-19) : Impact, Implications, & Immediate Actions

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Coronavirus (COVID-19) : Impact, Implications, & Immediate Actions

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Framework Primer

Coronavirus (COVID-19): Impact,

Low system readiness Medium system High system readiness

Low system readiness Medium system High system readiness

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 Scenarios and Stages of Recovery

 Immediate Business Actions

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1 Protect Employees 3 Ensure Sufficient Liquidity 5 Practice CCD

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 Scenarios and Stages of Recovery

 Immediate Business Actions

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Low system readiness Medium system High system readiness

B3 B4 B5 B Less likely scenarios

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Ineffective interventions Partially effective interventions Effective interventions

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Stage 1 Stage 2 Stage 3 Stage 4

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 Scenarios and Stages of Recovery

 Immediate Business Actions

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Readiness to restart Low

This is a powerful framework to help countries—as well as organizations within

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Readiness to restart economy: Low

Journey to the next normal

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The Coronavirus Dashboard is a free, online tool. It

Historical data is sourced from John Hopkins University—access the Coronavirus

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GDP IMPACT EPIDEMIOLOGICAL SCENARIO ECONOMIC IMPACTS

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100 USA -8.0 -2.4 2020 Q4

90 World -5.3 -1.8 2021 Q1

1 Seasonally adjusted by Oxford Economics

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GDP IMPACT EPIDEMIOLOGICAL SCENARIO ECONOMIC IMPACTS

Source: COVID-19: Briefing Materials, McKinsey, 2020

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100 USA -11.1 -8.7 2024 Q2

90 World -7.2 -5.7 2022 Q4

1 Seasonally adjusted by Oxford Economics

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 Scenarios and Stages of Recovery

 Immediate Business Actions

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Set up a Stabilize Help the

Note these immediate actions are guidelines—each organization should do a detailed

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3 Financials Stress Test Financial stress-testing and development of a contingency plan.

Sales, Marketing, & Customer

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Source: Coronavirus COVID-19: Facts and Insights, McKinsey, 2020

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Much of the activities related to Supply Chain Management relate to

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In times of crisis that affects the community, it is important and morally

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 Scenarios and Stages of Recovery

 Immediate Business Actions