Harvey Corporation

TMA QUESTIONS

Part A

Q1. Describe the problems faced by local enterprises due to COVID 19 and their impact.

Discuss how systems dynamic modelling can be used to improve our understanding of the

ways in which an organization's performance is related to its internal structure and

operations policies, including those of customers, competitors, suppliers and other

stakeholders. Identify the main variables of your situation.

Part A

Question 1

The company was co-founded in 1981 by Mr. Ahmed Al-Said who had just returned from his

studies in the United States, driven by a vision of the future inspired by the fast food craze then

sweeping the world. Through it all, Herfy has grown into the Kingdom's biggest and most

successful fast food brand, dominating the Saudi market. It has also become one of the

Kingdom's first fully-integrated food services companies with its own top of the line bakeries

and a state-of-the-art meat processing plant. It Herfy’s restaurants growth beyond the borders of

Saudi Arabia that expanded in Kuwait & Bangladesh.

A novel coronavirus (COVID-19) outbreak was reported in Wuhan, China, in December 2019.

Infecting humans with the COVID-19 virus has caused widespread panic and threatened to

destabilize international economies and social systems. Despite being very contagious, this virus
has spread slowly and consistently over the world. Even though COVID-19 is a significant

health risk, it is also much more. Globally, small and medium-sized enterprises (SMEs) may and

should play a crucial role in halting the escalation of such pressing issues as unemployment,

poverty, and hunger (Fairlie, 2020, p. 729).

The global economic implications of the COVID-19 outbreak emphasize the crucial need to

protect the nation's small businesses. Since the first pandemic case was announced, health and

monetary policy have undergone significant changes. Over the past decade or two, tiny

businesses, or "small and micro companies" to use the business world language, have

significantly expanded due mainly to government support (Fairlie, 2020, p. 730). The destructive

impact of the coronavirus outbreak will make it difficult for most firms to survive in the current

environment for longer than five months. For instance, the a lot of companies were affected

because malls, restaurants, and shops were closed during the lockdown period in Saudi Arabia.

Consequentially, as food enterprise, Harfey is affected by COVID-19 due to a lot of section.

According to Harefy report (2020), the Herfy recorded a good year-on-year growth in its

revenues for the first nine months of 2020 by 6.6%, which was higher than its average for the last

3 years of 4.5%, however, Herfy recorded a weak growth in its revenues by 3.0% during the

third quarter of 2019, which is likely to be Affected by spread on COVID-19. On the other hand,

the margins of gross income and earnings before interest and taxes reached the highest rates

achieved in the last 3 years befor COVID-19 at 32.7% , but 20.5% for the end of 2020,

respectively, due to the new international accounting standards amendments and low sales costs

in the pandemic period.

The COVID-19 pandemic has unquestionably made it more challenging for local companies in

Saudi Arabia since COVID-19 pandemic influences, eating habits in Saudi Arabia have undergone

many transitions that Saudis have replaced traditional foods with fast foods (Noara, ).

Also, large numbers of Harfey customers stop visiting Harfey restaurants and depend on their won foods

at homes. As a result, Harvey customers reduced which further affected the total income of the

company. Not only that but also the performance of the company related to its internal structure and

operations policies, including competitors, suppliers and other stakeholders is also affected.

Most studies of the economy have concentrated on how the credit crunch has hindered small

enterprises (Engidaw, 2022, p. 11). In the face of hardship, the most successful businesses, according to

studies of business strategies, adopt a well-rounded approach that prioritizes both the market and the

spirit of entrepreneurship. Even though, the Harfey opened, there were a limitations to control the

spread of COVID-19 in the Saudi restaurants. The limitations and strict roles in Saudi Arabia conflicts

with the company orders thus a solution in needed for this problem to solve and organize its customers

with respect to governmental laws.

It also helps improve understanding of working policies, as well as those of its customers,

competitors, and suppliers, and to use this knowledge to design high-impact policies that will lead to

growth (Fairlie, 2020, p. 740). Its ultimate goal is to aid in comprehending complicated systems without

the direct involvement and to provide the imagination with the means to visualize the effects of the

business cycle. Essentially, it entails converting a flowchart depicting the complex relationships between

different parts of a measure into a system that employs stocks, flows, and input circles to track how

those consequences might play out under various upgrades.

 ses to protect jobs. Many nations have enacted policies tailored exclusively to the

independent contractor workforce (OECD, 2020). Many nations have enacted policies that allow

citizens to put off payments, including taxes, social security, debt, and even rent and utilities,

until a more convenient time. Reductions in taxes or debt-payment moratoria have been enacted

in several situations.

In addition, some nations are acting to reform public procurement and payment

practices. Loan guarantees have been introduced, expanded, or simplified in many countries so

that commercial banks can increase lending to small and medium-sized enterprises. Some

nations have increased their public sector's direct financing to small and medium-sized

enterprises. To offset the decline in revenue, many governments are providing grants and

subsidies to small and medium-sized enterprises (OECD, 2020). The implementation of telework

is one example of how these policies can help with the here and now, but they also help bolster

small and medium-sized enterprises (SMEs) structurally, which is essential for their continued

success and growth (OECD Policy Responses to Coronavirus, 2020). Certain nations have

implemented special monitoring schemes to track how the crisis affects small and medium-sized

enterprises (SMEs) and improve the administration of policies aimed at helping them (OECD

Policy Responses to Coronavirus, 2020).

References

Canhoto, A.I. and Wei, L. (2021) ‘Stakeholders of the world, unite!: Hospitality in the time of
COVID-19, International Journal of Hospitality Management, 95, p. 102922. Available at:
https://doi.org/10.1016/j.ijhm.2021.102922.
Engidaw, A.E. (2022) ‘Small businesses and their challenges during COVID-19 pandemic in
developing countries: in the case of Ethiopia’, Journal of Innovation and Entrepreneurship,
11(1), p. 1. Available at: https://doi.org/10.1186/s13731-021-00191-3.

Fairlie, R. (2020) ‘The impact of COVID‐19 on small business owners: Evidence from the first
three months after widespread social‐distancing restrictions’, Journal of Economics &
Management Strategy, 29(4), pp. 727–740. Available at: https://doi.org/10.1111/jems.12400.

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