Impacts of COVID-19: Funding Business Operations and Adapting Marketing Strategies
Authors: Sejin Hahn, Sarafat Hossain Supervisor: Jan Bodin
Umeå School of Business and Economics Master's Thesis in Business Administration I, 15 Credits, Spring 2021
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Abstract
Given the enduring COVID-19 pandemic, this thesis set out to reveal an updated perspective of the service-oriented small business experience, particularly in their access and choice of financial resources to fund operations and adapt marketing strategy. By the time this study started, it was clear which businesses had been rising with the new tides of swelled categorical demand vs. those that were persevering like embers in a 'slow burn' state of low income against persistent expenses. Therefore, the research sought to compare the results of marketing experimentation with current plans for increasing resiliency, or enabling robust growth, coming out of the pandemic.
As the quantitative understanding of the business impacts had been generalized, a closer look was needed into what entrepreneurs and small business leaders were thinking about in the present moment, by reflecting on factors for survival / thriving, until this point and going forward. To capture this wide range of perspectives and strategies in formulation, qualitative methods with a diverse set of businesses were selected. Theoretically, customer-centric marketing principles were employed, focusing on three intangible firm resources (of the resource-based view): 1) Stakeholder Relationships; 2) Brand Equity and 3) Knowledge / Capabilities.
With the realization that adequate financing is inaccessible and government support perceivably unreliable, small businesses naturally tested several emergent strategies within the limits of their available resources. During times of crisis and radical change, as entire industry ecosystems are reassuming their fundamentals, companies have the opportunity to maximize and develop their resources, in alignment with differing and changing customer demands.
While the recommendations are tailored for small business and optimistically many, cities are also suggested to take a resource-based VRIO (Value, Rarity, Imitability and Organizability) approach to supporting the economic value and potential of their retail, restaurant and service-oriented business communities.
Applying a modern customer-centric view for the small business resources most potentially valuable and developable, this research contributes a unique crisis-borne framework, which may be conceptually used as a hotbed -- by both internal and external (i.e. municipalities, partners and customers) stakeholders -- for ideating novel marketing strategies and supporting business growth / resilience.
Keywords: Adaptation, Crisis Management, Financial Liquidity, Access to Capital, Government Aid, Alternative Finance, Marketing Strategy, Resource-based View (RBV), Customer-Centric, Stakeholder View, Brand, Authenticity, Knowledge, Capabilities, Marketing Management, Marketing-Finance Interface, Paid Marketing, Organic Marketing, Customer Loyalty, Community and Decision-Making
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Table of Contents 1. Introduction ...... 8 1.1 Subject Choice ...... 8 1.2 Problem Background ...... 10 1.3 Research Gaps ...... 11 1.4 Research Question ...... 12 1.5 Purpose ...... 12 2. Methodology ...... 13 2.1 Research Philosophy ...... 13 2.1.1 Ontology ...... 14 2.2 Epistemology ...... 15 2.3 Literature & Secondary Data Search ...... 16 2.3.1 Literature search ...... 16 2.3.2 Secondary Data...... 16 2.4 Research Design ...... 18 2.5 Research Approach ...... 19 2.4 Data Collection ...... 20 2.4.1 Primary Data ...... 20 2.5 Data analysis ...... 21 3. Theoretical Background Literature review ...... 23 3.1 COVID-19 implications ...... 23 3.1.1 Overview ...... 23 3.1.2 Small Business ...... 23 3.1.3 Categorical Growth...... 23 3.1.4 Social Media Dynamics ...... 24 3.2 Financial Implications ...... 24 3.2.1 Overview ...... 24 3.2.2 Alternate Sources of Finance ...... 25 3.2.3 Government Financial Aid ...... 26 3.2.4 Financial sustainability ...... 26 3.2.5 Business risk...... 27 3.2.6 Business failure ...... 27 3.3 Marketing Strategy ...... 28
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3.3.1 Stakeholder Relationships ...... 29 3.3.2 Brand (Creativity, Authenticity and Equity) ...... 30 3.3.3 Knowledge / Capabilities ...... 31 3.3.4 Marketing Management ...... 31 3.3.5 Customer-centric Marketing ...... 32 3.3.6 Paid Marketing ...... 33 3.3.7 Organic Marketing ...... 34 3.4. Conceptual framework ...... 36 4. Empirical Findings ...... 38 4.1 Profile of the Interviewees & Companies ...... 38 4.1.1 BLANK the Hub ...... 38 4.1.2 Burmans Musik ...... 38 4.1.3 Handelsgården ...... 38 4.1.4 Ankis Tyg & Sy ...... 39 4.1.5 Company XYZ ...... 39 4.1.6 Musikanten i Umeå AB ...... 39 4.1.7 Nollnitti ...... 39 4.1.8 Hi-Fi Klubben Umea ...... 39 4.1.9. Zaion Afrikansk Restaurang ...... 40 4.1.10. Hairdresser ...... 40 4.2 Perception of the Business before COVID-19 Implications...... 40 4.3 General COVID-19 Impact on Business Operations ...... 41 4.3.1 Neutral Impact (n = 2) ...... 42 4.3.2 Positive Impact (n = 1) ...... 42 4.3.3 Negative Impact (n = 7) ...... 42 4.4 Business Response ...... 43 4.4.1 Digitalization & E-commerce ...... 43 4.4.2 Supply Chain Repercussions ...... 45 4.5 Financial adaptation ...... 46 4.5.1 Financial Outcome ...... 46 4.5.2 Government Support and Aid Ineligibility ...... 46 4.5.3 Alternate Sources of Finance ...... 47 4.5.4 Indirect Aid ...... 48
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4.6 Marketing Strategy ...... 48 4.6.1 Demand Forces ...... 48 4.6.2 Organic - Outreach & Events ...... 49 4.6.3 Paid - Ads & Sponsorships ...... 50 4.6.4 Collaborations & Sponsorships ...... 50 4.6.5 Customer Loyalty & Support ...... 51 4.6.6 Marketing Management ...... 51 5. Analysis and Discussions ...... 53 5.1 General Pandemic impact and reaction of small business ...... 53 5.2 Impact of Financial Sustainability ...... 53 5.2.1 Initial Financial Impact ...... 53 5.2.2 Alternating Financial Sources ...... 53 5.3 Role of Marketing ...... 55 5.3.1 The In-store Relationship ...... 55 5.3.2 Shifting to digital ...... 55 5.3.3 Capability Enhancement ...... 55 5.3.4 Paid Marketing ...... 57 5.3.5 Organic Marketing ...... 58 5.3.5 Home Integration ...... 60 6. Conclusion ...... 61 6.1 General conclusion ...... 61 6.2 Contributions...... 62 6.3 Societal Implications ...... 63 6.4 Limitations and Future Research ...... 63 6.5 Quality Criteria ...... 64 6.5.1 Validity ...... 64 6.5.2 Reliability ...... 65 References ...... 66 Appendix ...... 73 1. Questions for Interview Guide ...... 73 2. Zaion - First Addressing COVID-19 (2020, March 17) ...... 76
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1. Introduction
1.1 Subject Choice The authors of this thesis work were two Master's students studying in the business school at Umea University. While the degree areas of focus were separate by finance and marketing, respectively, the common interest was in the ongoing business implications resulting from the COVID-19 pandemic.
The onset of the pandemic was widely unforeseen, and its projected economic impact largely underestimated worldwide. Although regions where the outbreak was first reported, mainly in China and East Asia, had quickly stabilized, new cases of morphing viral variants were still on the rise, at the time of publication (FT, 2021). As highlighted by Craven et al. (2020, p. 2) at the start, businesses lost considerable "irrecoverable" demand across several sectors, notably aviation, tourism, hospitality and restaurants. Nearing the end of Q2'21, the pandemic has proven to be even deeper than their initial forecast of the most pessimistic scenario: 1) By Q3'20 - Global transmission through N. America, Africa and India. 2) Through Q4'20 - Air travel restrictions still in place
Today, India has emerged as the rising concern (beneath #1 US and #2 Brazil), cumulatively surpassing 350k deaths, as of June 7 (JHUa, 2021):
Figure 1. Deaths by Country (until June 7, 2021) Reprinted under the Creative Commons Attribution 4.0 International (CC by 4.0)
Furthermore, travel restrictions by the EU still remain for non-essential travel, including the UK and the US, as of the latest two-week review on June 3 (The European Council, 8 | P a g e
2021). For context on vaccination progress, both those countries currently have 41%+ fully vaccinated populations, leading for relatively larger, developed nations; as Sweden stands at 16%, yet still considered above the world average (JHU, 2021b).
Economically, the uniqueness of COVID-19 is not in the surprise by which the crisis took the world, nor its widespread global impact, but its absence of any financial rooting at inception and the buoyant response of the stock market since its early recovery (Jenyns, 2021, p. 37). Therefore, this crisis has been unlike others -- the Great Depression (1929), the early 1990s recession and the Global Financial Crisis in 2008 -- which were catalyzed by triggers such as high inflation or exposed prolonged financial market failure (p. 37).
Despite resiliency in the corporate sector, the burden of recovering demand, which was largely irrecoverable in nature (Craven et al., 2020, p. 2), was laid immediately and heavily on small businesses, as observed by Fairlie (2020). As the pandemic began to take hold in North America, the US saw its small business activity drop by 22% (3.3M = 15M - 11.7M), as recorded during the initial window between February to April, 2020 (p. 11). Although recovering to -15% by May (p.12), the initial financial impact was expected to have detrimental long-term consequences in the face of a prolonged absence of demand, as the majority of businesses did not have enough cash on hand to cover 3 months of operating expenses (p. 3).
Learned in preliminary conversations with entrepreneurs, many businesses here in Sweden had also been impacted from early-stage losses and still struggling to keep their operations afloat. Some in desperation went so far as to seek out personal loans to keep their struggling businesses alive. Meanwhile, they were also forced to tactically prioritize which bills to ignore from a list of due payments. On the supply side, the banking sector became aware of the need to potentially support businesses with provisional crediting and repayment options; and accelerate digitalization goals for accommodating risk more intelligently (Wu & Olson, 2020).
The research interest of this thesis was, therefore, in understanding key business challenges, specifically in relation to their financial concerns and also the adaptation of their marketing efforts. The intersection, of which, includes choices around the use, or availability, of internal and external means of funding, in supporting the execution of marketing strategy changes catalyzed by COVID-19.
The contribution of this research is in providing a timely update (as society is hopefully signaling the end of the general crisis period with vaccinations) and by examining business adaptations at a later phase of the pandemic than previously researched. In benchmarking against previously observed factors of influence, the study expands, in particular, upon a report of the small business experience in Sweden published by researchers Boter & Lundström (2020). As such, the scientific contributions are objectively two-fold. First, the data from Boter & Lundström's study was collected back 9 | P a g e in October 2020. Therefore, the timing was assumed appropriate for an update, or a reflection since then, by contrasting more recent data from 6 months later (in April 2021). Second, as their report was survey-based, this study wished to dive deeper into the narratives of select business owners & operators to examine any phenomena that potentially could be better captured more fully through qualitative research.
Boter & Lundström's work served as the foundation for this study, as it provided a significant amount of evidence in this area of interest, and already illuminated several potential research gaps to explore. For companies with acute demand for external financing, for example, we wished to understand their coping mechanisms, especially as they became increasingly more risky and unattractive loan / investment prospects in the face of tightened financial supply (2020, p. 13). Before further justifying this foundation, a summary of their findings is presented below, in order to more clearly introduce our updated study, with its additional considerations, on the problem.
1.2 Problem Background COVID-19 forced businesses to reevaluate their entire existence, from their previously set strategic direction down to their tactical operations. Unavoidably, some enterprises suspended operations and laid off employees, contributing to the economic downturn (Obrenovic, 2020). Going forward, enterprises needed to reevaluate how they would continue to finance and market themselves. The novel coronavirus had suddenly disrupted society and the economy, at large. But, its prolonged presence is what continued to present such a wide range of novel opportunities & threats from which businesses chose, or were forced, to adapt.
Business impact from the coronavirus, as shown in the first half year following, was mixed, albeit mostly negative (Boter & Lundström, 2020, p. 13). Sudden and, for some, sharp reductions in revenue, made it unavoidably difficult to continue covering fixed costs, as would have been predicted by Keasey & McGuinness (1990). Thus, in the effort to reduce variable costs, some measures inevitably involved 'liquidating' human capital, which (prior to affecting team morale and productivity) ranged materially in the form of wage reduction to layoffs (Boter & Lundström, 2020, p. 13; Obrenovic, 2020)
Governmental support, in the Swedish context, offered to ease such burden by allowing approved companies to reduce or defer some of the various costs associated with their employer contribution for workers. Among such state aid programs, cost reduction mechanisms were the first options that most businesses turned to and the most popular in use overall (Boter & Lundström, 2020, p. 17).
Difficulties, however, can outweigh the potential benefits of temporary relief. Despite the formal existence of various programs, some companies in crisis resorted to layoffs, without making use of any such support at all (Boter & Lundström, 2020, p.18). This decision to forgo applying to any aid program invoked our concern for further 10 | P a g e examination, as the possible reasoning could be individually motivated or point to a systemic issue, especially for responding swiftly and fully in times of acute difficulty. Furthermore, because such sudden and prolonged disruptions are so difficult to foresee, our study was interested in how entrepreneurs had been preparing for this yet to be known pandemic and were adjusting afterwards to the 'new normal'.
Adaptability was a key interest of the study. As of October 2020 (seven months into the pandemic), despite reported business difficulties, most entrepreneurs were managing without the concern for additional financing (Boter & Lundström, 2020, p. 18). Did the demand for external financing eventually increase, in contrast to heightened precaution and restriction to financing; and how did fundraising those efforts go? Anecdotally, the authors of this study were aware of some businesses asking for extra support by reaching out to their network over social media. This type of 'marketing', intended to drive additional purchases, was even eliciting donations from loyal stakeholders. This reminded us of our previous work experience with corporate relationships, in asking customers to 'pull-in' their forecasted demand, in order to help the company book revenue early and meet earnings expectations. So, in what other ways were small businesses able to influence or increase sales?
1.3 Research Gaps Considering the scale and prevalence of the pandemic, there were presumed to be substantial research gaps in this area. Seemingly relevant for study were qualities of a company for responding to new stressors, such as agility and creativity (Kubíčková & Toulová, 2013; Valdani & Arbore, 2015). For those that had to cut costs, how did that affect their market positions, especially if marketing was constrained by reduced campaign budgets or manpower? Despite having less resources, which is generally true anyways of smaller businesses, to what effect did the ability for agile decision-making allow these companies to better adapt within their dynamically changing markets? When the pandemic first struck, some companies were compelled to reset their advertising and marketing communications (Jenyns, 2021, p. 36), in order to better conform to new social norms and customer expectations. Urgency as a tactic to trigger purchases and the effectiveness of other inauthentic means had to be reevaluated (Antúnez et al., 2021). As other market competitors changed their approaches, how did companies feel forced to follow suit vs. attempt to differentiate themselves?
In light of changing industry and consumer purchasing trends, how did companies extend their offering with new products or services; or seize different business opportunities, in adjacent market segments or entirely new ones altogether? As an updated reflection to Boter & Lundström's report, our study was afforded the benefit of a longer time horizon to potentially uncover different phases of such "effectuation," or shifting towards better opportunities for the company (Boter & Lundström, 2020, p. 4, Sarasvathy, 2001; Reymen et al., 2015). To clarify, the study sought to also observe this phenomenon for companies that were benefiting positively from COVID-19. Therefore, 11 | P a g e reiterating the focus of evaluating changes in financing and marketing strategy, for companies in a mode of growth, this research sought to uncover how such growth was fueled -- either organically or by securing additional financing to support efforts for additional market capture and expansion.
1.4 Research Question How has COVID-19’s impact on small businesses influenced access to financial resources and shaped their shifts in marketing strategy?
1.5 Purpose The primary focus of this degree project, considering that most businesses were hit negatively, was to develop a deeper understanding of how businesses coped with the crisis. Because its impact reverberated, not only throughout all sectors of the economy but all facets of businesses (Craven et al., 2020 p. 2), this study attempted to understand the various financial options that these small businesses were able to consider. Such financial options were extended to include government aid, to discover how local retailers and service-oriented businesses were able to benefit from any sort of stimulus, provisional loans or other forms of financial aid.
Especially when external aid was unavailable and/or budget limited, the research aimed to understand the marketing strategies and initiatives implemented to navigate through such an extended period of crisis. To make sense of the collected data and analyze the business changes by specific dimensions, a conceptual framework was to be employed using a blend of theory from the resource-based view for marketing management with a particularly customer-centric approach. The hope of which was to also formulate practical recommendations for small businesses to manage through and beyond the crisis.
This research aims to extend recent literature on how small businesses, in reaction to the COVID-19 pandemic, have changed and adapted their mix of internal & external financing and the strategies for marketing their offerings. The report examines the driving forces behind such decisions, and to what extent choices were available, in relation to their potential risk-reward trade-offs. Thus, the study is keenly interested in those businesses that were most impacted, either positively or negatively, and thereby underwent the most radical transformations, as compared to their pre-pandemic baselines. As such, the study explores business reactions and adaptations, the most drastic of which could be characterized from a desire between growth and survival.
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2. Methodology
This research builds upon the aforementioned report of the small business experience in Sweden, published by researchers Boter & Lundström (2020). The two serves as academic members within a wider research council commissioned by Almi Företagspartner AB, a state-owned financing and business development group. The group's role is to complement private market services in these areas, which can range: from early-stage investing through their venture capital subsidiary Almi Invest; to later- stage, growth financing for more established companies. This breadth of perspective, as shown by the diversity of companies covered, was also reflected in the report, which analyzed differences not only in a company's maturity, or stage of growth, but also other factors such as: ● Industry -- manufacturing or service-driven ● Company -- employee count (from 5-49); revenue ● Operating environment -- size of municipality; sales reach (local to international) ● Background of the entrepreneur -- age; gender; domestic vs. foreign-born
To examine the effect of underlying business conditions in dictating financing and marketing initiatives, the extensive Almi survey study was deemed an appropriate starting point. Interpretation of their research findings were adjusted for the above factors, some of which being considerably influential in the results. As expected, the companies that were most negatively impacted were: service-driven, smaller and whose sales reach was more locally confined. As such, our research set the boundaries around companies within this negative impact area as the delimitations for the study. This narrowed subset would allow for sharpened comparing & contrasting of those previous factors of influence to the contexts of our primary data.
2.1 Research Philosophy Constructivism appeared the paradigm most appropriate for this study, as the core of the study was to understand changes and hesitations to decision-making, induced by the enduring economic conditions of the pandemic. Inquiry into the minds of business leaders is an inherently subjective endeavor. This is especially true when eliciting self- report of their perspectives, in varying business environments convoluted further by government 'recommendations', moral obligations to society's vulnerable and the desire / fear to socialize because of COVID-19. Our approach, therefore, chose to follow the constructivist philosophy, so heavily influenced by Lincoln & Guba (2013) and culminating from their methodological contributions to naturalistic inquiry.
The purpose of constructivism is to acknowledge the variance of lenses (p. 33), through which the world is seen, and account for any potential distortion layered on by those of the researchers themselves. This paradigm of qualitative research is not free of criticism,
13 | P a g e which is mainly concerned about its rigor. Ironically, the late Guba himself -- with degrees in mathematics, statistics and measurement -- was raised from the very side of science that would come to oppose his constructivist interest in "rigorous" qualitative research (Schwandt, 2013). In other words, the most critical attacks come from strict positivists (p. 82), who may be overly concerned with the measurement of phenomena solely realized in the physical reality (p. 11), thereby disregarding any meaning ascribed by social constructs.
2.1.1 Ontology Ontology refers to "assumptions about the nature of reality” as described by Saunders et al. (2019, p. 133). Explaining further, these ontological assumptions shape the way researchers observe and analyze their objects, in this case being: businesses, management, stakeholders (individual and organizational) and events. Despite a small portion of businesses that did not report revenue impacts from the pandemic (Boter & Lundström, 2020), COVID-19 was considered to have affected all businesses, at least operationally, if not more structurally at the organizational level.
As companies adapt to new environmental forces, Saunders et al. (2019) highlight that even organizational change done ''wrongly' can threaten the health of already stable business models. Therefore, resistance to change is a common phenomenon that is expressed in varying degrees of intensity yet exerted continuously within an organization. Our presumption was that COVID-19 caused organizational change in small businesses, which reshaped their operating models, temporarily or perhaps more permanently.
As the pandemic had continued on for more than a year, this thesis observed if and how organizational changes were required to fit both new financial models and marketing strategies. Since these changes are directed by management, which Saunders et al. (2019) distinguish as a social entity that is separate from the organization at large, we regarded the individuals that comprise management as having their own unique perspectives. In the words of Collis & Hussey (2003, p. 48), “The world is socially constructed and only understood by examining the perceptions of human actors.” Accounting for the different managerial actions taken, during interviews with retail and service-oriented business leaders, the research sought not only to understand how they arrived at their decisions but also valued their judgements for sustaining their businesses.
The ontological position of this study, therefore, naturally leaned towards subjectivism. By incorporating assumptions often found in the realms of the arts and humanities, the study acknowledged that social reality is constructed from the perceptions and consequent actions of people within social settings (Saunders et at., 2009, p. 137). This assertion that reality is built through social interactions, in which individual actors
14 | P a g e create partially shared meanings and realities is known as social constructionism (Saunders et al., 2009), which served as the basis for the study's ontological perspective.
Small businesses were forced to change from business as usual. Whether the changes concerned the obtainment of new external funding or triggering a new advertising campaign on social media, the decision-making process was determined by social actors. Therefore, this research considers financial implications and marketing strategies as phenomena that are influenced by individuals that comprise organizations. Such social actors exert influence, to varying degrees, over issues such as how the organization should reduce costs or whether to obtain new funds during a crisis.
2.2 Epistemology That which can be viewed as acceptable knowledge in a particular field is defined by Saunders et al. as epistemology (2019, p. 145). The authors state further that universal rules and laws can help not only to explain but predict behaviors and events in organizations and, in this case, also small businesses. In this way, the relationship to knowledge is ascertainable, as perhaps most clearly alignable in the positivist research process, which starts from existing theory to developing, testing and potentially confirming a hypothesis; that, in turn, invites further validation and development (p. 146).
Further paying respect to the positivist tradition, we as researchers took efforts to detach our individual biases from the objects of study by interviewing and analyzing the data critically in pairs, debriefing together on the findings both immediately after the interviews and several days, or even weeks, later (Saunders et al., p. 144). Furthermore, by adhering to critical realism, which accepts knowledge to be historically situated and transient, the facts and causal explanations presented in this research intrinsically acknowledge their contribution from previous and evolving social constructions. Postmodernism concedes on this point that what counts as ‘truth’ and ‘knowledge’ is determined by dominant ideologies. In interpreting the different voices represented in this study, attention is also given to their manner of speech -- the subtle absences of information, momentary silences and potentially oppressed meanings. Finally, in conveying the findings, the research is guided by pragmatism, which takes careful consideration into what may be reflected as truth theories and meanings outside of their dependent contexts (Saunders et al., p. 145).
As this research would be focusing on narratives and perceptions as the basis of the data, interpretivist principles were carefully accepted, as to avoid indoctrination to the study's theoretical background or conceptual framework (Saunders et al., 2019, p. 145). Interpretivism emphasises the distinction of humans, from physical phenomena, in the meaning they create. Although the study sought to maintain a level of rigor in its methods, analogous to those prescribed in natural science research, the social elements for interpreting human behavior and perspectives were considered accordingly, as 15 | P a g e recommended by Saunders et al. (2019, p. 148). And without being able to implement their suggestion of incorporating a variety of perspectives from within a company, it was considered even more critical for the study to accurately extrapolate the phenomena of an entire small business from the sole participant interviewed, regardless of their dominant role as a owner / operator.
2.3 Literature & Secondary Data Search
2.3.1 Literature search In reviewing relevant literature, the authors maintained an open perspective to possible foundations for the study, yet with the ultimate goal of perceiving potential gaps in the existing bodies of research. During the process of accumulating knowledge on the topics, the authors were able to more clearly identify the relevancy of existing work. The collection of secondary information allowed for a thorough and inexpensive search for answers to the study's initial questions, as appreciated by Stewart & Kamins (1993, p. 2). However, the process was perhaps not as relatively quick and easy, as hoped for. To find ample research that was both highly relevant and recent was admittedly challenging. Even more so, the synthesis of studies, which contained similar and disparate elements, proved to be more laborious than previously anticipated in zeroing in on the most important research gaps. With persistent gratitude for the secondary information, so painstakingly collected and archived from previous researchers, it established a good starting point, with a more unique focus among the gaps of extant literature (Hart, 2001, p. 3).
Essential to the literature search was forming the basis of the study's methodology from the data collection techniques proven successful in other studies (Hart, 2001). As the primary data of the study involved human participants, some of whom were found to be busy and initially reluctant, an important factor to consider in preparation was that there would only be one opportunity, per interview granted, to collect the necessary data. In other words, each conversation occurred for the first, and only, time. Therefore, to achieve the best possible outcome, it was critical not to lose or distort the information being conveyed by the interviewee (Saunders et al., 2009, p. 69). As such, in order to achieve investigative results of the highest quality, significant preparation was made to avoid bias during the data collection process and improve real-time interpretation of the perceptions, opinions and knowledge of the interviewees and their respective companies.
2.3.2 Secondary Data While most of the news, information and concern the world over revolved around COVID-19 for most of the year 2020, and throughout this research, the inception of the study started with a search through the academic literature on its business impact. With
16 | P a g e building occupancy restrictions and closures, however, even the traditional sources of secondary sources, namely printed versions of text in libraries (Hart, 2001), were rendered considerably more inaccessible. For example, the authors' library at Umeå University mandated that visits were to be avoided unless "necessary" and, on May 11 (2021), updated that it was "no longer possible to make book requests and previously made requests will be cancelled".
Figure 2. Umeå University Library (remote)
Thankfully, the needed scientific journals and articles were instead plenty accessible via the convenience of the Umeå University online library database, shown in Figure 2. In addition to querying across the many academic journals subscribed to by the university, other search engines were used to surface related research, such as Google Scholar, Academia.edu and Semantic Scholar, which was launched by AI2 (the Allen Institute for AI, the namesake research non-profit of the late Paul Allen of Microsoft).
While the impetus for the research called for an understanding into the breadth of relevant topics across the extant literature, the initial phase also led into observations of how other research was being conducted. Examining the drawbacks and limitations of those studies, this study eventually established its scope among the potential research gaps. To get there, the process continued to refine the lens in which to scan over and read into the existing bodies of work until uncovering possible themes for the research.
A recurring theme around COVID-19 was: 'crisis'. Somewhat more surprising were second-order themes, such as how quickly businesses reacted in making decisions of financial impact vs. the speed at which government aid flowed through the economy. On the marketing side, another theme emerged as what we described as 'opportunistic branding', wherein companies 'COVID-washed' themselves to improve their image (Antúnez et al., 2021; White et al., 2020). At a higher-level, the patterns began to reflect a dichotomy -- between those simply trying to survive, or adjust at the very least, vs. those capitalizing off of the change in tides toward domestic life. To properly explore research gaps among these emergent themes, a comparison was in order of previous financial crises in recent history and the resulting frameworks for managerially navigating during such times.
As the COVID-19 pandemic was unprecedented in many ways, narrowing the search query by 'COVID' + any [topic of interest] led to results with novel findings across diverse fields of research. First and foremost, the global pandemic was defined as a crisis of public health. The lockdown of national borders and local economies inevitably resulted in financial distress; combined with sociological impacts from a lack of
17 | P a g e socialization or, for a significant some, losing loved ones in quarantined isolation (Dong & Bouey, 2020). Thus, the related areas of active research were manifold and linked to the formative topics of interest for this study, as evidenced by any query of 'COVID' + ['finance', 'risk', 'myopia', 'pricing', 'marketing', 'advertising', 'messaging', 'purchase behavior', 'entrepreneurship', 'business models', 'small business', 'retail', 'digital', 'resilience', 'readiness', 'opportunity', 'innovation', 'expansion', etc.]. This review process eventually led to the research of Boter & Lundström (2020), which was set as the foundation for this study on the array of small business impacts in Sweden from COVID-19. The next critical consideration was in refining a research design that would lend itself to, ideally, help fulfill the research gaps identified in the secondary data.
2.4 Research Design The belief of this research is that its qualitative methodology was better fitting to account for a variety of social influences and in providing a clearer view of the financial and marketing impacts on businesses during the pandemic. Therefore, in a broader sense, this study opted for a mono-method approach of conducting interviews, as the sole source of primary data. As mentioned, however, this study does build upon a previous report based upon quantitative survey data, which in that regard emulates a quasi-multi-method approach.
Of the seven research methods categorized by Saunders et al. (2019), interviews or what they define more generally as "surveys" were deemed to be the most effective balance between rich description and control over the information extracted. This was not concluded from other types: experimental, grounded theory, action research, archival research, case study, ethnography, and narrative inquiry.
A total of 10 interviews were conducted with managers / owners of small businesses in Sweden. The study was able to gather relevant and reliable data by carefully preparing an overly thought-out interview guide that was employed flexibly. Therefore, throughout each interview, the business decisions and reasoning of the participants, along with their attitudes and opinions could be taken into consideration, with the aim of collecting the most complete data sample possible (Saunders et al., 2019).
The research is identified to be cross-sectional, as it compared different time periods throughout the pandemic (Saunders et al., 2019). Over the half-year period between the Almi report (Boter & Lundström, 2020) and ours, the expectation was to reveal additional business developments. For context, at the time of this study, in the midst of the virus's prevalence and continually high rate of infection, vaccination was not yet accessible for the wider population, and still only limited to the elderly. Also, despite the fact that the pandemic had already been underway for 6 months, by the time the base report's data was collected, October 2020 marked just the beginning of the 1st "wave" of infections.
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Figure 3. COVID-19 Infections per Week in Umeå (as of week 13)
Therefore, from a timeline perspective, the Almi report could be viewed as merely a midway point between the start of the pandemic (in March 2020) and when this study collected data (in April 2021), or along the descent of the 2nd wave. One caveat is that although the reflections captured are backwards-looking, the data was collected at a single point in time and, thus, should not be considered a proper longitudinal study. Finally, it was acknowledged that consumption activity would probably not be linked perfectly to the actual infection rate, the study assumed that the impact of big news regarding its spread could be directly felt by businesses and potentially bring about significantly lasting changes to patterns in consumer behavior.
2.5 Research Approach This study took a deductive approach, thereby starting the research with relevant theories from across the academic literature, to date, as a foundation in designing the study and, upon which, overlaying the data collected (Saunders et al., 2019). The framework for which extracted existing, yet inherently recent, findings from other COVID-19 studies that focused on managing financial and marketing strategy during the crisis. To clarify, the approach of this study did not take an inductive approach, which generates new theories from the phenomena interpreted by the collected data (Saunders et al., 2019). While practical recommendations are made according to the novel context, the study opted against the inductive approach because it was concluded better to ground new pandemic phenomena within the frameworks of established and
19 | P a g e sufficiently encompassing theory. The intended benefit of the deductive approach was, therefore, to get a better "feel of what was going on, so as to better understand the nature of the problem” (Saunders et al. 2019, p. 118), which was novel and unique but certainly analyzable for small businesses of study.
2.4 Data Collection
2.4.1 Primary Data Following the expertise of more prominent and seasoned researchers, this study chose semi-structured interviews as the optimal method for collecting its qualitative primary data. Despite taking a deductive approach, there was no amount of preparation using secondary data that could have exactly predicted the responses received. Therefore, while the structured interview method is great for completely predetermined questions, many intended questions simply could not have been asked in the exact same standardized order for all respondents (Zhang & Wildemuth, 2009), let alone allow for more emergent probing into certain details. However, because the interview guide was considerably informed from the quantitative questionnaire of the Almi study, an unstructured interview method would not have sufficiently confined the conversation to our predefined framework (Zhang & Wildemuth, 2009).
In anticipation of the above scenarios, the study is thankful to have been guided towards semi-structured interviews, which allowed a possibility of both closed and open-ended questions. While the interview questions were prepared, the sequence was adjusted and questions added, based on the context of the participants' responses and conversation flow (Zhang & Wildemuth, 2009). This flexibility was favorable, while still covering the planned topics necessary. Especially in building rapport and welcoming the interviewee to more fully develop certain responses of a more difficult nature, the semi- structured interview approach allowed for discerning the appropriate timing to probe deeper, in a respectful and thereby effective manner (Saunders et al., 2019, p. 315).
This study analyzed 10 interviews with small businesses in Sweden. The interviewees were composed of managers, owners or those acting as both. Indeed, all of the interviewees could be largely classified as managers, as the majority of owners concurrently served as active managers. The interviews were conducted primarily face- to-face in Umeå, with the exception of one via telephone with a company based in Gothenburg. The in-person interviews were all attained by walking into the stores at periods of seemingly low activity. While this approach allowed for the interviewee to speak more naturally in a familiar surrounding, many interviews were unattainable, mostly due to conflicts in current availability or a withdrawal from request for data collection. The small businesses successfully interviewed could be categorized in the sectors of: restaurant, fashion & clothing, beauty, music records + instruments, home entertainment equipment, home decor and handcrafted items.
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More detailed company profiles are presented later (in the Empirical Findings section).
Table 1. Interviewee List
No. Name of Profile of Length of Method of Years in Company Interviewee Interview interview Operation
1 BLANK - The Owner Face-to-face Hub 31:48 0
2 Burmans Musik Owner 13:13 Face-to-face 110
3 Handelsgården Co-owner 14:19 Face-to-face 35
4 Ankis Tyg & Sy Owner 24:18 Face-to-face 20
5 Company XYZ Manager 31:12 via Telephone 3
6 Musikanten i Manager Face-to-face Umea AB 14:01 47
7 Nollnitti Owner 15:55 Face-to-face 22
8 Hi-Fi Klubben Manager Face-to-face Umea 18:03 41
9 Zaion Afrikansk Owner Face-to-face Restaurang 29:51 3
10 Hairdresser Manager 26:13 Face-to-face N/A
The interviewees were thoroughly and transparently informed, regarding the purpose of the study; and consented to the interviews, and their recording, beforehand. Every interviewee was also offered the option to preserve their company, and relationship therein, in full anonymity, with the right to omit any particular details afterwards. The face-to-face interactions, body language, and formal approach of the interviews favoured the outcome of the research.
2.5 Data analysis Qualitative data analysis procedures assist in understanding the meaning of complex open-ended responses, which naturally arise from in-depth interviews, as described by Saunders (2009, p. 475) All the interviews were conducted orally in English between the owner / operator and the research pair, for immediate debriefing afterwards. Furthermore, all interviews were audio-recorded, then subsequently transcribed in the actual words of the participants, following recommended guidelines (Saunders, 2007, p.
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475) . Recorded conversations on the electronic device were ensured for privacy and that none of the data was leaked during or after uploading. The recorded conversations were transcribed with machine-assistance, via the cloud service Otter.ai. The technology was able to roughly group, identify and separate between the interviewers and interviewees, which was then edited manually to ensure accurate data generated from the transcriptions (Saunders M., 2007, pg 476). After this, the interview results were categorized thematically by the core firm resources and marketing activities established by the conceptual framework, so that all statements could easily be comparable with one another. From all the interview responses, the researchers categorized words and key statements, to ensure simplicity and optimum results when discussing the data.
There were 4 high-level categories from the data. One of the obvious categories was the state of the business before the pandemic struck. This was done to give the study a better view of how businesses were operating before restrictions took place. The second category focused on understanding all the general changes after the pandemic struck, when compared to their pre-COVID state. The third category focused on their financial state post-pandemic, specifically whether financial support was required, from which source was it taken and the level of difficulty in attaining such support. The fourth category focused on marketing strategies these businesses adapted to cope with the new rules, economic uncertainty and changes from the impact.
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3. Theoretical Background Literature review
3.1 COVID-19 implications
3.1.1 Overview There has been enormous loss of human life and in a very short period of time as the COVID-19 virus spread throughout the world. The business and management community braced themselves for all possible economic impacts of the crisis and attempted to look for methods for long term recovery (Seetharaman, 2020). There have been widespread shutdowns of businesses in order to control the spread of COVID-19. This inevitably resulted in a sudden demand shock, decreasing the demand for goods and services. Seetharaman (2020), noted that many organizations will be struggling for survival, but it also created an opportunity to look for businesses to observe alternative paths. When observing industries, banking and media remained undisputed as seen by Seetharaman, (2020). Seetharaman (2020) noted that these industries are high on product and information intensity which allowed the possibility of complete digitization of their services. These industries are seen as early adopters of new technologies, therefore protecting them from negative business impact.
3.1.2 Small Business The spread of the COVID-19 has created a sudden and sharp shortfall in revenue for firms in many industries. The hospitality industry suffered major shortfalls given the lockdown in major cities restricting travel. The restaurant industry is also regarded as having a high level of business risk which was severely exacerbated during the pandemic (Song et al., 2021). According to Song et al., (2021), 7 out of 10 restaurant owners and operators were forced to lay-off employees and reduce the number of hours worked. The COVID-19 pandemic, in an economical perspective, is considered much different than previous crises in relation to cause, scope and severity (Ding et al., 2021). As stated by McCabe & Erdem, (2021), during the early stages of the COVID-19 pandemic, the interest in visiting businesses decreased around the globe for which most of the businesses adapted to online or takeout orders.
3.1.3 Categorical Growth The COVID-19 pandemic, with its state-mandated and self-imposed lock-downs, fueled some categories of consumption, intuitively, those catering to increased homebound activity (Jenyns, 2021, p.37). In general, spending patterns shifted from purchases normally consumed outside the home to those at-home. Food, for example, was no longer being provided by commercial suppliers to closed-down corporate workplaces that went completely remote; nor were restaurants receiving their usual business lunch
23 | P a g e rush, or much table dining at all for that matter. Therefore, benefiting from this dynamic were the tech-enabled food delivery services and supermarkets.
Higher up on Maslow's hierarchy of basic needs (1943), esteem (p. 381-382) and/or self- actualization (p.382-383) might have driven the motivation and livened demand in the home improvement category. Projects were initiated that might have either been put off until now or newly conceived altogether, activating suppliers across the ecosystem of home furnishing and renovation (Jenyns, 2021, p.37).
3.1.4 Social Media Dynamics A serious concern of the pandemic are the ensuing public health consequences, particularly those exacerbated by business interests. Even beyond the physical harm of the viral variations themselves, social disruption was expressed on social media and noted by certain companies keen on capitalizing off of the increased at-home consumption. As observed by Leung et al. (2020), one theme in the social media ads was of 'buying to cope', in order to persuade consumers to purchase more. Often these ads expressed levity or humor, both through text and visual elements, which were sometimes propagated further voluntarily through user-generated memes.
For better messaging reach and efficacy, some public health officials turned to social media influencers for extra assistance. The NHS (National Health Service) of the United Kingdom, for example in August 2020, acknowledged the importance of engaging their younger constituents not only through the right channels but in a manner for higher likely resonance for its COVID-19 'Test and Trace' service (Iacobucci, 2021; Rahman, 2021). Although the government employed its treasury wherewithal to sponsor famous celebrities and athletes, it also partnered with micro-influencers with as little as 9k followers. Therefore, the fact that a publicly funded institution was willing to explore this type of non-traditional, paid media advertising at such minimal reach suggested implications for even small businesses that employ similar micro-influencer strategies.
3.2 Financial Implications
3.2.1 Overview Financial access serves a critical role in a company's strategic development and growth. As further explained by Cook & Nixson (2000), substantial access encourages entrepreneurial endeavors and employment generation. Such affordances, however, are dependent on characteristics of the business, such as existing employment counts and their level of productive output. In comparison with large, bureaucratic organizations, smaller businesses enjoy advantages of flexibility, in adapting nimbly to market changes, but also face capital constraints that can result in strategic shortcomings. (Kubíčková & Toulová, 2013). Furthermore, the smaller the firm, the less resources it
24 | P a g e typically controls, which can be more susceptible to competitive pressures of new market entrants that constrict demand levels and evaporate financing options (Eggers, 2020, p. 200).
The theories of asymmetric information are well suited to analysing problems in the areas of assets, liabilities and dividends for small businesses. The way in which these problems are resolved has implications for reaching optimal financial decisions (Pettit & Singer, 1985, pg. 47). Past research on small businesses investigated the magnitude of economies of scale that exist in most industries. The general conclusion here is that when firm size implicates industrial concentration, there is a connection between size and profitability (Pettit & Singer, 1985, pg. 48). The standard corporate finance theory states that the management is viewed as one of the number of factors employed by the firm. This view is not the same for the complex relationships that are present in small businesses. Management in small firms are dominated by one individual, who is also a major investor (Pettit & Singer, 1985, pg. 50). These circumstances can influence the behavior of the manager, owner and the nature of the business. Small business managers are more willing to take risks than managers in large organizations considering their stake in the company. Small firms can compete effectively with larger ones because they are able to maintain more flexible operations and change operations rapidly in response to changes in technology or business conditions (Pettit & Singer, 1985, p. 51).
3.2.2 Alternate Sources of Finance Caglayan & Demir, (2014) stated that having access to better internal and/or external finance through debt and equity markets can allow a significant edge for private sector firms and small businesses. According to Keasey & McGuinness, (1990), small businesses raising finance from external sources is associated with higher returns, compared to raising internally. Small businesses encounter difficulty when entering a new market due to the high fixed costs along with outside investors’ unwillingness to invest in small companies. Keasey & McGuinness, (1990) stated that this also applies to debt financing institutions including banks that are unwilling to lend to small firms, therefore small businesses become more reliant on internal sources of finance. Internal financing is cheaper than attaining external sources considering the interest rates attached to obtaining external funds. There are a few arguments stating the reasons external finance yields higher returns. Keasey & McGuinness, (1990) noted that sufficient funds allow small businesses the option to cover fixed costs of the business. Keasey & McGuinness, (1990) also mentioned that external suppliers of funds only grant finance to those small businesses that they predict will be able to produce higher investment returns. Sources of funds include government loans which are not expected to produce a higher rate of return, mainly due to the objectives of the loan. Government debt providers are not as keen to look for ‘good projects’ rather more focused on employee and wealth creation (Keasey & McGuinness, 1990). Small businesses face higher transaction costs compared to larger businesses when trying to obtain credit. Poor management and accounting practices have hampered the ability of small
25 | P a g e businesses to raise capital. Information asymmetries associated with lending to small scale borrowers have restricted the flow of finance to small businesses. (Cook & Nixson 2000, p. 2).
Direct Costs and Indirect costs of Borrowing As managers have great ownership and stake in the firms, they have more flexibility in operations than large firms and the level of asymmetric information is greater in small business (Pettit & Singer, 1985, p. 55). Lenders will demand higher interest rates to compensate for the greater monitoring costs the lenders incur. Fixed costs are incurred in the development and creation of debt contracts depending on the size of the firm. For this reason smaller firms incur the burden of higher costs of debt contracts (Pettit & Singer, 1985, p. 55). Agency cost associated with debit financing is considered an indirect cost of borrowing. Smaller firms have a greater ability and incentive to expropriate wealth from lenders, their credit terms have more limitations (Pettit & Singer, 1985, p. 55)
3.2.3 Government Financial Aid Government aid has various outcomes however, there are a couple of areas which are focused upon. Government aid allows firms to have a higher level of technology. The downside being that funding these small businesses has a possibility to be inefficient (Maggioni et al., 1999). Government aid is also aimed at increasing entrepreneurial talent, encouraging people to become entrepreneurs, and increasing community employment and social benefits (Maggioni et al., 1999).
3.2.4 Financial sustainability Financial liquidity, customer responsiveness and supply chain stability are crucial factors when modeling future performance. These 3 key areas of focus, of the 7 defined by Craven et al. (2021), are highlighted within the scope of this study. Stabilizing financial liquidity is ideal for any business, though especially important for smaller businesses, and ever more so, to attain prior to a period of crisis (Boter & Lundström, 2020, p. 14; Thorgren & Williams, 2020). Under duress to pay expenses early on in the pandemic, Boter & Lundström (2020, p. 4) found that business leaders were naturally forced to dip into their savings. In conjunction with expenditure cuts, business leaders reduced their own pay, and even waived compensation entirely (Boter & Lundström, 2020, p.18). Despite constraints, businesses must try to stay responsive to the wants & needs of their customers. For many businesses, the issue of meeting customer demand did not even necessarily require any new product development but centered simply around delivery and fulfillment. This is not to imply that establishing the infrastructure to do so is an easy task, as the push towards an online experience of a similar or better quality can involve many complexities (Craven et al., 2020 p. 7).
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Although most of the pandemic's impact on businesses resulted from shocks of demand (Meyer et al., 2021), it was also critical for businesses to ensure consistent and predictable supply. Meyer et al., (2021) states that supply chain stability is fundamental to the downstream fulfillment of customer demand and ensuring timely earnings to maintain financial liquidity. Thus, the risk factors of suppliers, if triggered, could result in invalidating the modeling efforts by a company of their future cash flows, P&L (profit & loss) and overall balance sheet health.
3.2.5 Business risk Risk management practices are largely under-considered for small businesses in relation to the entrepreneurial risks that they assume to merely exist. The process of risk management is defined as the determination of a "maximum acceptable level of overall risk for engaging in business activities” (Mansor et al., 2016, p. 19). Due to their clearer cut organization structures, smaller businesses possess the capacity to make quicker, and potentially more drastic, decisions when adapting to changing market forces. However, this advantage, as noted by Kubíčková & Toulová (2013), is very much challenged by the fact that smaller businesses are more prone to competitive risk. Such pressures can existentially threaten their financial foundations, which are generally weaker with more limited access to additional resources.
3.2.6 Business failure Failure for a business is when it is "no longer able to operate as a sustainable entity and is thus forced to cease operations and lay off any employees,” as defined by Fleisher & Wright (2010, pg. 180). They describe further that the limited organization-specific experiential knowledge of smaller businesses places them at a particular disadvantage, and thus more likely to fail. According to Faccio & McConnell (2006), firms with political and corporate connections are prioritized for financial assistance and bailouts, as opposed to their counterparts with less network connections. Everett & Watson, (1998) stated that business failure is described as ‘discontinuance of business.’ The business is sold off with losses to prevent further losses, when the key business operator retires or when a business goes bankrupt. Everett & Watson (1998) discusses many other reasons for business failure as well however, the degree project will focus on these.
The two primary causes for small businesses to fail appear to be a lack of appropriate management skills and inadequate capital. For small firms, there is less opportunity to reduce unrewarded risk which leads to a higher probability of failure. (Everett & Watson, 1998, pg. 372). Small businesses are heavily dependent on a small pool of management expertise which contributes to a major factor of the success of the business. Watson & Everett, (1993) argued that low or reducing business turnover is a proxy for failure. Large number of small enterprises fail because of non-financial reasons. (Cook & Nixson 2000, pg 2).
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3.3 Marketing Strategy Developing effective strategy requires both formulated planning and adaptation in its implementation (Andersen, 2013). Although distinctive approaches of planned (Ansoff, 1991) vs. emergent (Mintzberg, 1990, 1991) strategy-making have been debated, strategic competence is improved by iterating upon plans and ability to execute, in alternation or in concert with one another, as proposed by Andersen (2013). The need for flexibility in this process becomes especially apparent as environmental variables change, from upon which previous plans were based.
Core factors for consideration in designing and implementing strategy for dynamic market conditions can be moderated within the 'first principles' framework of Palmatier & Sridhar (2017): 1) All customers differ → Therefore, a customer-centric approach and sufficient segmentation can help manage this fundamental challenge. 2) All customers change → A new product or service may need to be developed in anticipation of, or in reaction to, the shifting demand profile of one's customer base. 3) All competitors react → A sustainable competitive advantage must be an aspiration to be attained and leveraged in the manner most performant for the company. 4) All resources are limited → Trade-offs are required, which are dependent on economic considerations and a company's access to external financing.
Together, the above 'first principles' acknowledge and integrate the internal and external approaches to strategy, which have previously been presented more independently throughout the literature. While strategy has emerged from its historical origins for battle -- On War, skillful deployment of forces was defined by "relative" superiority in defeating an adversary of "absolute" superiority (von Clausewitz, 1832, p. 196) -- for marketing, it has evolved into a customer-centric focus, as chronicled by Palmatier & Sridhar (2017, p. 4). They note that this view stands in contrast with the traditional industry-level perspectives of economists and those more firm-centric of management researchers. The ladder is synonymous with the resource-based view, the research of which was catalyzed by Wernerfelt (1984), who centered the focus of strategic management internally, from within the firm outwards (Andersen, 2013, p. 14). This contrasted with the "outside-in" approach, driven by market competition, and most notably attributed to Porter (1980), as so widely recognized in literature (Andersen, 2013; Fisher et al., 2020; Valdani & Arbore, 2015). While such external competition paradigm, defines customer value as always "relative to rival offerings" (Fisher et al., 2020, p. 57); even preceding notions around strategy in "business policy", as proposed by Andrews (1971), view a company's resource position, with its strengths and weaknesses, as more than economic product-market tangibles -- such as, labor, capital and land (Wernerfelt, 1984, p. 171).
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Business policy, as defined by Andrews (1971), also demanded that managers uphold a sense of values and incorporate a level of social responsibility & self-regulation: “It is increasingly clear that government regulation is not a good substitute for knowledgeable self-restraint." Furthermore, this sense of purpose fortifies the company not only against "external attack" but also "internal erosion". Therefore, certain difficult-to-measure, internal resources are fundamental to one's competitive makeup (Wernerfelt, 1984). For applying this research-based view, from the broader level of management, specifically to marketing, work by Kozlenkova et al. (2014) have synthesized its many relevant uses within the intersection of marketing management.
Relationships, brand and knowledge have been found as the resources most valuable and unique to marketing (Kozlenkova et al., 2014). These inherently intangible resources can be optimized, individually and comprehensively, across the VRIO evaluation criteria, so familiarized with this internal view by Barney (1991, 1997). Unpacking the acronym, for evaluating the potential competitive advantage of resources, VRIO: Value, Rarity, Imitability and Organizability. While the original first three criteria are self-explanatory; the last criterion of organizability, or organizational embeddedness, was established later by Barney (1997) himself, in order to encompass the value of stakeholder relationships -- the theory of which, as with the broader resource-based view, arising from origins in management research (Donaldson & Preston, 1995; Freeman, 1984). To conclude the validation of focusing on these three key resources, as companies are forced to evolve from a market of hyper competition into one characterized by imagination, defining success will be the "weapons" (Valdani & Arbore, 2015, p. 557-558) of: trust & networking capability (relationships); creativity (brand); and sensing & integration (knowledge).
3.3.1 Stakeholder Relationships Stakeholder marketing has been a recently growing field of research, as noted by Kull et al. (2016), who further established the causal chain of a company's relationship network into competitive advantage and performance enhancement. This ideal state is thereby achieved through the optimization of such resources preemptively, to innovate in a manner that thwarts inevitable competitive reactions -- first principle #3 (Palmatier & Sridhar, 2017). Rather than needlessly addressing any circular confusion of how a relationship (Kozlenkova et al., 2014), as a stakeholder resource, is evaluated by organizational embeddedness (Barney, 1997); it is perhaps helpful to reiterate that the resource-based view is simply a modern analysis for maximizing and sustaining firm value (for resources), as Porter (1980) also intended his famous five forces to realize for products in the market. Regardless of the directionality, the 'inside-out' focal shift on resources (vs. 'outside-in' of products) had always seen resources and products as "two sides of the same coin" (Wernerfelt, 1984, p. 171).
The concept of a stakeholder can be distinguished between primary relationships -- customers, employees, suppliers, regulators and communities -- and those without
29 | P a g e obligation or legal authority that are secondary, such as trade associations or social media users (Eesley & Lenox, 2006; Hult et al., 2011).
3.3.2 Brand (Creativity, Authenticity and Equity) Branding is a complex force that is registered uniquely by every individual consumer, in both cognitive and affective ways. Explained further, recognition of a familiar brand can reduce rational, cognitive effort to drive habitual purchases or also engender meaningful affective connections to self-identity or status (Palmatier & Sridhar, 2017, p. 124). In classifying these consumer relationships with brands, research has established an anthropomorphized view across five dimensions of personality: Sincerity, Excitement, Competence, Sophistication, and Ruggedness (J. Aaker, 1997). Brand personality, therefore, distinguishes between: the purely utilitarian assessment by a customer in valuing a product and its features; with a higher-level perspective that embodies symbolism, self-expression and develops over time (J. Aaker, 1997, p. 347; Keller, 1993).
Brand - Creativity Creative was adapted, from early on in the pandemic, to better resonate with the consumer experience. Clever examples were noted by White et al. (2021, p. 1578), which incorporated certain mood-lifting qualities, such as optimism or levity, to address the confinement and stressfulness of social distancing. Enhancing the at-home experience was a common theme, exemplified by the Mexican juice company, Jumex, with their empty can 'bowling alley' post on Facebook. Across Facebook, such suggestions for different at-home activities were often found to be coupled with messages for health & wellbeing, in order to create positive brand associations (Antúnez et al., 2021).
Brand - Opportunity for Authenticity Authenticity is a critical element of advertising through times of crisis. As Jenyns (2021) notes, for nearly 20 years, researchers of brand management have recognized the competitive advantage of brands that can authentically, and thereby more deeply, connect with their customers during difficulty. Such trust-building may then lead into a more meaningful and long-lasting relationship, which hopefully translates measurably into lifetime value (LTV) (Rust et al., 2000). The bond between authenticity & trust is therefore especially pivotal in driving purchases in the face of economic uncertainty (Jenyns, 2021, p.38-39).
Brand - Equity Brand equity is a clear example of a resource not to be exploited, as that would not only be quickly counter-productive but ultimately self-sabotaging (D. Aaker, 1984, 1991). From a company's perspective, the goal should be to continuously increase the value of
30 | P a g e one's brand, or its endowment of any strategic resource for that matter, as strategized by Valdani & Arbore (2015). Furthermore, the authors built upon the premise that internal resources and capabilities can serve as a stable base, particularly in turbulent market environments, for defining a company's brand identity (Grant, 2010). Reflective of a company's brand are its products, which themselves are considered as expressions of internal resources (Valdani & Arbore, 2015, p. 556).
3.3.3 Knowledge / Capabilities Knowledge is intuitively considered a tacit resource, which specifically for marketing could include the selection of creative, which is appropriate for the 'essence' of a brand, and sales relationship-building, as noted by Morgan (2011, p. 104). Distinguishing further, the author categories four types of firm capabilities: specialized, cross- functional, architectural, and dynamic capabilities (p. 106). For clarity, our study ignores architectural capabilities and simplifies its focus on the others.
Specialized capabilities of focus are pricing management (p. 106) and, perhaps more importantly, channel management (p. 107). As ostensibly straightforward the concept of pricing appears, cost must effectively consider customer value with its relationship to perceived quality (Dutta et al., 2003). For channel management, D2C (direct-to- consumer) companies have generally worked with channel partners to add value to functions such as, order processing, shipping and other value-added services (Morgan, 2011, p. 107).
Cross-functional capabilities, most importantly, concern the management of brand and customer relationships (CRM), in addition to the development of new products (NPD) (p. 107). One limitation that Morgan highlights of his own work on this knowledge- driven marketing performance is in ignoring supply chain management, although lead- times and scheduling are acknowledged as important components in realizing "brand- level business plans" (D. Aaker, 2008).
Dynamic capabilities have been recognized as capability enhancement and resource reconfiguration (Argyres, 1996). To adapt to a changing environment, especially under financial constraints, a company could enhance its capabilities through a observational process of "learning by imitation" (Morgan, 2011, p. 109), which is an inevitable competitive reaction that can also go both ways (Valdani & Arbore, 2015, p. 557). Also by reconfiguring their own resources, it is possible to amplify this effect by collecting its resources with a partner firm, either via acquisition or merger (Capron & Hulland, 1999).
3.3.4 Marketing Management Links in the marketing-finance interface, previously considered within a "black box", have recently been more empirically established in the literature (Morgan, 2011, p.
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102). However, there is still difficulty in demonstrating the value of marketing, which lies in the loose performance correlation between attitudinal, behavioral and financial metrics (Hanssens & Pauwels, 2016). Further complicating the assessment at the firm- level is the complementary nature of intangible resources, which have been found to constitute up to 70% of a company's market value (Capraro & Srivastava, 1997). As such measures are intrinsically based on publicly traded companies; valuations of privately owned, smaller businesses may be over-represented by a limited pool of those previously acquired or dependent on private-market valuations. Regardless, the business performance of marketing is becoming more measurably linked to financial indicators that better reflect the equity of intangible resources, such as brand reputation and satisfaction levels of customer relationships (Morgan, 2011, p. 114).
New Product or Service Development Although the introduction of a new product or service may give a company a competitive edge or help it to sustain customer interest, smaller businesses are more limited in their access to capital resources. Not only higher then is absorbing the risk of tying up such resources, or worse, exhausting precious capital on a new development initiative but compounded if the constraints also limit the business's understanding of their customers' desires. Such a deficiency, as highlighted by Kubíčková & Toulová (2013), is the main reason for failure in new product development. To compensate, a company might naturally look towards its nearest competitors; but indeed rather could take a more expansive approach by centering the customers' basic needs as the focal point for new offering ideas (Andersen, 2013, p. 44).
Marketing through the resource-based view has focused on the domains of strategy, innovation and internationalization (Kozlenkova et al. 2014, p. 2); the ladder, for the context of this study, at least from the side of demand, is excluded. When considering a company's underlying resources, against the inextricable competitive forces of alternative offerings in the marketplace, the firm must then strategize, innovate and execute in the manner most optimal for their customers in mind (Palmatier & Sridhar, 2017).
3.3.5 Customer-centric Marketing The internet has indisputably revolutionized consumers' relationship to marketplaces and the abundance of information about available products & services. Solomon et al (2016, p. 17) help put this accelerated pace of change into perspective: "It took radio 38 years to reach 50 million listeners. TV took 13 years to reach 50 million users. The internet took four years to reach 50 million people. In less than nine months, Facebook added 100 million users." If 'everyone' is on the internet and a motivation of changing customer demand is convenience, a hallmark of the once video rental-by-mail startup Netflix, then shifting the dialogue and purchasing interactions online is essential, if preferred by customers (Palmatier & Sridhar, 2017, p. 14).
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The value of a customer-centric approach to communication is evident, particularly in aligning digital marketing with firm effectiveness (Boudreau & Watson, 2006). Despite the current ubiquity of digital media, research has warned of negative long-term effects, detracting from its benefits to firms, relative to traditional media (Chatterjee, 2008). Such deleterious effects, as observed in the digital sphere, are exacerbated by the traditional push model of information, which is characterized by a one-to-many, inflexibly scripted and essentially 'no-reply' form of message delivery (Rowley, 2004).
3.3.6 Paid Marketing Paid media is defined as any promotional space that requires an external expense, for which the company either pays for directly or via a third party, such as an agency (Edelman & Salsberg, 2010, pg. 2). Sophisticated advertisers have recognized the need to serve a market characterized by increasingly more complex demand. Paying tribute to a paper written by the late American publishing executive Bill Ziff Jr., entitled "Crises of Confidence" (1992), Jenyns (2021, p. 37-38) provides a fresh update on the state of advertising, in light of COVID-19's economic impact. Although Ziff's reflections emerged during the recovery of the early 1990s recession, and thus three decades old, many concepts presciently still ring true. He explains the stark contrast between the power of advertising after the postwar era, to mass-override consumers' "considered appraisal" of essentially undifferentiated products, and the need to calibrate to the present (1992, RC-3). Even back then, Ziff described the market as hyper-differentiated, with products matching finely segmented customers, who were further shaping & tuning their products via rapid feedback loops.
Advertising with empty brand rhetoric (1992, RC-3) and generic imagery (RC-4) was, therefore, unsurprisingly admonished. Further lamented was the paradox of advertisers knowing less about 'their' products than the very consumers to whom they targeted. This scenario, of course, implies a more complex purchase, but one for which better advice could benefit even knowledgeable consumers, which is ever more applicable to the current internet age (Solomon et al., 2016, p. 16).
Behavioral targeting is one way that the internet has facilitated the targeting of specific users, by precisely narrowing the criteria and display of an advertisement, based on their personalized browsing history (Solomon et al., 2019, p. 385). Specifying further, platforms such as Facebook have popularized this approach so that virtually any company can dynamically retarget users with ads showcasing images, for instance, of the very products viewed on their website, of the most probable interest and, thus, with most likely to engage (Lambrecht & Tucker, 2013). Targeting behaviorally, therefore, can serve small businesses with limited budgets to slice through the overwhelming amount of advertising clutter and perceptual thresholds of consumers (Solomon et al., 2019, p. 255); in other words, effectively getting their attention in a busy world.
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Budget Cuts Advertising spend is a 'canary in the shaft' during recessions, by signaling further impacts to a company's budget, as observed by Jenyns (2021, p. 36). However attractive expenditure cuts may be during economic contractions, increased spending can result in gaining additional market share, as shown after the Great Depression (Vaile, 1927) and in more recent times (Biel & King, 2003). Discretion to spend could, of course, be more easily determined by category in an expected 'rising tide' scenario, namely from homebound consumption (as mentioned earlier in the section of Categorical Growth). Just as recessionary conditions can spark a reevaluation of budget, times of difficulty and change may inspire new ways of advertising and marketing strategy (Morgan, 2011).
3.3.7 Organic Marketing Organic marketing, for purposes of clarity, includes all opportunities across owned and earned media. Owned media is defined here as assets that are distributed, directly by a company or their agency, free of charge. Although our definition was informed by the work of Pauwels et al. (2016, p. 740), it seems to clarify theirs, which introduces owned media to include assets "owned by a company". A company can post freely from 'their' Facebook account or their website may appear organically on Google's SERP (Search Engine Results Page). Although the property of ownership may appear clearer in the case of Facebook; a company is not required, nor able, to pay Google to rank higher but could attempt to appear more relevant and important to its algorithm through SEO (search engine optimization). This direct contrast to paid media, as previously mentioned, is what defines an owned channel.
Earned media is defined as "arising from consumers" (Pauwels et al., 2016, p. 740). In the context of social media, this includes writing a text-based review about a company, or a specific product / service, or uploading a picture taken during a direct experience or otherwise. While this definition focuses on a media asset's creation by the consumer, for clarity, we include the concept of simply sharing a post that the company itself may have generated, originally in the form of owned media or paid.
Customer Loyalty and Community As consumer perceptions of companies & brands is an input that is used, for determining how attractive they are as a segment to target, by competitors; accumulated customer loyalty hardens their price sensitivity profile, which therefore acts as a deterrent to encroaching competition (Palmatier & Sridhar, 2017, p. 55).
A natural result of loyalty and expanding community is the force of word-of-mouth in influencing consumer choice. As referenced by Solomon et al. (2016, p. 707-708), one study (Eckert & McConnell-Ginet, 1992) found more than two-thirds of the interviewees, at least once in the past year, asked for a personal reference in selecting a 34 | P a g e restaurant, for example. In addition, while brand awareness may derive more from impersonal sources; in the later-stage evaluation of a purchase decision, word-of-mouth is still relied upon more heavily (Eckert, 2002). Online, however, word-of-mouth takes upon additional considerations, namely the authenticity of the referral; although the suspicion around whether an internet review is incentivized through paid sponsorship, for instance, could be considered as an intrinsically impersonal source (Eelen et al., 2017).
The potential value of building community around a brand, is acknowledged in research by Palmer et al. (2014), particularly by leveraging social media and user-generated content. Furthermore, the potential for brand community has been found to be applicable from high-end products, such as Ducati motorcycles (Sawhney et al., 2005), down to those cheaper in price and of convenience, such as Nutella (Cova & Pace, 2006). While online ratings in general have been found to be highly trusted, just behind recommendations from friends & family, the strength of community ties should also lend varying degrees of trustworthiness (Strebel et al. 2004). Social object theory suggests that social networks and human relationships are strengthened through the sharing of things with the community of common value, which give it additional meaning or purpose (Solomon et al., 2016, p. 731).
In-store Decision-making Consumer behavior literature covers many heuristics and biases in decision-making, by drawing liberally from behavioral economics (Solomon et al., 2016, p. 612-627). It is worth noting that heuristics, or mental shortcuts, have been found to be used more in buying situations to save time, even more so than for money (Saini & Monga, 2008). From the proverbial 'time is money' perspective, such behavior can reflect a cognitive rationale; which research recognizes as bounded rationality, in the justification of the 'good enough', or 'satisficing' behavior (Solomon et al., 2016, p. 626). Further relevant to the confined in-store context is anchoring, which Tversky & Kahneman (1974) explain as: ‘the tendency to rely heavily, or anchor, on one piece of information in order to arrive at a decision’. This is not to ignore the mobile-facilitated phenomenon of showrooming, wherein a shopper gathers information in-store, only to find the item online, perhaps elsewhere at a cheaper price (Solomon et al., 2016, p. 141). Socially, the influence of group shopping has been shown to lead to covering more of a store's floorspace and making unplanned purchases otherwise avoided, which ultimately result in higher sales for the store (White & Dahl, 2007). As evidenced, purchasing decisions are not made in a vacuum.
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3.4. Conceptual framework
Figure 3. The Financial Organizability of Marketing Resources
Based upon the foundation of established theory, this study ultimately grouped the findings into categories of the most valuable marketing resources to a firm: Stakeholder relationships, Brand and Organizational Knowledge / Capabilities (Kozlenkova et al., 2014). Explaining the finance-marketing interface in reverse (from the bottom right backwards), it was concluded that this resource-based view, however, needed to incorporate a customer-centric approach (Palmatier & Sridhar, 2017) as a filter for the decision-making to optimize such resources. The reasoning is that no decision -- whether made in a vacuum based on the maximal theoretical output from internal resources; or, for example, blindly following external competitors -- is validated without the final judgement of the customer in question.
Strategically, companies assumed certain positions of customer growth or retention and, operationally, adjusted output levels accordingly. This includes the balance between paid and organic marketing, the latter of which should be a given in any circumstance. The pandemic quickly intensified, from an exogenous factor of consideration, to fundamentally alter the core of a company's marketing strategy, which is itself largely a manifestation of the firm's financial makeup. While virtually no company could have proactively and specifically prepared for the novel coronavirus scenario, certain companies were found to be more financially responsive and forward-thinking.
Underlying this conceptual framework is the cataclysm of COVID-19 and its various external factors imposed, both directly and indirectly, on small businesses in
36 | P a g e communities worldwide. How companies had to adapt is viewed independently through the lenses of financial and marketing strategy. Companies adjusted to the new norms, while continuing business operations to remain financially sustainable or, at least, afloat. Small businesses promoted their businesses, in hopes to leverage any competitive advantages that were established pre-pandemic. The study examines the cost-effective marketing approaches and techniques, in order to retain existing customers, while attracting new ones.
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4. Empirical Findings
4.1 Profile of the Interviewees & Companies
4.1.1 BLANK the Hub The interviewee was the store owner and acting manager of a fashion retail "lifestyle concept". The store newly opened during the pandemic, and while it had only existed since late February 2021 the owner was a serial entrepreneur with almost 30 years of experience in the retail business. The owner previously had another retail store called Tiger of Sweden, which she sold just prior to the pandemic. The purpose of choosing this particular small business was the interest of interviewing a company which began during the pandemic. Despite the risk, she took the decision to begin the store in August of 2020. For this retail store, she is selling brands from other companies, which include fashion, interior design and skin care etc. The owner creates events through collaborations with partners. There are currently 2 acting employees working in the store, herself and her business partner. She has a separate person who operates the e- shop, which will be discussed later in the chapter.
4.1.2 Burmans Musik The interviewee was the current owner and sole operator of a music record store. While the store also sold CDs and tapes of all genres of music, it specialized in the format of vinyl records, many of which could inherently be typified as old-time or classic in nature with genres ranging from rock, jazz, soul, country blues and pop. The store is an independent business, unaffiliated with any other branches in the country, and of historical & cultural significance. The business, operating since 1910, is the 2nd oldest record store in Europe and has experienced a few 'internal' transfers of ownership. Although not a family business, the current owner had worked for the previous owner, who had worked 12 years for the owner before him. The interviewee was naturally passionate about the business, as he had an "interest in music since (he) was born," which has consumed "all (his) life"
4.1.3 Handelsgården The interviewee was one of the co-owners and managers of a gift shop focusing on artisanal goods. She had been involved with the business for around 12 years, initially contributing personal postcards and later with other handicrafts. While the store mostly sells items made by the collective's owners themselves, it also carries other locally produced items. Overall, the business "has existed for about 35 years". The handicraft items include textiles, ceramics, wool, glass, leather, metal and wood. The co-owners take turns handling the sales. The reason for this being is so that the co-owners get the
38 | P a g e opportunity to meet the customers in person. The store was built on the concept of sustainability and in 2016, they received the ‘Sustainable Store of the Year’ award. The store also has the option for other hand-craft enthusiasts to become a co-owner and sell their own items based on its quality, originality, etc.
4.1.4 Ankis Tyg & Sy The interviewee was the longtime owner and the manager of a fabrics store, which has been in business for the past 20+ years. The focus of the store is on home interior decor and provides certain sewing services.
4.1.5 Company XYZ The interviewee was one of the managers of an online clothing company. Due to privacy concerns, he was not comfortable disclosing the name of the company. While the company is based in Gothenburg and has been in business for 3-4 years, it does not operate a physical store. It instead sells its garments, most of which are imported from overseas, through various e-shops including Zalando, Amazon and CareOfCarl. The company currently consists of 19 employees. The interviewee of the company is a male and has been working in the store for 2 and a half years.
4.1.6 Musikanten i Umeå AB The interviewee was the manager of the retail musical instruments store. While the store is one branch of a few others in Northern Sweden, all are internally owned under the main business, which started in 1974. The items sold range from musical instruments, such as pianos and guitars, to general audio equipment, some of which also have the availability to rent. The store also has its own repair shop specifically to service music instruments, electronics, and amplifiers. Prior to the pandemic, the store operated its own music school for beginners and had a separate premise in the store for bands who like to practice. The manager of the store is a male and oversees all aspects of the local branch, in addition to coordinating with headquarters.
4.1.7 Nollnitti The interviewee was the owner and active manager of a retail men's clothing store, which is independent and has been in operations for the past 20+ years (since 1999). The owner was a male in his late 40s. The store has 2 outlets with one located in Umea’s city center and another located in Avion Shopping center. The store sells men’s fashion and accessories.
4.1.8 Hi-Fi Klubben Umea The interviewee is the branch manager of a higher-end electronics & home entertainment store. The manager was a male in his early-to-late 40s and had been 39 | P a g e working in the store for the past 3 years. Items sold are audio and video products including TVs and home stereo equipment, as well as personal electronics, such as headphones. The business is headquartered in Denmark, founded in 1980, and all of its branches are internally owned.
4.1.9. Zaion Afrikansk Restaurang The interviewee was the owner and manager of an African restaurant, which is the only one of its kind in town. The restaurant specializes primarily in Eritrean & Ethiopian cuisines. The restaurant was first opened in a smaller location in November of 2018 and expanded into its current location one year later.
4.1.10. Hairdresser The interviewee was a hairdresser working in a collective salon. Although they opted to remain anonymous they were willing to share about their work and any other non- identifying details. They were relatively younger, in this case meaning having less than 15 years of professional experience.
4.2 Perception of the Business before COVID-19 Implications Perceptions of general business performance pre-COVID were all positive, with 2 exceptions. One exception was the lifestyle fashion store (BLANK the Hub), which opened during the pandemic and, thus, the consideration not applicable; and second, the record store (Burmans Musik), which struggled against the secular decline in their product category overall.
For the record store (Burmans Musik), the secular trend was that "everything has become more digital," with streaming services like Spotify "is killing everything". This shift had brought great difficulty for the record business. The owner hadn't had any staff assistance "in the last five years or so". And although the business was actively communicating with customers through Facebook, when asked about paid advertising efforts, he responded "No. So many years I don't have money to do that." All around, the owner lamented, "It's been hard for me for many years."
In contrast, all the other 8 businesses responded positively about their performance pre- COVID, comprising the majority of those interviewed. "We were doing quite good" was the response of the artisanal gift shop (Handelsgården). The shop was among the other 6 businesses that were 'established', having been in operations for 20+ years.
Although the African restaurant (Zaion) and the lifestyle fashion retailer (BLANK the Hub) were 'newly established', less than 5 years since opening, their owners were
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'experienced,' each respectively accumulating 20+ years in their trade. As an early performance indicator, the restaurant had originally opened (in late 2018) in a smaller location, then decided to expand a year later into its current and larger space. "We had a much smaller space before. That one was by the train station, so we had some travelers coming in. That was good. But, that spot just had too few tables." In comparison, the lifestyle retailer was unique among the interviewees, as it was the only business that actually opened during the pandemic. The owner decided to start the business in July 2020 (later opening in February 2021) and, naturally, felt optimistic at the time. She thought, "it's good to start because when this problem in the world is over and we want to live again..." The owner then further explained the value that she would be offering by emphasizing that "we have to live… shopping and have fun… and have something good to look forward to".
Pre-COVID, businesses sustained operations without concern for the systemic risk that the pandemic would reveal. "Nobody could (have) ever imagined…," as expressed by Musikanted regarding the profound change. The change was so sudden, however, that the impending impact was initially difficult to imagine, according to the manager of the online clothing company (Company XYZ) noting that “the owners and management were not too worried as it was not seen as a global outbreak yet. We assumed it would remain in China and maybe Asia but did not think it would penetrate in Europe.” Even among the other interviewees who were more initially concerned, while they suspected the emerging pandemic was going to be a problem, they could not fathom the scale of the impact. The common notion here was that despite the extreme level of uncertainty that ensued, the pandemic's unforeseeable arrival was not one for which businesses could have been made aware beforehand or completely prepared.
4.3 General COVID-19 Impact on Business Operations The impact of COVID-19 was negative on the whole for 7 of the businesses interviewed, with a minority reporting to be either neutrally (n = 2) or positively (n = 1) affected. Respectively, the minority group of 3 represented those that were either not adversely impacted or, in fact, actually benefited financially during this period.
The 3 neutrally and positively affected businesses expressed commonality in that they mainly sold products to be consumed in the home. This most obviously applied to retail consumers, of whom were most important in terms of revenue for the businesses during the inquired period. Specifically, the product categories of the businesses fell within music -- which could be further separated into musical instruments (Musikanten) and audio entertainment (Hi-Fi Klubben) -- and home decor (Ankis Tyg & Sy). The latter two businesses were those that reported neutral effects, which will be discussed below.
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4.3.1 Neutral Impact (n = 2) The businesses that reported neutral effects were able to perform relatively well during this time (compared to their pre-COVID-19 baselines) and were respectively selling audio entertainment and home decor but both to homebound consumers that sometimes demanded more extended consultation pre/post-sales. In addition to providing standard sales assistance to guide a customer's decision-making process, the businesses also offered at-home services for customers. The home decor business (Ankis Tyg & Sy) stated that they were operating “business almost as usual" but making more "home visits", as people were "afraid to come and shop physically". Similarly, the audio entertainment shop (Hi-Fi Klubben) also stated that they “provide home deliveries and set-ups". It wasn't merely the fact of being invited into the homes to deliver or install goods that drove sales, as the sales processes differed between business types.
So, although both businesses ultimately reported neutral impact, they employed different means of generating the sales necessary to maintain or restore performance, namely the influence of inside sales, over the phone, and online ordering. The home decor business (Ankis Tyg & Sy) stated that their customers were not interested in finalizing their purchases over the phone or online and that it was not possible for them to consult with people over video chat, for example, because of the need to "really see the fabrics up close in-person". In contrast, for the audio entertainment shop (Hi-Fi Klubben), inbound phone inquiries and consultations increased considerably. The manager noted that "the biggest change is that the phone rings a lot more". Furthermore, the average order value of customers that did come into the store had increased to stabilize revenue: "We have a lot less customers in the store, but the customer who is here, they buy more stuff when they are in. So we just sell the same, as before, but on less customers."
4.3.2 Positive Impact (n = 1) The musical instruments store (Musikanten) was the only business that, overall, significantly improved during the pandemic. They recognized that demand, from homebound consumers, had fundamentally shifted in favor of their product category: "Because musical instruments, playing instruments, it's a very small business worldwide. So we have very few customers. Nowadays, we have new business, new faces, new people coming in, 'What am I going to do? I have to do something.' 'Well, yeah please, try guitar.'"
4.3.3 Negative Impact (n = 7) The impact of the pandemic was reported negatively for the majority of the businesses interviewed, which included 7 out of the 10 interviewed. Even for the one online retailer interviewed (Company XYZ), reduced demand had rippling consequences throughout the business: “COVID-19 has affected our business negatively mainly due to slow
42 | P a g e demand [...], clients have stopped placing new orders and investors ‘lost’ hope to invest. Production has significantly slowed down.” While the shock to their business, as previously mentioned, was not realized right away; it was indeed for the other businesses reliant on in-store traffic, such as the gift shop (Handelsgården), which stated, "We noticed the difference. Immediately, I must say, and it has been bad since".
The dependence on urban footfall for the brick-and-mortar businesses and the quieter state of the city and its stores were recurrent themes. This was emphasized by the main street record store (Burmans Musik): "There's hardly any people in the city. They are closed down there (x3) [while gesturing]. They are closing down everywhere. So, the city is almost dead." The difficulty was echoed, albeit to a lesser degree, by the men's fashion retailer (Nollnitti), which even recently moved (in November 2020) to a more prominent downtown location, on the corner of a central shopping intersection. Despite the higher traffic storefront, with the coinciding rise of local infections: "It has been quite a struggle since November, until now". Therefore, when reviewing revenue for the past year, he disclosed that: "Some months have been okay, but most were quite a great loss."
The interview responses suggested that there was also a supply-side impact, which in turn shaped consumer demand. In describing the supply of new music, the record store said that: "People are sitting home now listening to old records. I mean, there has almost not been that much new releases because they can't promote it. So it has stopped people from listening to new music".
4.4 Business Response
4.4.1 Digitalization & E-commerce All the companies interviewed had some level of established web presence, with the common denominator being on Facebook & Instagram. Furthermore, 7 of the businesses were enabled with e-commerce, which generously includes online booking for 3 of the businesses: the hairdresser, restaurant and lifestyle fashion retailer. Such booking functionality was provided through 3rd-party services; respectively, TheFork (a TripAdvisor® Company) for the restaurant and Bokadirekt (popular in Sweden) for the lifestyle fashion retailer. The ladder of which, had a website with commerce functionality in development.
The success of online sales was found to be more correlated with product demand, rather than the mere existence of an e-commerce store, built and operational beforehand. The gift shop, for example, explained: "We have a small webshop. But, we don't sell very much that way." And given that in-store activity had quieted, when asked if there was an increase or shift online, the response was "maybe a little more". This was in contrast, however, with the musical instrument store, which stated that "the e-shop, the
43 | P a g e web-based. That has increased with life. It has doubled. Sales in the store is almost the same."
The pandemic pushed some companies (Zaion; BLANK the hub; Hi-Fi Klubben) to accelerate their digital fulfillment plans. The first, as mentioned, was the restaurant in their full adoption of food delivery tech. More directly was the lifestyle fashion retailer, whose owner decided to pull in her web development schedule by a half-year: "because of that I do it now. Otherwise, I would have done it in autumn. So, I could focus and build this (the store) up. But now, I feel that I have to do it. Because we don't know how long time this is taking in the world. So I think it's good to have that (webshop)." Finalizing the fulfillment process, the electronics store added their own internal delivery service to existing 3rd-party services, which they still employed for oversized items, such as certain TVs. Although, the pandemic was not entirely acknowledged as the catalyst, its influence was implied: "It's on your way, but I have implemented it anyways, even if it's not the pandemic. I have it on my bucket list. So either way I should have done it."
Virtually synonymous with e-commerce is the delivery & fulfillment of those products ordered. Besides the lifestyle fashion retailer, whose webshop is still in development and desired focus is on orders for pickup, all 6 the other e-commerce enabled companies provided options for delivery. Among these, to note, were two that relied on 3rd-party ordering channels: 1) The online clothing company also had a D2C (Direct-to- Consumer) channel but was heavily dependent on 3rd-party channels such as -- Zalando (German multinational eCommerce site), Amazon and CareOfCarl (Swedish premium store for branded menswear); 2) The restaurant, which exclusively depended upon food delivery apps, mainly Foodora (Swedish, owned by Delivery Hero) and, to a lesser extent, Wolt (Finnish). Although the restaurant was not in any position to develop their own delivery service as a replacement, he voiced concern over the ethics and practicality of continuing to use those 3rd-party services: "I am thinking about cutting those delivery companies. Their guys come to me and tell me how hard it is for them to actually make any money working for them." During an informal conversation with one anonymous food courier, the reported hourly rate of pay maxed out around 200 kr, with an electric bike or scooter. Considering that those workers are essentially low-wage, on- demand employees, with little to no formal benefits, while the food tech companies take a 30% commission on order sales, the restaurant questioned the benefit to his business and customers.
The difficulty of the pandemic made companies reevaluate their online strategy, perhaps also in moral quandary. When assessing the importance of e-commerce, the owner of the lifestyle fashion retailer emphasized her focus on sustainability: "I want to have it... But, I don't want to send it. I want people to just come and pick it up." Her environmental regard was why, previously, she conscientiously forewent the possibility of addressing a wider market, throughout Sweden or Europe: "That's why I didn't want to have the e-shop on the other store that I have run because I think it's not good for the 44 | P a g e environment to send things and then send it back." Thus, the apprehension against e- commerce stemmed from the negative environmental impact of shipping, plus the back & forth of returns.
4.4.2 Supply Chain Repercussions Supply chain disruption, which inevitably affects demand fulfillment downstream, was a challenge for half of the businesses interviewed. This definition included the 2 businesses that responded with curtailed purchasing, due to slower demand and financial concerns, internally. This was reflected, to a lesser extent, by the gift shop, which simply scaled back further from a previously conservative sales throughput rate: "well, we don't buy things in big quantities. When you have to buy something, we buy small amounts. Well try to not have so much expenses..." For the menswear store, this equated to reduced order quantities to their suppliers and increased discounts, in order to refresh inventory: "So that means we have to moderate, when we buy clothes (forecasting inventory / demand). We have to work more with the goods we have in the shop. And it's a lot bigger [pointing], more on sale than it used to be."
Delays of certain products required businesses to forecast more aggressively and accumulate inventory, or simply have to wait longer than usual. The lifestyle fashion retailer noted the difficulty of dealing with multinational supply chains: "The problem is not every delivery comes forward to me, because you know, it's coming in more late. Because, we take (for) example, for everything who is ceramic and so on, they produce it in Portugal. And everything has been closed down. So it's… [loss for words]" The musical instruments company echoed this challenge by emphasizing that "now, the hardest thing is to get stuff, to get products. Because it's a lack of products. As you have all heard, it's the same for us. So for us, Yamaha is the biggest..., Fender, and so on. They have not anything to deliver." In adjusting for the supply volatility, the manager disclosed that they were renting an extra storage facility for the inventory buildup: "We have to have more space for storing instruments, because if you want to buy this one [pointing] in white, normally we get this next week. Now it's like, well maybe it's July. So, we have to forecast everything. So, we haven't sold them, but we have to order them." Therefore, despite performing well, the business was faced with the decision to assume additional liquidity risk from stocking up inventory: "Otherwise, we will not have anything to sell."
Sourcing products was a challenge for those that were much better evaluated up close or in developing new supplier relationships. This was particularly acute for the newly opened lifestyle fashion retailer: "now the problem is that we can't go and shop... Otherwise, we go to big cities and shop, meeting every brands, and we can take in everything..." The workarounds, unsurprisingly, were remote-oriented -- video meetings (on Teams, Zoom, etc.); and basing purchasing decisions off of product images, then checking quality upon arrival: "we have to do everything on the screen. And it's not the same. And so that's very hard because both me and [employee] we love to feel, to see it
45 | P a g e in reality". There was no presently viable alternative to the process and the owner conceded that "it's not so good for the customer. Because we don't know what we get."
4.5 Financial adaptation
4.5.1 Financial Outcome Company XYZ had 30 employees when it began, “initially when starting the business 3-4 years ago, we had lots of employees.” As sales began to slow down, Company XYZ “laid-off 50% employees and lacked new investors.” It was interesting to point out that this was not the case for a few physical retail stores. The owners were managing the store and handling in-store activity, alongside maintaining business operations. “I worked earlier from the previous owner, who worked 12 years before the previous owner and so it sort of like a family business. Yes, currently I am the owner and have been working here for 40 years now.” stated by the interviewee of Burman Musik. He stated that as he was the owner, he has been working in the store 7 days a week without pay due to the revenue shortfall in order to keep the business alive. “It’s been half a year like this. Seven days a week, no pay.” The interviewee at Handelsgarden stated that they do not maintain any employees as “it’s just we, ourselves that work in the shop.” Their owners rotate each day of the week and manage the store. Financially, the co-owner at Handelsgarden was performing well before the pandemic. Burmans Musik AB have had rough years financially for more than 3 years even before the pandemic and they were under the process of liquidation. The owner’s plan is to “liquidate everything and start over.” There was also a liquidity shortfall for both the African restaurant, Zaion, and the hairdresser due to the lower customer turnout after the pandemic struck. The owner at Zaion was forced to lay-off employees stating, “it was not possible to sustain operations with the current economic situation.”
Retailers (Ankis Tyg & Sy, Musikanten, HiFi Klubben) with additional employees who had a positive or neutral impact from the crisis with their slogan of ‘business as usual,’ did not have any layoffs. The interviewee at Ankis Tyg & Sy stated “We did not have any layoffs and it's been almost business as usual for us.” HiFi Klubben did reduce the office hours for a certain period of time. It was due to restrictions to keep the office hours shorter and reduce the spread, “[...] because we have taken down opening hours.”
4.5.2 Government Support and Aid Ineligibility Financial support from government institutions almost varied depending on the type of business. Financial support was given to HiFi Klubben. “Government financial support...helped us out.” The manager at Company XYZ stated that the company required a certain yearly turnover in order to get a sufficient amount of government support. Companies which began 3-4 years ago do not qualify for any financial aid. Longevity of the business also plays a factor for government support, “companies
46 | P a g e making consistent yearly turnover for a long period...they are first to receive government help, but not us.” Burmans Musik AB had the similar issue stating, “you need money to apply for more money.” Not being able to generate turnover can reduce the chances for any government aid. The manager at Nillnitti noted, “Yeah we have had a bit of support [...] government support was 20% of what we lost due to the pandemic.” He also noted that the support is designed for larger companies and industries, but not for smaller businesses. An interesting point here was that large businesses receive more support given the “large industry standard and employees.” The owner at Handelsgarden noted that one of the owners attempted to apply for government support but she isn’t sure whether it went through. Considering the consistent performance during the pandemic, Ankis Tyg & Sy, Musikanten and Hi-Fi Klubben did not require external financial support from government institutions.
Small businesses which started during the crisis had no way of considering government support. Internal financing was the only option. This scenario can be seen at BLANK - The Hub as the owner “put in (herself).” She did not require external finances and this time she “did not take any loans.” One interesting observation she also mentioned was that bank loans for retail outlets have discontinued and “they don’t give loans to shops any longer.” One of the reasons for this being the case was the risk factors associated. “I have been in business for 30 years, but the banks still believe it's risky.” The owner at Handelsgarden had a different view of aid with “impossible conditions to take loans'' with the pandemic situation. The observation for most businesses was that businesses feared paying back the loan with the bigger question they ask themselves is “finding how to pay it back.” It was also interesting to note that Zaion, the African restaurant, attempted to obtain government aid but was denied and instead was struck with a tax bill from the government, further exacerbating its liquidity position. The interviewee is in the process of obtaining personal loans with no updates on it yet.
4.5.3 Alternate Sources of Finance The Hub as the owner “put in (herself).” She did not require external finances and this time she “did not take any loans.” Other businesses found a way of retaining all their previous profits. Company XYZ, having a large number of employees, were forced to take a loan as “it was necessary.” Burmans Musik AB have had rough years financially for more than 3 years even before the pandemic and they were under the process of liquidation. The owner’s plan is to “liquidate everything and start over.” BLANK the Hub was offered financial support from family members as well. That being said, she also noted that “asking friends takes longer than if you do it by yourself.” The owner does have friends working in other retail stores in the nearby city area and (their) situation is also “affected from the pandemic.” It was a common observation here as well, since the pandemic situation affected almost all businesses alike regardless of industry, and did not target a specific area, internal networks found themselves in similar situations. It came to a point that these networks were not strong enough to support each other any more.
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It was a common observation here as well, since the pandemic situation affected almost all businesses alike regardless of industry, and did not target a specific area, internal networks found themselves in similar situations. It came to a point that these networks were not strong enough to support each other anymore. The manager at Nollnitti has been in his retail business for 20 years, was able to save up throughout those years and maintain some ‘equity.’ For this it has not forced them to apply for any additional external finances. Although due to the pandemic, that ‘equity’ has reduced and they ‘have less now.’
4.5.4 Indirect Aid Internal networks among businesses were somewhat beneficial for Handelsgarden as they were offered a reduction of rent in the spring of 2020 but that was only for 3 months. The manager at Company XYZ was very blunt about not receiving any sort of help noting “no one helped...no internal help, we were more worried about each other's problem.”
4.6 Marketing Strategy For businesses that were forced to operate understaffed, compensating for the reduced staff took attention away from the strategic resources of their business leaders. These situations were caused by layoffs or hiring freezes, which both resulted from the uncertainty of when the pandemic would eventually subside. This was clearly expressed for the newly opened lifestyle fashion retailer: "if we could have run the business as I want to, we have been more people who works here. But as it is now, it's me and [employee]. Because it's risky to have employees because you don't know how the situation will go farther...but I need it (assistance). It's very hard..." Although it could arguably be beneficial, to a certain extent, for the business to have its leader gain more intimate tactical, working-level experience; the additional workload pressures, especially on owner / operators, such as the lifestyle fashion retailer, was a large burden and distraction: "when you don't have employees, you have to work very much self in the shop, instead of building up the business... because you can't focus on what you should really focus on.”
4.6.1 Demand Forces An observation, from the owner of the lifestyle fashion retailer, was the increasingly more busy retail consumer: "People are so busy. They don't have time to go and look in everything [gesturing]..., try it and so on." For her business, in general, she realized that they "have to go more digital"; and, for marketing, that "digital media is the future. I don't want to be on paper."
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In regards to digitalization, it wasn't just the products themselves becoming more digitized but its effect on the wider ecosystem. The owner of the record store explained the impact on consumption patterns downstream from how new music is promoted on traditional offline media channels. The perception was that radio stations are too risk- averse, so "they don't play new music," which offers less "chance to know about new music." This conservatism is exemplified in how they only allocate airtime to hit singles, even if an accomplished artist releases an entirely new album. For instance, "if Bruce Springsteen releases a new album, they play one track. And after a week they play 'Born in the USA' again". Because of these trends, he noted that much of the music does not even get made available to sell in the physical form or: "digital music. I mean, music that don't people buy (physically). Almost everything that's on the charts these days, nobody buys records like this [pointing]. They don't even buy records from Dua Lipa (current artist). Yeah, Post Malone (current artist) you can sell, but most of it are only digital. So it's extremely hard."
4.6.2 Organic - Outreach & Events Half of the businesses interviewed relied solely on organic marketing (n = 5), having no budget of any sort for paid advertising, in attracting new or retaining existing customers. In addition, 6 of these businesses also fell into the category of being dependent on social gatherings on-site; the excess overlap is accounted for here by the 2 companies that also engaged in paid marketing efforts (to be discussed in the next section). Pre-pandemic events with live music and dancing, for example, were important for the restaurant: "We used to have live music, much smaller at our other restaurant. And people loved that. Then, in this one we had that, plus sometimes opening kind of a nightclub on the weekend, with dancing and so on." The lifestyle fashion retailer also wished to be able to host gatherings, to "have something happening in the evenings and in the morning… So, we can have people come here and tell things to other people... have fashion shows… if we have that type of link, we sell very well and now you can film it and place it on [social media]..." As acknowledged here, interesting happenings on-premises can then be converted into digital marketing assets, which creates a virtuous cycle.
Most of the online marketing activity was directed on Facebook's platforms, namely Facebook proper and Instagram, on which all the interviewees, as previously mentioned, had a marketing presence. The nascent lifestyle fashion retailer, for example, was already active on social media; but as far as paid marketing had purposefully decided not to initiate such efforts against the slower demand and priority on web development: "I had chosen not to marketing yet, because we haven't built it up as I want to have it. You see, we haven't opened [pointing to the raw food & tea bar] and finished everything here. And so that's why I just want to slow start."
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4.6.3 Paid - Ads & Sponsorships Among the 4 interviewees engaged in paid marketing, unsurprisingly, the 2 businesses that were branches as part of larger chains had more budget from which to spend. Furthermore, as a result of the centralized corporate entity in control of marketing, the direct influence over content strategy or ad performance at the local level was disconnected. The largest chain represented was the multinational electronics store, which had 21 locations in Sweden alone. Therefore, in terms of marketing influence, to drive more online sales, the manager said it was 100%: "Not me, but the chain have done it. So, they have put much marketing online." On a drastically smaller scale, was the regional musical instruments chain, with 3 branches in total. The local branch, similarly, deferred to its "mothership," for higher-level brand marketing, and to an agency for Google AdWords.
Smaller still, in terms of marketing budget, were the other two businesses: 1) the fabric store, which spent "very little" on paid ads; and 2) the menswear retailer, which had two stores in the local area but fully dedicated their budget on sports sponsorships. For the ladder, there had been a complete shift away from paid advertising, years prior to the pandemic: "We had some budget for marketing until... I say, 2014/15. Then, we stopped because we feel it didn't give the effects wanted." Being a local business, the sponsorships were also focused fittingly: "from then, we started to not buy advertising… and instead we sponsor football / hockey team… on screens… on their website. And sometimes on the match dress (uniforms). So, we have about the same sum, but we put it on football and hockey."
4.6.4 Collaborations & Sponsorships Collaborating with other complementary businesses emerged as a theme for offering new products and services. Such partnerships, brand new and still in development, were being forged, respectively, by the two brick-and-mortar retailers. The menswear retailer (aforementioned above), when asked about ideas for their own proprietary brand label, divulged that: "It's in the pipe. So, probably from this autumn… We have a partnerskap (partnership)… with a brand. So, we will make some together. And we will decide (on the) fittings. So, it will be kind of our own, but still in a partnership." A positive aspect of the pandemic, as observed by the lifestyle fashion retailer, was "more collaboration between others... So we are going to start with collaboration with the restaurants in the town soon. Because we're going to have (a) tea bar with raw food here; but we don't make the raw food by ourselves. I want to have you know a healthy take and grab away and I'm going to cooperate with restaurants. And they make it for me because it doesn't compete with their own business, because it's just a healthy alternative to McDonald's..." While food & drink was an add-on to their core clothing business; for the menswear retailer, it was more of an integration -- stylistically, to materialize into physical garments, and in inventory terms. Although the trial would involve low
50 | P a g e quantities: "maybe 10 styles to start with. And we have maybe 1,000 for now."; there was a willingness to experiment and, possibly, expand their own brand horizon.
4.6.5 Customer Loyalty & Support In light of being under liquidation, and not being able to attain external financing, loyal supporters have tried to help the record shop by supplying product and operating capital: "some people have given me records and some have given me some money to stay alive. But nothing from the (banks)." From our observation, businesses were able to sustain some revenue from loyal customers as ‘they want to support small shops and business,’ as noted by the owner at Handelsgården.
4.6.6 Marketing Management Sales attribution between offline and online channels was observed to be an important aspect of marketing management, especially when there is a dramatic shift of revenue out of the store and onto the webshop. Addressing this attribution issue, the audio entertainment shop (Hi-Fi Klubben), the one business interviewed operating as part of a multinational chain, conceded "that's the problem", that the store does not "know what they buy" after a prospect leaves the in-store channel, or gets off the phone.
Therefore, rather than simply releasing the prospect online by themselves, they guide the customer along their customer journey as far as possible, hopefully, finalizing the transaction. In regards to inputting the order, to get the credit for it, they "always try to make it from the store". This sales process remedy is not absolutely guaranteed, however, as sometimes the customer is not yet ready to buy. In this scenario, the store is forced to tell the prospect, "take a look at what you're interested in and then call me back, so we can figure it out." If the prospect ends up finalizing the purchase online by themselves, they essentially drop out of the individual store's attribution funnel, and thus the store might end up underreporting earned revenue.
The issue of attributing, or sharing, in-store vs. web sales can ultimately result in a rupture between business stakeholders. The serial entrepreneur (BLANK the Hub) interviewed stated that she decided to close her previous fashion retail business (Tiger of Sweden) of 10 years because of this very issue. Her brick-and-mortar store would welcome walk-in customers, who after being helped would end up showrooming, or finalizing their purchases online. "They had (an) e-shop, but we didn't get anything from the e-shop."
In maintaining healthy relationships between stakeholders, cooperation is therefore crucial to thriving, or at least 'keeping the peace' between involved entities. While the audio entertainment business (Hi-Fi Klubben Umeå) did consciously direct customer purchases to flow through their store's ordering system, the manager also acknowledged that they "really work together with the online store." To give perspective, he noted that
51 | P a g e the other chains that he had experience working for previously suffered from the 'us vs. them' lack of unity (between individual store and web / corporate). Such disconnect, where "they have the online shop and we have this one (the store)," can lead to problems more serious than claiming the rightful attribution of nurtured in-store sales that converted online.
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5. Analysis and Discussions
5.1 General Pandemic impact and reaction of small business Small businesses faced major changes to which they had to adapt in order to sustain operations. Retail sales, unsurprisingly, continued to fall in concert with reductions in footfall. Out of necessity, businesses urged customers into their stores, mostly by reassuring them of the safety precautions being taken and the workarounds for those more apprehensive of contracting the virus. Regardless, the public health recommendation and general behavioral trend was to limit one's exposure to potential infection. This meant deliberately reducing unnecessary retail shopping, in contrast with consuming at-home at unprecedentedly high levels.
A virtue of small businesses, despite their competitive and financial restraints, is their agility to make quick and drastic decisions (Kubíčková & Toulová, 2013). This was intensified for business owners, who were motivated by their personal financial stakes in the companies to avoid failure. For example, for the restaurant, despite opening doors relatively recently (Sundelin, 2018), then seeing enough initial demand to justify expanding into a larger space only a year later, their relocation happened just months before (Zaion, 2019, October 19) the pandemic struck. The increased financial outlay -- mainly, of starting anew (e.g. interior renovation) and assuming higher fixed costs for rent -- was presumed to have already kept the business more acutely aware, financially. Therefore, the early disturbance from COVID-19's arrival was taken seriously in advance of its impending strain on the business, despite the pandemic's unforeseeable severity or extended duration.
5.2 Impact of Financial Sustainability
5.2.1 Initial Financial Impact As expected, there was an overall negative effect from reductions to footfall for retailers and table dining for restaurants. Even after the onset of the pandemic, during the initial period March-June (2020), the restaurant industry, in particular, was one of the highest under duress, with reduced revenue of 30-50% and 40% of the workforce laid off in the short-term (Boter & Lundström, 2020, p. 5).
5.2.2 Alternating Financial Sources Management in the businesses have been dominated by one individual (Pettit & Singer, 1985), which influenced their decision to reach out for external debt finance.
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Considering the costs of debt including agency costs and limitations. Keasey & McGuinness, (1990) stated that obtaining external financial sources would yield higher returns in the long run. One reason being that financial institutions who provide external loans have expertise on which business will be able to yield these higher returns. For the companies interviewed, applying for external financial sources was not an option. The companies feared the repayment of these debt would add to the already financial burden they are enduring. The uncertainty of how long the COVID-19 impact would last, had a great impact for these managers and owners on their decision of whether to take out external finance. With the exception of Company XYZ, the companies had retained equity from previous business operations. Due to this, they did not apply for debt finance from external sources. Keasy & McGuinness, (1990), noted that debt financing institutions including banks are unwilling to lend to small firms due to the uncertainty of generating higher returns. BLANK the Hub mentioned specifically that banks are not interested in loaning out to retailers anymore, even though the manager has been in the retail business for 20 years.
Burmans Musik was one company this year that was already being forced into a process of liquidation. The interviewee noted that he is no longer able to operate as a sustainable entity, in what Fleisher & Wright (2010, pg 180) defines as business failure. This contributed to the fact that the business was already incurring losses relative to pre- COVID circumstances. Faccio & McConnel (2006) noted that bailouts are usually given to large institutions with the help of political networks, for which a small business like Burmans Musik was not eligible. The companies interviewed had no political connections, nor networks, to attain financial aid considering their size along with poor turnover. It is acknowledged that Burmans Musik failure could be tied to non-financial circumstances (Cook & Nixson, 2000, p. 2), and even if they were able to obtain external funds, it would not create a positive enough impact, due to difficulties in adapting to change.
It was interesting to note that government aid was also scarce given the scale of the pandemic. The companies interviewed admitted to having applied for some form of government aid. The common observation here was that companies with low yearly turnover were not eligible for government support; this included Company XYZ and Burmans Musik. Zaion, the African restaurant was struck with a business tax instead of any government support. Nollnitti noted that they were to receive some financial aid to partially recoup lost profits, to the anticipated amount of 20%. Applying for government aid, however, was recognized as a time-consuming and effortful process. The observation here was that these businesses simply could not rely on government aid as a source of external financial support. Faccio & McConnell (2006) had the impression that large businesses and corporations are given first priority for financial assistance, whereas small businesses are usually neglected. The manager at Nollnitti, had a similar stance as well, and noted that government support does not work for small businesses and government aid is designed for businesses which are 'too big to fail.'
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5.3 Role of Marketing
5.3.1 The In-store Relationship Although some businesses compensated with improved performance in their e- commerce stores, all the interviewees that had storefronts recognized that their on-site customer experiences were all-around superior to those online. The in-store advantage is expressed throughout the customer relationship, in forging a direct bond with the small business's most primary stakeholder (Hult et al., 2011), which over time can develop into one of sincere trust (J. Aaker, 1997) and loyalty (Palmatier & Sridhar, 2017). Even from their first encounter, a business can take a more customer-centric approach (Palmatier & Sridhar, 2017) to better assess how a customer differs in their unique desires and wants, in order to tailor their recommendations accordingly. Our observation is that the more customers appreciated the level of personalized help received from sales assistants and staff (Morgan, 2011), the more easily they could anchor their decisions on such advice in making their purchases in-store (Tversky & Kahneman, 1974).
5.3.2 Shifting to digital As noted, all the companies interviewed had already maintained a web presence, mostly organically on social media, to stay active with their existing customer base and reach potentially new customers, with the limited available financial resources. The lifestyle fashion retailer, for example, was already active on Instagram, and averaging 32 likes per post, or 4.5% engagement (across their last 30 posts, as of May 19), as neared their first quarter in operations:
5.3.3 Capability Enhancement With a customer-centric approach (Palmatier & Sridhar, 2017), businesses enhanced their capabilities in booking reservations and managing online orders, which they then promoted as additional services to accommodate customers' unique and changing demands. The restaurant, for example, added order management and delivery capabilities by leveraging 3rd-party platforms, such as Foodora and Wolt. While effectively outsourcing this function was also a way of expanding its reach to potentially new customers, and orders it could have not otherwise fulfilled, it involved managing the interface between those platforms and their end customers, and therefore developing the specialized capability of channel management (Morgan, 2011). 55 | P a g e
Involving a lesser degree of channel management, online booking services were integrated into the websites (of the restaurant, hairdresser and lifestyle fashion retailer). Such services are considered here even more hands-off because they merely allowed stores to invite customers in without requiring extra coordination. For the restaurant, for example, delivery services still necessitated their kitchen to prioritize the flow of orders between on-site diners and 3rd-party takeaways, with an immediate 'hand-off' once ready. As mentioned, one reason the restaurant owner was considering the discontinuance of the services was because he felt bad about how little the individual couriers were getting paid. To reconcile this situation, he often prioritized those orders first, so as to not keep the couriers waiting, who were paid on a per-delivery, rather than hourly, basis. This decision, therefore, had impacted on-site customers, who during busier times would then experience longer waiting times for their dine-in meals.
It was implied, however, that the impetus for the restaurant implementing the decision to enhance its business, with order management and delivery, was through observation of other competitors already engaging in similar practices. Feeling obliged to follow suit and "learning by imitation", it can be argued that the restaurant enhanced its capabilities in a low-level dynamic manner (Morgan, 2011).
Resource Reconfiguration With limited financial resources and access to additional capital, businesses sought ways to upgrade their dynamic capabilities through resource reconfiguration (Morgan, 2011). The owner of the lifestyle fashion retailer (BLANK the Hub), for example, realized that she had to accelerate previous plans for developing their webshop. She, therefore, re-prioritized from previous plans of finishing the build in-store by choosing not to spend money on paid marketing and reallocating much of her own time and energy to the current project of focus. For the other project of opening up a raw food & tea bar, she sought to collect her resources and physical retail outlet by partnering with local food suppliers, which was secured by activating her stakeholder network (Kull et al., 2016).
A new collaboration was also forged by the other fashion retailer in this study, which could become even more strategic for the menswear retailer (Nollnitti), as they are to introduce their own branded label, after being in business 20+ years. Although the new clothing line will start off as a small experiment, between the retailer and their new production partner, it could help the retailer build more brand equity (D. Aaker, 1984, 1991) than currently possible through the resale of other labels. While engaged in market sensing (Valdani & Arbore, 2015) in recent years, the retailer had noticed a shift in consumer demand and was, thus, deliberating over whether to supply more in the casual and outdoor segments. From a brand perspective, it would be interesting to see if the company moves in that direction and perhaps assumes a brand personality (J. Aaker, 1997) that imbues more ruggedness, for instance, to reflect such quality generally
56 | P a g e desired in outdoor clothing. The retail owner expressed that he was still observing cautiously, due to the uncertainty of the pandemic, but conversely also open to accelerating that change once the decision was made.
5.3.4 Paid Marketing While the only 2 companies that were executing considerable paid social campaigns were also branches of multi-store chains, we argue that for the other businesses it was more than just a constraint of resources but also a potential lack of knowledge (Morgan, 2011) that prevented them from effective paid marketing strategy. Even considering the needs of small businesses to spend marketing budget effectively and efficiently, modern behavioral targeting (Solomon et al., 2019) techniques allow for granular segmentation of customers, while limiting spend to trigger off of a narrow set of criteria. In the case of the retailers with e-commerce stores of viewable products, advertisements could be restricted to only display in a retargeting (Lambrecht & Tucker, 2013) manner for customers who already viewed or added a specific item to their online shopping cart. Such practices enable companies to market in a more customer-centric (Palmatier & Sridhar, 2017) way, by showing the customer that their unique preferences are acknowledged with only the ads of the highest probable relevance and interest. To further minimize any reactions of negative sentiment (Chatterjee, 2008) from customers, the ads could be throttled in such a manner to reduce their frequency, or the amount of times they are displayed to a social media user.
For companies lacking the knowledge or resources to manage their own digital marketing, one option could be to enhance such specialized capabilities (Morgan, 2011) by hiring an outside agency. For marketing effectiveness, however, this could require a cross-functional (Morgan, 2011) effort, particularly when concerning the management of customer relationships (CRM) and brand. While this was managed at the headquarters of the musical instruments company interviewed, it is presumed that there were initial costs associated in syncing with the agency for optimal market segmentation and branding (J. Aaker, 1997). In addition to such costs for channel management and on cross-functional resources (Morgan, 2011), the agency's base and/or variable fees could be prohibitive for smaller budgets, like that of the home decor business interviewed.
A confluence of such factors mentioned above could have influenced the decision for the menswear retailer to halt previous paid social efforts and transfer the budget entirely to local sports sponsorships a few years back. A major observation for this was the fact that the store did not have any webshop at that time, nor could it justify investing the resources to do so currently, as reasoned by its smaller scale. Not mentioned earlier in the empirical section, among the group of companies dealing with the challenge of tracking revenue sourced across offline and online channels, the issue here also appears to be one of attribution and return on ad spend (ROAS). Although their paid advertising objective was to attract customers from social media online into their physical stores, the difficulty was in the lost measurement of fully knowing which walk-in customers
57 | P a g e were driven from a displayed ad. Ironically, the budget was shifted completely to an even more abstracted means of marketing, namely in sponsorships. Therefore, despite developments in academic research, illuminating evaluation techniques within the marketing-finance interface; in practice, performance metrics are not as clearly evaluated, nor do the ultimate budgetary decisions preclude allocation into the "black box" (Morgan, 2011).
5.3.5 Organic Marketing The majority of small businesses were driven by their organic marketing activities, particularly through their owned channels on Facebook and Instagram. Given that posting on these channels incurs no additional external expense, they were the cheapest and also quickest means to communicate updates to customers. The owned media also reflected the agility of small businesses in recognizing the potential demand impacts and adapting accordingly. This was particularly apparent of restaurants that promoted their options of takeaway and delivery, which became critical mainstays of continuing operations (McCabe & Erdem, 2021). This business understanding to shift quickly was exemplified by the restaurant interviewed, almost immediately by promoting takeaway options in their first response to COVID-19, in their marketing communications on Facebook (on March 17, 2020; see Appendix for original post).
Communicating Values More than the promotion of food for takeaway, the restaurant also explicitly addressed initial COVID-19 concerns, both for their customer's peace of mind and for public health authorities, as they stated their position of adherence to officially recommended protocols. Therefore, not only did it directly reflect a commitment to safety & sanitization but also their business ethics, by publicly announcing their proper employee quarantining protocol with paid sick leave. While this type of communication, depending on the context, could be misconstrued as a form of marketing to urge customers in-store; with pure intentions, the values reflected should be those of social responsibility and "knowledgeable self-restraint" (Andrews, 1971).
Customer Loyalty & Support Customer loyalty appeared to transcend the purely economic formulations of how a customer becomes increasingly more resistant to change to a competitor, and thereby less price sensitive (Palmatier & Sridhar, 2017). Businesses reached out to their customers, via Facebook and Instagram, requesting support through continued purchases. In return, their customers 'liked' and shared their social media posts, to impart additional value to them as earned media. Furthermore, in addition to translating their online support into making additional purchases, some loyal customers went so far as to provide donations, for the most part monetarily and also by supplying free records, in the case of Burmans Musik.
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Community Customer loyalty and word-of-mouth (Eckert & McConnell-Ginet, 1992) is an expression of the importance of community. The majority of the small businesses interviewed were found to either be local institutions with rich histories and/or literally one-of-a-kind providers of their products: ● The record store was the 2nd oldest in Europe and the owner took pride in considering his establishment "the most social place you can find (in) this town". ● The gift shop owner, in describing their occasional social gatherings, sitting together making handicrafts, expressed a joy that was not motivated purely for promoting sales: "I don't know if it makes people buy more. But it's quite fun". ● The musical instruments store no longer could offer group music lessons or open up their rehearsal facilities for local bands to get together and play. ● The restaurant, which could no longer host live music or evening events, was in desperate financial need and endangered as the only place for African cuisine in town.
Even the newly opened lifestyle fashion retailer was also worried about their run rate of how long they could operate at negative margins before having to close doors. Therefore, the owner was very much hoping to be able to host fashion shows and other events, in order to introduce the city's residents to her new retail concept and build up a community. Furthermore, in addition to the supply chain disruptions and product sourcing issues, mentioned in the empirical findings, the part of the store that was dedicated to secondhand clothing also faced a lack of supply. There simply were not enough people coming in the store to shop for new clothes, let alone bringing previously purchased items back in to sell second-hand, the exchanges of which, could be used by the store to further strengthen community in accordance with social object theory (Solomon et al., 2016). Therefore, such virtuous recycling of clothes was not being realized. Furthermore, a considerable portion of the store's creative assets for building up an online community was reliant on interesting happenings and publishable content filmed on-site.
The intrinsic social elements of shopping should also be considered. For instance, coming out from the fitting room, the shopper may venture back out onto the sales floor to ask for a second opinion from a sales associate or their shopping companion(s), who they came with. Group shopping (White & Dahl, 2007) research has shown that shopping companions can themselves influence purchasing decisions, with the peer dynamics among them resulting in increased purchases. Furthermore, as knowledgeable and/or trustworthy sales associates (Morgan, 2011) can build customer rapport and help aid the decision-making process (Tversky & Kahneman, 1974), small business retailers have the opportunity to further tune their service model to shoppers' receptiveness and needs. Therefore the knowledge and assistance competencies of sales associates could be sustained as a competitive advantage (Barney, 1997) that is interwoven throughout a
59 | P a g e shopper's purchasing journey. However, a customer must physically enter the store, for sales associates to be able to fully guide the sales process in real-time fashion.
5.3.5 Home Integration Businesses were keen on building relationships and trust with their customers at-home, by extending their at-home services. An example of this was seen with the musical instruments store as it required pre-planning for larger items and set-up upon delivery, as with home decor and audio entertainment. The home decor business began to offer consultation directly inside the homes of prospective customers. Once in the home of a customer, especially during installation, the business could make other complementary suggestions. For instance, when delivering a TV, the audio entertainment company could also recommend an additional speaker, for building a fuller and richer entertainment system. In this way, rather than simply explaining benefits verbally over the phone, they would be able to practically show them in person and demo the experience live in-person.
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6. Conclusion
6.1 General conclusion The main objective of this study was to research the impact small businesses had after COVID-19 struck, how these businesses adapted marketing strategies over the course of the pandemic and what role finance played to sustain the business. This one-year view informed our research question: “How has COVID-19’s impact on small businesses influenced access to financial resources and shaped the shifts in marketing strategy.”
This degree project interviewed 10 small businesses that all experienced an unavoidable impact of COVID-19 in their daily operations. The businesses were initially unaware of the scale of the impact that COVID-19 would have on their business, but they adapted in implementing new ways to market their business and at the same time fund such projects. Business had suffered major losses and reduced turnover from the pandemic and it was an opportunity for them to look for alternative ways to sustain long-term. This research clearly states on how businesses choose to market their business as a result of the pandemic. It also observed which businesses required financial help, both externally and internally, and the difficulty of attaining financial support during times of crisis.
The discoveries from this research emphasize many of the hardships that continue to be endured, as the pandemic (hopefully) wanes from its peak period of crisis. First, all businesses experienced a demand shortfall from the reduction of customer visits, with the exception of the musical instruments store that benefited greatly from the general lift in demand for the product category. Several businesses encountered supply chain disruptions, however it was the drastic reshaping of consumer demand that forced businesses to rethink their usual business operations. While some businesses managed gaps in supply and demand by ordering less, others had to commit orders further in advance and build up inventory, which could potentially lead to liquidity risks in the future. Shifting demand from physical stores to online stores was mostly achieved by leveraging previously established web infrastructure that also accompanied customer demand. The small fashion and clothing businesses interviewed, however, were not able to attract the demand online and, as a result, struggled to maintain usual operations.
Second, it was observed of small businesses struggling to retain demand that marketing resources must be built up, prepared and ready to reconfigure dynamically in times of crisis. While agile, most small businesses do not have the financial resources available to suddenly unleash for implementing drastically new marketing strategies. Social media platforms are commonly used for organic outreach, which incurs minimal capital outlay but a following must be built up ahead of time. To continue to stay relevant and valuable in the minds of customers, businesses provided higher levels of in-store and
61 | P a g e after-sales services. This meant that businesses increased their deliveries and fulfillment of services in the homes of customers.
Finally, equity was essential to the survival of small businesses, most of whom were ineligible for adequate external financing options, both before and during the crisis. Those that had been in operations for a longer period of time, at least more than 6 years, survived on their internal financial sources. They managed not to resort to external debt financing institutions in continuing operations, even after incurring losses. A significant factor of abstaining from external finance was the uncertainty of debt repayment, along with the unknown expected timeframe of the pandemic. The struggling businesses found themselves in a situation just waiting until things got better.
6.2 Contributions This degree project provides several contributions specifically for small businesses trying to sustain operations during times of crisis. The researchers believe that small business owners and managers require updated infrastructure and information in order to stay relevant and retain demand. This study demonstrated that businesses should not stick to traditional ways of business and proactively digitize their business, perhaps even if it means obtaining external finance when times are good. Large scale pandemic related crises, although rare, should not preclude businesses from thinking about how to transform and optimize their businesses in preparation for unexpected circumstances. Smaller businesses have the advantages of flexibility in adapting to marketing changes, in comparison to larger companies (Kubíčková & Toulová, 2013). To adapt to change, smaller businesses should concern themselves with having the necessary resources ahead of time. Finance can enable a company’s strategic development and growth to encourage greater entrepreneurial endeavors (Cook & Nixson, 2000, p 2).
This research highlights certain costs and benefits of internal financing sources, especially when unavailable externally. Businesses that had accumulated sufficient internal funds, were able to establish more digitized business practices and continue running their operations. If external expertise is needed, small businesses should explore the option of additional financing to optimize their businesses against future disruptions like COVID-19.
This research also shows the role of the government and its effectiveness during the crisis. Small businesses understand that it is not possible to rely on monetary support from the government. It is commonly acknowledged that government support is designed, and more effective, for large companies and corporations. How marketing is used to interact with customers has changed considerably in recent years. Therefore, many small businesses could re-tune or expand their strategies. Especially for product categories that are in secular decline, innovation is necessary to prevent failure. Such innovation could involve new product / service development or modification, or wrap 62 | P a g e additionally desired services around the offering or accommodate new consumption models. This could include promoting the fulfillment of new at-home services or more seamlessly integrating the in-store and digital purchasing / consumption experiences.
6.3 Societal Implications The small business value lost by the community can certainly measure greater than the sum of the recovery costs from unpaid tenant rent, employee wages or other product- market tangibles (Wernerfelt, 1984, p. 171). As discussed, the majority of a company's market value can be derived by its intangible resources (Capraro & Srivastava, 1997). As this measure may only intrinsically be based on public valuations and later-stage transactions, it may certainly be difficult to assess the true community value of small businesses. Given that so many of the businesses interviewed in this study were long- standing and the sole providers of the types of goods and services offered, municipalities and governments could benefit from keeping a running economic assessment on the value of their small businesses. In this way, limited government aid could be more judiciously distributed in times of crisis or chaos. Even in calmer economic climates, cities could self-assess the types of businesses that would lend additional value, by comparing themselves with other innovative or important small businesses of other cities, then adjust new business incentivization accordingly. Echoing the notion, often attributed to Winston Churchill, governments and business leaders alike should 'never let a good crisis go to waste'.
6.4 Limitations and Future Research Due to the breadth of this study, it has its many limitations. First, the study reflects only the voices of certain small businesses in Sweden, with the majority located in the city of Umea. Further research is, therefore, required in other regions of Sweden and Europe. The study is also limited to service-oriented businesses within certain sub-sectors of: restaurants, fashion, beauty, home decor, music, musical instruments and audio / video entertainment equipment. Hospitality, for example, was a sector that was also dramatically impacted during the pandemic but effectively ignored to better isolate the findings of our study's results. Moreover, the study was conducted during the ongoing COVID-19 pandemic, which invites further research that emphasizes the impacts post- COVID and which practices were successful in overcoming the pandemic for those that survive.
Further addressing limitations of the study's methodology and scope is the fact that the results of open-ended answers, in this case of semi-structured interviews, are not perfectly verifiable (Saunders et al. 2019). Furthermore, the qualitative results are not entirely compatible with the quantitative study, from which this study was inspired. Therefore, further quantitative research should be warranted to conclude the measurable impacts of the pandemic. The study also invites further qualitative research, considering
63 | P a g e that only 10 companies represent its findings. Therefore, it could be taken as a pilot study for justifying efforts of a much larger study of a greater sample size.
Approaching this study through other qualitative data methods -- such as observation, diary methods or focus groups -- would have most likely resulted in starkly different findings. An observational study would be interesting and potentially more accurate, although we assume that such a study would have to be longitudinal in nature and be tech-enabled with the business owner opting into the appropriate privacy consent agreements. The diary method could allow for an even deeper probe, but we suspect that attracting a willing participant pool of similarly busy founders might have to be framed as some kind of stress relief or result in more consultative analysis. Finally, focus groups, not with the consumers of the businesses but of potentially matching stakeholders could be the most attractive for participants and valuable, established as an economic round table of sorts.
The specific business focus of this research was on alternate sources of finance and marketing strategies. However, other key areas that also informed or impacted businesses include: management, supply chain, business innovation and fundamental business model changes. This is admittedly one of the crucial limitations of the research, as different business functions could provide completely different or improved views on the cause-and-effects speculated. Analyzing these fields would serve well as future research prospects.
One limitation, the researchers noticed during the interviews was the initial reluctance of business owners and managers regarding the topic of specific and sensitive financial details. Furthermore, given that the focus of financial study was on monetary resources, future research could better analyze the relationship of other fundamental balance sheet components, namely assets and liabilities. On the marketing side, more research is needed on the optimal tech stacks, or digital toolsets, for small businesses at their stage of growth and appropriate for their desired rate of growth and ultimate objectives. Adding to this study directly, future research should explore deeper into the finance- marketing interface and the effectiveness of funding marketing activities throughout crises.
6.5 Quality Criteria
6.5.1 Validity Validity is concerned with whether the findings really appear as purported (Saunders et al., 2019, p. 150). As guided by Bell et al. (2018, p. 363), 2 types of validity are discussed: internal and external. Internal validity confirms whether there is a good match between the researchers’ observations and the theoretical constructs. External validity refers to the degree to which findings can be generalized across social settings.
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In terms of external validity, the study observes the phenomena recorded from the interviews of the 10 different companies through the lenses well-established theoretical frameworks, such as the internally-focused resource-based view (Wernerfelt, 1984) and modern, yet universal first principles of marketing, competition and resource constraint (Palmatier & Sridhar, 2017). The researchers believe that the findings and results are, therefore, equally applicable to other organizations of similar size and circumstance (Saunders, 2007, p. 151). In terms of internal validity, considerable analysis of secondary sources and theoretical preparation was done prior to the interviews, in order to collect the appropriate primary data for answering the study's specific research question. Thus, the interview questions were composed, in accordance to the theoretical frameworks and interpreted in pairs with a serious consideration to eliminate our own biases.
6.5.2 Reliability Reliability refers to the extent to which the data collection techniques and analytical procedures will yield consistent findings, as described by Saunders et al. (2019). During the face-to-face meetings, the researchers vigilantly observed the interviewees, while watching out for possible threats to reliability, such as participant bias (p. 149). Although the interviewees may have been trying to relay what they believed to be true, especially in the case of managers, the interpretation considered what their superiors might have wanted them to say about the business. Starting with a valid interview guide, as prescribed by Saunders et al. (2019, p. 367), the results were controlled to be as reliable as possible and expected to produce consistent findings, if repeated.
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Appendix
1. Questions for Interview Guide Describe different phases of crisis. Looking back is easier than expected vs difficult than expected. What have you done differently than you know today?
1. When did you start this business? 2. How risky was it for you to start? 3. As for your background, where are you from originally? a. Domestic vs. Foreign b. Where did you get the know-how to start this business? c. What is your previous work experience in this business sector. 4. In what ways do you think COVID-19 has affected your industry, in general (positively or negatively)? 5. How have those effects been on your business, in particular? a. How do you feel about the impact of digitization (i.e. its role during the pandemic, and also going forward)? b. What difficult decisions (hard choices) did your business have to make (during this period)? 6. Going back to the start of the pandemic, how did you think this news was going to affect your business? a. If worried, did you make any sudden changes in reaction to this expectation? b. If not, is there anything that you ended up doing but wish had done sooner? 7. Focusing on marketing, how did you change your strategy and activity? a. What kind of adjustments did you notice from others in the industry, in terms of their marketing strategy or activity? i. Communication - perhaps in the type of content published or, more subtly, in the tone of the messaging? b. If you were spending money before on paid media, or advertising, how did that change for your business? i. Channels (i.e. digital + offline) c. Why did you see the need to make these changes? i. To stand out; follow the trend 8. How (else) have you had to adjust your internal resources to reduce / manage costs? a. Waived or reduced their payroll? b. Reduction in employment count? i. How many employees do / did you have?
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9. Do you know any business owners in your industry who have received any form of government support? a. Have you...? i. reduced employer contributions, compensation for sick pay costs and support for short-term layoffs ii. < 1/5 use adjustment support and deferral with VAT and employer contributions b. Do you think that the support offered was available or help enough? c. How else do you think the state could have helped businesses like yours? 10. Regardless (of #4), how did you help / get help from your network? a. whether: 1) within the industry, located nearby or faraway; 2) an adjacent / different industry 11. In what ways did you perhaps think about developing new business opportunities ? a. If yes) do you foresee these opportunities to be worth continuing, after the pandemic? b. Did you expand offerings via delivery? i. For non-retail, at-home fulfillment? c. Did those involve expanding outside of the local market (100+km)? i. If yes, or had already been), how many of your customers are local? d. #retail) Did that involve becoming more internationalized (i.e. exports)? i. If already selling abroad before, how important were those customers to the health or growth of the company? e. Were there any ideas that you abandoned (i.e. did not end up implementing)? i. Due to constraints in resources or feasibility ii. Do you feel that such investments have just been postponed? 12. Did (/ do) you ever consider taking external financing? a. If not) was it because you had enough resources previously saved up? b. If yes) how did you perceive the risk of additional financing compared to when first starting out, and getting the business off the ground? i. How difficult was it to receive additional financing during this time? ii. To confirm, was this additional to pre-existing debt or new to the company? c. If indebted) Did your previous debt level make it harder for you to obtain loans (short-term or otherwise)? i. from an accounting perspective, research shows that the older a company is, the more equity that they have built up, in relation to their assets. This ratio, of equity-to-assets, for younger companies may be around a quarter; while older companies, with less relative debt may have a ratio of a half, or twice as much
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ownership than when they were younger. Are you able to share how much debt your company has? 1. Maybe at least the proportion of debt (relative to the overall business)? d. Did you get this financing from a traditional source (e.g. bank)? e. Do you own 100% of the business by yourself (i.e. sole proprietor)? i. Have you received any financial help from friends or family? 1. As a loan? Terms? ii. Would you consider selling partial ownership (i.e. equity) in exchange for extra cash? 1. For operational support or to invest in CapEx 13. How did you use (/ would you have used) extra financing to support marketing efforts? 14. How do you think your customers and the community value your business? a. #social 15. Has the pandemic made you want to change your business or get into something different? a. Motivation to expand / restart; Fear / anxiety of failure 16. Final comments, new ideas or suggestions for improvement?
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2. Zaion - First Addressing COVID-19 (2020, March 17)
(translation) (original)
Zaion Horn of Africa closely monitors the Zaion Horn of Africa övervakar noga spread of the Coronavirus (COVID-19) to spridningen av coronavirus (COVID-19) keep our customers, employees and the för att hålla våra kunder, anställda och family healthy. We have adopted the familjen friska. Vi har antagit följande following amendments to our existing ändringar i våra befintliga hälsoprotokoll health protocols in accordance with i enlighet med rekommendationer från recommendations from the Public Health folkhälsamyndigheten. Authority.
It has always been our policy to strongly Det har alltid varit vår policy att starkt urge all employees who feel sick to stay uppmana alla anställda som känner sig home with paid leave. sjuka att stanna hemma med betald ledighet.
We train all employees in hand washing Vi utbildar alla anställda i procedures and make sure we all wash handtvättförfaranden och ser till att vi alla our hands and use hand sanitizer several tvättar händerna och använder times per day. We also serve our visitors handrensningsmedel flera gånger per dag. to wash their hands in place before we Vi servera också våran besökare att tvätta serve food. händerna på plats innan vi servera mat.
We continue to offer all customers the Vi fortsätter att erbjuda alla kunder opportunity to buy take away and lunch möjligheten att köpa take away och lunch box box 1, lunch box 4 different vegan stew. 99 kr 1,lunch box 4 olika vegan gryta. 99 kr 2, Two different meat dishes with chicken 2,Två olika kött rätter med kyckling gryta stew 99 kr 99 kr
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