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 2 | P a g e 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 3 | P a g e 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 4 | P a g e 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) ..............................................................................