As the new coronavirus spreads beyond China into countries around the world, the full impact of the virus is becoming increasingly clear. In less than a month, hundreds have died and tens of thousands have been infected worldwide. To assess the global impact of the outbreak, Dun & Bradstreet has prepared a special briefing report: Business Impact of the Coronavirus.
To stop the spread of the virus, China has taken every measure to control it. The Chinese New Year was canceled in large parts of China and entire cities were locked down. Without these precautions, the virus would likely have spread much further. However, the precautionary measures that have been taken do have an impact on companies worldwide.
To assess the global impact of the outbreak, Dun & Bradstreet has prepared a special report: The Worldwide Business Impact of the Coronavirus. The goal is to help companies with ties to the affected regions assess the potential impact on their businesses, supply chains and the economy at large.
Business Impact in China
According to the report, the range of companies affected is vast, but a few sectors stand out:
- Service providers - Under normal circumstances, Chinese New Year is one of China's biggest and most profitable holidays. Due to the outbreak, the Chinese government has canceled mass gatherings to prevent further spread of the virus. Due to the impact on the holiday season and travel restrictions, service providers in China are experiencing pressure.
- Manufacturing - Equally affected by the travel ban, manufacturers are having difficulty getting raw materials to their factories. In addition, many manufacturers will have to delay any reopening due to quarantines and travel delays.
- Wholesale - Like manufacturers, wholesalers in the affected areas are struggling to get their products to customers. They are affected because their suppliers are struggling with staffing issues. In addition, most businesses in the affected areas are small business owners with fewer than 10 employees and small businesses with fewer than 100 employees. These businesses are likely to be hit harder by the crisis and may have a harder time recovering once the outbreak is contained.
This map illustrates the Chinese regions with 100 or more confirmed cases of coronavirus and the percentage of all Chinese businesses affected.
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Impact on the global supply chain
Companies outside China are affected because Chinese suppliers are unable to deliver products and materials. To compound the problem, many suppliers outside China rely on suppliers in China to meet their obligations to their customers.
If the outbreak continues, it is likely that the impact on companies worldwide will increase and that companies worldwide will experience pressure because their Chinese partners in the services sector are not or no longer able to make payments on invoices.
By identifying risks in advance and working toward a solution, global companies can protect their supply chains and create contingency plans. Open communication with both suppliers and customers can help maintain these relationships and reduce uncertainty during the outbreak.
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The full Business Impact of the Coronavirus report is analyzed:
- The number of active companies, including branches or subsidiaries of foreign companies and headquarters, in the affected Chinese region;
- The number of companies and Fortune 1000 companies worldwide that have one or more Tier 1 or Tier 2 suppliers in the affected Chinese region;
- The percentage of affected industries within the affected Chinese region;
- The economic impact of the coronavirus outbreak compared to the impact of both SARS and Zika viruses on global and local markets;
- Two different scenarios around containment and the predictive impact for both.
The report also includes both short-term and long-term best practices on how companies can protect their supply chains during the outbreak. These practices can also be applied to other contingencies.
Click Read more to get the full Business Impact of Coronavirus report, including best practices to protect your supply chain.