Corona virus, covid-19, pandemia

1. 20 de março de 2020
BCG ROUNDTABLE BRAZIL:
Como reagir aos impactos do
COVID-19

2. 1
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3. 2
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4. 3
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5. 4

6. 5
Apresentadores
de hoje
Julien Imbert
Managing Director and Partner
São Paulo
Otavio Dantas
Managing Director and Partner
São Paulo

7. 6
Available BCG
perspectives on
COVID-19
Outbreak dynamics
and developments
Economic impact
scenarios
Rapid-response
checklist
Survey of
company responses
Leading through
the crisis
Sector-specific
perspectives

8. 7
Agenda
Q&A
BCG's resources
Perspectives on leading through the crisis
How companies are responding
Strategic and tactical impact scenarios for the crisis and recovery
Brazil readiness to deal with COVID-19 - initial thoughts
COVID-19 dynamics
13:10
13:05
13:00
12:50
12:45
12:40
12:35

9. 8
COVID-19 dynamics

10. 9
Note: No of cases scaled by square root is used as size of the bubble to show extent of spread
Source: National Health Commission China, Johns Hopkins CSSE, BCG Henderson Institute analysis
World-wide COVID-19 Cases as of 19 March
Total
Cases
Total
Deaths
245K ~10,000
Outbreak continues to accelerate in Europe and Americas, early
Data as of 19 Mar
Brazil cases

11. 10
Daily number of new cases detected
Reported case count growing rapidly
5,000
0
10,000
15,000
20-
Feb
19-
Mar
28-
Feb
24-
Feb
16-
Feb
3-
Mar
7-
Mar
11-
Mar
15-
Mar
! Average daily growth of past 7 days
Source: National Health Commission China (China-specific data), Johns Hopkins CSSE(Non-China Data), BCG Henderson Institute analysis
# cases reported
New
18-19 Mar.
Total
Avg. daily
growth¹
108
7.733
2.370
245
4.525
2.501
81.255
41.035
18.407
8.652
18.077
10.891
2.186
16.290
4.754
14.250
0%
13%
8%
1%
24%
18%
19%
28%
33.095
230.055 17%
Data as of 19 Mar
Chinese cases
plateaued end of Feb
Accelerating
outbreak in Europe
and North America South Korea
Spain
France
Germany
US
Rest of the world
Iran
Italy
Greater China
Brazil 246
647 24%

12. 11
22-Mar
Mixed signals in last 2-3 days
Sustained decline in new cases
Most-affected countries are at different phases of outbreak cycle
2,000
8-Mar
23-Feb
26-Jan
1,000
9-Feb
12-Jan 22-Mar
0
#of new cases
22-Mar
0
12-Jan 26-Jan 9-Feb 8-Mar
23-Feb
1,000
2,000
#of new cases
USA France Brazil
9-Feb 23-Feb
12-Jan 26-Jan 22-Mar
8-Mar
0
1,000
2,000
#of new cases
12-Jan 26-Jan 22-Mar
9-Feb 8-Mar
23-Feb
0
2,000
4,000
6,000
#of new cases
12-Jan
0
26-Jan 9-Feb 23-Feb 8-Mar
1,000
2,000
#of new cases
South Korea Italy Iran
Source: Johns Hopkins CSSE, BCG Henderson Institute analysis
Data as of 19 Mar
Steady acceleration so far
26-Jan
12-Jan 9-Feb
1,000
23-Feb 22-Mar
0
8-Mar
2,000
#of new cases
Early phase of transmission
1st case
Jan 20
1st case
Jan 31
1st case
Feb 19
1st case
Jan 20
1st case
Jan 24
1st case
Feb 25
No large scale lockdown enforced
Restrictions on travelers from China
Lockdown
(Lodi province)
Feb 21
No large scale
lockdown enforced
Lockdown
Mar 17
Lockdown
(California)
Mar 18

13. 12
Most countries now responding strongly to outbreak
School
closure
Restricted
assembly
Non-essential
business closure
Domestic travel
restrictions2
International travel
restrictions
Non-essential local
mvmt. restrictions
China
Spain
France
Switzerland
Italy
Iran
Denmark
Germany
US
South Korea
Japan
Brazil³
Note: includes nationwide actions and actions taken by major local or regional governments. 2 Some German + US rail services are being reduced but not through government mandate
International travel restrictions flagged if any bans put in place or limits in place; Internal travel restriction includes reductions in public transport, or restricted access; Non-essential businesses include at
least restaurants, entertainment venues; School closures are any mandatory state closures; Assembly restrictions include mandatory and advised restrictions on large groups, restrictions on e.g. faith based
gatherings; Non-essential local mvmt includes stated restrictions on being outside or curfews 3. Most reaction in Brazil in a regional level | Source: Government and media reports
Government responses1
(As of 17 Mar)

14. 13
0
400
100
200
300
2013
Number of monthly cases worldwide
2018
2014 2015 2016 2017 2019
Source: US Centers for Disease Control; World Health Organization; BCG Henderson Institute analysis
Example: MERS (caused by a coronavirus)
0
30
10
5
15
20
25
UK Deaths per 1,000 persons
6/29 7/27 8/24 9/21 10/19 11/16 12/14 1/11 2/8 3/8 4/5
1st wave
2nd wave
3rd wave
1918 1919
Example: Spanish Flu
2014 outbreak
in Middle East
2015 outbreak
in Korea
Longer view: Historically, many outbreaks experienced multiple waves –
risks remain until vaccine in hand

15. 14
Brazil readiness to deal with
COVID-19 - initial thoughts

16. 15
Initial reflections regarding Brazil readiness to deal
with coronavirus considering three lenses
COVID-19 spread Critical cases Deaths

17. 16
0 5 10 15 20 25 30
1,000
100,000
1,000,000
10
100
10,000
Cumulative number of cases, by number of days since 100th case (log scale)
Number of days1
Brazil has shown a growth path similar to Spain, France and
Germany, with most cases concentrated in SP and RJ
Note: US numbers are excluding numbers from Diamond Princess cruise ship 1. Number of days after exceeding 30 confirmed cases 2. Average daily growth
of cases for the last 3 days; Source: Johns Hopkins CSSE, BCG Henderson Institute analysis
China
Italy
South Korea
USA
Avg. growth line
Japan
Brazil
Germany
Iran
France
Spain
# cases reported in Brazil (top 5 states)
New
18-19 Mar.
Total
Avg. daily
growth²
18
37 53%
RS
15
31 43%
BA
21
42 30%
DF
33
66 29%
RJ
122
286 24%
SP
54% of cases are located in 2 states
• São Paulo (44%)
• Rio de Janeiro (10%)
COVID-19 spread
Data as of 19 Mar

18. 17
São Paulo seems to have learned from Wuhan and
Lombardy, taking actions relatively earlier on
COVID-19 spread
Sao Paulo
Wuhan
Lombardy
N-3 N-2 N-1 N N+1 N+2 N+3 N+4 N+5 N+6 N+7 N+8 N+9 N+10 N+11 N+12
~100 cases
41 45 62 121 217 322 384 454 531 577 657 1549 1864 2220 2598 3174
n.a. 15 55 112 166 231 249 349 474 552 887 1077 1326 1497 1777 2008
15 18 45 105 115 124 195 211 211 239 286 (today) - - - -
Schools
closure
announcement Shopping
Centers closure
Accumulated cases per day
Region
lockdown
Schools
closure
announcement
Region
lockdown
Source: Johns Hopkins CSSE, BCG Henderson Institute analysis
Sports
suspended
Soccer league
suspended

19. 18
Brazil demographics may inhibit COVID-19 critical
cases; however, country is subject to other risk factors
1. Data from OECD Health statistics (2012-2018). Observed death rate for confirmed COVID-19 cases in Mainland China as of February 11, 2020, 3. Data based on total sales volume
per country 4.Demographics of the countries as estimated by the United Nations for 2019
Source: China Center for Disease Control (CCDC), World Population Prospects: The 2019 Revision, Worldometer, The tobacco Atlas, OECD
9%
5%
10% 0.3%
0.2%
0.2%
10%
12%
7%
10%
2%
5%
Groups at risk
Diabetes
Hypertension
Chronic respiratory disease
Smokers
Cardiovascular disease
Elderly
Cancer
Demographics
(population by age¤)
Prevalence of cancer
(%among population¹)
Diabetes
(% among 20-79 years old¹)
Yearly cigarette consumption
('000 cigarettes per capita³)
Avg.
death
rate²
Avg.
death
rate²
Avg.
death
rate²
Avg.
death
rate
80+
70-79
60-69
2.0
1.5
0.3
1
2
3
4
1
3
2
Not exhaustive
Critical cases
2%
4%
8%
14.8%
8.0%
3.6%
14.8%
7.3%
n/a
4
0,73%
0,36%
0,65% ~0% ~0% ~0%
n/a
n/a
n/a 1,1% 2,3% 0,9%
Simple
estimates
Simple
estimates
Simple
estimates
Simple
estimates

20. 19
Brazil apparently has a decent number of ICU beds
Still, with a huge discrepancy in distribution amongst regions and amongst public and private systems
34,7
29,2
20,3
12,5 11,6 10,6 9,7
7,3 6,6
4,2 3,6
China
United
States
Germany Brazil France
Italy South Korea Spain Japan United
Kingdom
Portugal
ICU beds /100.000 hab.
Note: SUS: number of ICU beds in public hospitals over the total population not covered by private health provider
Source: Critical Care Bed Capacity in Asian Countries and Regions (2020); Society of Critical Care Medics (SCCM); Associação de Medicina Intensiva Brasileira (AMIB); OECD
Disclaimer: ICU saturation due to other illnesses and non ICU beds availability may impact COVID-19 treatment
SUS Private Total
North 7,5 56,4 12,5
Northeast 8,8 49,7 13,6
Central-west 11,7 66,1 22,3
Southeast 16,9 43,2 25,9
South 17,1 32,3 20,7
Brazil 13,0 44,5 20,3

21. 20
Strategic and tactical impact scenarios
for the COVID-19 crisis and recovery

22. 21
Basic shock scenarios can be described as V-U-L-shaped
With some technical details
Classic economic shock leading to
an intertemporal displacement of
demand, resume orig. output path
Shock that breaks growth trend,
even as trend growth remains
same – typically financial
recession or major policy error
Shock that perpetually breaks a
part of the growth model. A
structural impact that shifts the
output path lower as well as
establishing a lower growth rate
V U L
Source: BCG Center for Macroeconomics analysis
Illustrative
Growth
Time periods Time periods Time periods
Loss in output
perpetuates
…growth overshoots
on rebound
…lost output during recession is
permanently lost, but no
perpetual loss
Levels
…and growth rate (same
slope)
Return to pre-shock
level (trend)…
…but at pre-shock
growth rate (slope)
Growth resumes at lower
level (trend)
…and at lower
growth rate (slope)
Growth resumes at lower
level (trend)…

23. 22
Empirically, flu shocks have all been V-shape
Historical precedents interesting, not deterministic
1957/58 H2N2
(116k deaths in U.S.)
1968 H3N2
(100k deaths in U.S.)
Source: U.S. Census, BEA, CDC, Census and Statistics Department (Hong Kong), BCG Center for Macroeconomics analysis
1918 Spanish Flu
(675k deaths in U.S.)
2003 SARS
(299 deaths in Hong Kong)
Levels
Growth
Hong-Kong GDP U.S. GDP U.S. GDP U.S. GDP

24. 23
What will be the present value of future
growth under COVID-19?
I.e. "geometry" of the shock: will it be a
V, U, or L shape and what does it imply
Will be basis for strategic response (capex
decisions, business model adjustments,…)
What will be the depth, speed, and
duration of COVID-19 shock?
I.e. "intensity" of the shock, a different
dimension from "geometry"
Will be basis for near-term response
(activity, output, staffing, suppliers, etc)
Strategic macro call Tactical call
Leaders forced to make two macro calls in COVID crisis

25. 24

26. 25
Assessing shock intensity: What you'd want to know
Insufficient testing and slowly unfolding mitigation efforts in U.S. make assessment challenging
Virus properties
(SARS-CoV-2)
Mitigation
Efforts
Policy
response
Microeconomic
reaction functions
and ability to
nudge them
Debated (perhaps 2 - 3.1)
Debated (varies by age: 0 – 18%)
Widely debated
Too early to say
Unknown
Drivers of shock
intensity
Contagion/Higher R0 rate
Mortality/Higher than assumed death rate
Virus resilience/Longer survival period
Weather/Risk of late spring/no seasonal eff.
Mutations/Risk of worse virus
Testing/too little testing
Social distancing/insufficient measures
Health care system capacity/breaking points
Fiscal policy/too little, too late
Monetary policy/policy ineffectiveness
Consumer confidence/fear takes hold
Firm reaction function/survival mode
Financial markets/liquidity driven sell off
Cash flow problems/going concerns fail
Leadership /public trust evaporates
Drivers/Risk Current risk profile (U.S.)
Source: BCG Center for Macroeconomics analysis
Far too little testing
Started will continue to intensify
Some systems already overwhelmed
On the right path with latest legislation
Rate cuts and large scale liquidity provision
Fear starting to take hold
Fear starting to take hold
Fin conditions tightened sharply
Risk is moving higher
Fragmented, lack of decisive leadership
Impact on intensity
• Even current profile of
virus has the potential for
highest shock intensity
• Risks describe further
downside(s), e.g.
mutation
• Mild shock intensity
consistent with strong and
successful mitigation
• Failed mitigation which
escalates in form and
length would drive up
shock intensity
• Severe shock intensity
would require dramatic
and sustained disruption
in confidence, financial
market, cash flows, and
poor leadership
Institutional capacity/struggling, fragmented Struggles in fragmented systems

27. 26
COVID-19 has potential for microeconomic legacy
SARS COVID-19 Future crisis?
2002-2003 SARS outbreak is
widely credited with
accelerating the adoption of
online shopping in China, and
specifically with Alibaba's
commercial inflection
Comprehensive broadband
rollout was a necessary but
insufficient pre-condition,
and SARS epidemic triggered
and accelerated the shift in
consumer behavior
What could be COVID-19
knock-on effects in terms of
technology adoption or new
processes?
• e-schooling and e-delivery
of learning materials?
(Think Japanese school
closures; some New York
schools have drawn up e-
learning capabilities)
• "Digital crowd control"
(smart phone-based
enforcement of Wuhan
quarantine enables
political will to permit
digital surveillance)
What current technologies
could mature by time future
epidemic hits?
• Automated/robotic
delivery? (taking "infected"
humans out of equation)
• Digital nursing assistants,
reducing humans' greater
liability as disease
transmitters
• Automated temperature
screening at public
transport nodes?
Source: BCG Center for Macroeconomics analysis

28. 27
How companies are responding

29. 28
BCG is surveying
companies globally
on 5 dimensions of
Covid-19 response
strategy
Current and prospective impact
Major pain-points for businesses
Health & safety measures taken
Business continuity measures taken
Long-term structural enhancements

30. 29
Most companies actively taking health & safety measures…
81%
58%
92%
28%
94%
51%
95%
86%
76%
61%
83%
85%
9%
18%
3%
16%
16%
9%
19%
17%
12%
10%
10%
25%
5%
56%
33%
5%
22%
5%
5%
Set-up a digital information hub for all the latest policies and information
Update office hygiene program and environmental cleaning procedures
Health & Safety Measures Taken
Modify sick leave policies (e.g. extra paid sick leave) to encourage precaution
Conduct regular health/temperature check for employees/visitors to office
5%
Communicate personal hygiene good-practices to employees
Provide masks, wipes etc. to employees at office
3%
Modify travel policies - restrict travel in and out of highly impacted regions
Modify travel policies – restrict travel more broadly, also in less impacted areas
5%
Introduce employee self-quarantine policy based on travel history/health status
Arrange flexible working plans and provide required infrastructure/solutions for enabling it
Restrict use of office for certain groups (e.g. visitors, non-critical personnel)
Cancel physical trainings or events that are not critical to the business or hold them digitally
Have Taken Plan to Take Not Planned
Travel
Employee
needs
Communications
Remote
Work
Themes
Source: BCG COVID-19 Company Survey; BCG Henderson Institute Analysis
Extract from benchmarking
survey (as of 13 Mar)

31. 30
…but fewer companies have taken business measures
across many dimensions
56%
50%
9%
23%
37%
36%
13%
37%
35%
21%
26%
17%
30%
37%
40%
43%
36%
32%
22%
24%
75%
47%
25%
24%
44%
28%
33%
Identify alternatives and contingencies for critical components, operations, and logistics routes
Set-up a COVID-19 rapid response team
Modify sales targets, production plans and related KPIs
Identify paths to grow new (less in-person) sales channels
Provide financial/non-financial support to value chain partners
Top-down scenario assessment, estimation of time point for a demand rebound
Plan to build supply chain readiness for a potential rebound
Change in marketing/communication plan given crisis and in anticipation of rebound
Leverage resources or co-ordinate with government/authorities to support community
Not Planned
Have Taken Plan to Take
Business
Tracking &
Forecasting
Supply Chain
Stabilization
Part of the
Broader Solution
Business Measures Taken
Sales &
Distribution
Themes
Source: BCG COVID-19 Company Survey; BCG Henderson Institute Analysis
Extract from benchmarking
survey (as of 13 Mar)

32. 31
In Brazil, several companies are taking measures to
ensure employees and business safety
Company Position
Multinational Consumer Goods Corporate on Home Office
Car manufacturer Corporate on Home Office
LPG Distributor Corporate on Home Office
Chemical Industry
Corporate mainly on Home Office; minimum required staff working on site. Mandatory Home
Office for risk group
Mining Corporate on Home Office
Retail bank 1 Corporate: Migration to Home Office in 2 weeks; Branches: business as usual
Retail bank 2
Corporate working on site, with some teams working remotely; Distancing measures; 1-week
quarantine to travelers returning from abroad
Clients on the countryside of SP & PR Corporate working on site
Oil & Gas Corporate 80% Home Office, including directors and managers.
Telecom operator
Corporate on Home Office: started with risk group, next everyone. One C-level on HQ per
day. No travel allowed.
Consumer goods (food) Corporate on Home Office in SP
, others in transition phase. Distribution:business as usual.
Steel manufacturer Corporate on Home Office. Plants and distribution under evaluation.

33. 32
Perspectives on leading through
the crisis

34. 33
How leaders can navigate the crisis
Protect your people,
ensure continuity, and
mitigate short-term losses
Pro-actively seize demand
rebound and bring business
back on track
Build advantage by making
strategic enhancements
and building resilience
Crisis Strategy:
Tackle immediate
priorities
Recovery Strategy:
Prepare for the
rebound
Post-crisis Strategy:
Pursue structural
enhancements
Overall Approach: Day-to-day agile approach to navigate changing environment
Read More

35. 34
Crisis strategy: BCG has developed a COVID-19 Rapid
Response Checklist
Execution clarity
Team health &
safety
Business strength
Financial resilience
Key response dimensions Action items
Use as a starting point for planning or a robustness check
against your existing plans

36. 35
Execution
clarity
Team health
& safety
Business
strength
Financial
resilience
Key items across
response work streams
How to navigate the
crisis
Now: Tackle
immediate
priorities
Near-term:
Prepare for the
rebound
Medium-term:
Pursue structural
enhancements
• Coordinate and scale response and planning adaptively
• Engage the organization
• Empower the team
• Lead with purpose & integrity
• Reduce risk of transmission
• Support those who are / may be infected
• Reduce stress and boost morale
• Ensure compliance with regulatory requirements
• Preserve topline and build trust with customers
• Reinforce ability to supply
• Adapt resources to meet business needs
• Monitor & respond to market and competitive dynamics
• Prepare for “bounce back” scenarios
• Manage cash and liquidity
• Ensure cost discipline
• Revise financial plan and perform scenario-based stress tests

37. 36
Preparing for a rebound: Activity
starting to pick back up in China
23-Feb
9-Feb
26-Jan
15,000
10,000
8-Mar
0
5,000
Daily number of new cases detected1
Greater China Rest of World
1. Excludes Greater China spike on 12 Feb driven by change in reporting methodology
Source: National Health Commission China (China-specific data), Johns Hopkins CSSE(Non-China Data),
BCG Henderson Institute analysis
"As of today, all of our
stores in Greater China
have reopened […] and
we will be closing all of
our retail stores outside
of Greater China."
—Tim Cook,
Apple CEO (13 Mar.)

38. 37
12 lessons from Chinese companies' experience
1
2
3
4
5
Look ahead and constantly reframe your
efforts
Use an adaptive, bottom-up approach to
complement top-down efforts
Proactively create clarity and security for
employees
Reallocate labor flexibly to different
activities
Shift your sales channel mix
Use social media to coordinate employees
and partners
Prepare for recovery to come faster than
you might expect
Expect different recovery speeds for
different sectors
Look for opportunity amid adversity
De-average the recovery strategy by
region
Rapidly innovate around new needs
Spot the new consumption habits being
formed in the crisis
6
7
8
9
10
11
12
Overall
approach
Crisis
strategy
Recovery
strategy
Post-crisis
strategy
Read More

39. 38
Students are taking the online P.E.
class at home
Deliverymen buy vegetable in the
supermarket and use contactless delivery
to customers
Source: online news, BCG analysis
• Medical, utilities, logistics, food supply were all required to operate at full capacity with price control
• Essential services boomed digitally:
– Medical consultation: HaoDaiFu (好大夫)served 1.68M ppl in 17days1 , daily registration went up 350%
– Grocery delivery: JD fresh delivery went up 226%2
– Education: top 6 education apps totaled 45M downloads3
Ensure life and
work continue
with DIGITAL tool
3
Chinese companies leveraged the power of digital

40. 39
Early signs of sector-level differences also emerging in US
-24
-11
-11
-8
-8
-7
-5
-3
1
1
5
6
7
9
Pharmacy
Transportation & rideshare
Health, fitness, beauty
Sector
Department stores
Entertainment
Travel
Apparel and accessories
Electronics retail
Restaurants
Home
Amazon (ex Whole Foods)
Grocers
Mass Retail
Online Grocery
-26
-12
-3
-2
-22
-3
-37
-4
-5
3
14
14
12
16
1. Seattle was one of earliest metros hit by outbreak | Source: Earnest Research credit card data as of 3/4/20; BCG MSP-Gamma-CCI analysis
U.S. Seattle1
% change in sales, last week of Feb vs. pre-crisis (Dec-Jan)
Expect different recovery speeds for
different sectors
8

41. 40
In São Paulo, Coronavirus is already impacting several retailers
Expect different recovery speeds for
different sectors
8
-77,2%
-13,9%
30,2%
19,2%
-7,5%
Source: Cielo | ICVA - Índice Cielo do Varejo Ampliado. Considers only physical channels sales.
From March 9th to March 15th, 2020 vs. March 11th to March 17th, 2019
Nominal Revenue Growth in São Paulo City
Total
Consumer
Pharmacies Supermarkets
Tourism and
Transportation
Others

42. 41
Economic impact differ will differ by sector; fashion/ luxury/ restaurant more
adversely impacted
Potential positive growth opportunities Likely to suffer negative impact
(esp. small/medium scale companies)
Hygiene
products
Consumer
health
eCommerce Packaged
food & bev.
Big-box
retailers
Fashion/luxury
retailers
Foodservice
/ QSR
Travel &
tourism
Increasing awareness and actions
on healthcare and hygiene, also
encouraged by government
Work-from-home creates demand for in-
home cooking/eating as well as eCom
work-from-home plus
minimized outdoor activities
reduces traffic significantly
Minimized outdoor activities plus
government control in gathering
and inter-city travelling
Expect different recovery speeds for
different sectors
8

43. 42
Post-crisis
strategy: How
might things be
different after
the outbreak?
Lessons learned:
• Crisis management?
• Scenario planning?
• Supply chain resilience?
Consumer shifts:
• Health & hygiene?
• Online purchasing?
• Communication behaviors?
New behaviors:
• Remote working?
• Distance learning?
• Reduced travel?
Unmet needs
• Health insurance categories?
• Collaboration platforms?
• Delivery models?
Read more

44. 43
BCG's resources

45. 44
BCG has sectoral
views on impact
of COVID-19
COVID-19 Impact on sector
(Ex: Transport & Logistics)
Get in touch with your BCG contact for sector-specific perspectives
Sample content from BCG's sectoral deep-dives
Possible future scenarios
(Ex: Automotive)
Recommended actions
(Ex: Energy)
Case studies from China
(Ex: FMCG)

46. 45
We can support you through this time of change & uncertainty
Rapid Response Room
Set up and run team to take control of overall
situation, incl. rapid assessment, contingency plans,
communication plans & execution, liquidity forecast
and management, spend rationalization
Commercial Response
Define and execute on optimization levers to mitigate
revenue impact / ensure rapid rebound, incl. digital/
eCommerce push, sales force activation, distribution
relationship mgmt, marketing, inventory planning
Global Coordination
Define and assess global response for multinational
groups, incl. scenario definition and stress testing by
geography, portfolio optimization, situation analysis,
communication strategies
Operations Continuity
Ensure business continuity and stabilize
operations/supply chain, incl. criticality assessment,
contingency planning, inventory recalibration,
alternative supplier sourcing

47. 46
Q A
&

48. 47
The situation surrounding COVID-19 is dynamic and rapidly evolving, on a daily basis. Although we have taken great care
prior to producing this presentation, it represents BCG’s view at a particular point in time. This presentation is not
intended to: (i) constitute medical or safety advice, nor be a substitute for the same; nor (ii) be seen as a formal
endorsement or recommendation of a particular response. As such you are advised to make your own assessment as to
the appropriate course of action to take, using this presentation as guidance. Please carefully consider local laws and
guidance in your area, particularly the most recent advice issued by your local (and national) health authorities, before
making any decision.

49. bcg.com

50. 49
Unused Slides

51. 50
Executive
summary
Dynamics: COVID-19 confirmed cases accelerating exponentially in several epicenters,
particularly Europe and North America in Brazil recent acceleration doubling every 3 days
▪ Reported cases growing steadily in US as many localities are taking increasingly strong
lockdown measures
▪ Continued acceleration in Italy and most European countries; many EU countries now
on lockdown (e.g. Italy, France, Spain, Germany)
▪ Some countries have slowed the outbreak with major interventions to enforce social
distancing or isolation: Trajectory has flattened in China and Korea
Dynamics Brazil: Initial reflections regarding Brazil readiness to deal with coronavirus
considering spread, critical cases and deaths
▪ Brazil has shown a growth path similar to European countries, with cases concentrated
in SP and RJ and stronger government reaction in SP
, with schools and stores closure
▪ Brazil with lower proportion of old people, cigarette consumers and higher availability
of ICU beads when compared to China and Italy
Economic impact scenarios: Business leaders are forced to make two macroeconomic calls:
The geometry of the shock (V-U-L growth paths), a critical strategic call; and the intensity
of the shock (depth, speed, duration), a tactical call
Company response survey: According to our survey of more than a hundred companies,
most companies have taken actions to protect employee health and safety, but fewer have
adopted measures to stabilize supply chains or modify forecasting and tracking.
Leadership perspectives: Leaders ultimately need to navigate the crisis on 3 fronts:
immediate crisis response priorities; preparing for the near-term; and pursuing structural
enhancements for the new post-crisis world

52. 51
Select
Examples:
Adaptive
approach to
crisis
management
Hotel Chain used information platform to
provide guidance to employees
Outperformed peers in hotels, restaurants and leisure industry by 7% in TSR
Use an adaptive, bottom-up approach
to complement top-down efforts
2
Huazhu, operating 6000 hotels across 400 cities in China, was severely
impacted by Coronavirus outbreak
Formed a crisis task force that met daily to review and update policies and
procedures including
Leveraged its own information app "Huatong" to provide timely guidance
and information to employees and franchisees
Allowed widely spread franchisees to adapt central guidance based on
their own particular situations

53. 52
Select
Examples:
Shift in sales
channel mix
Cosmetics company redeployed store-staff
to online channel to grow sales
Experienced an immediate sales uptick - Sales in Wuhan achieved 200%
growth compared to previous year
Shift your sales channel mix
5
Skincare brand Lin QingXuan had to close 40% of their stores at peak of
the crisis
Redeployed its 100+ beauty advisors from those stores to become online
influencers leveraging digital medium such as WeChat
Marketed via livestream sessions on Taobao live – Alibaba's livestream
platform

54. 53
China's rebound trajectories different across sectors
15
5
-10
10
-5
0
21-
Jan
TSR (indexed on base 21st Jan)
24-
Jan
4-
Mar
31-
Jan
7-
Feb
14-
Feb
21-
Feb
28-
Feb
Average TSR movement of Chinese industry groups
High Performing industries (+12%)
Others (0%)
Low Performing industries (-7%)
Software & services, Healthcare
equipment & services, Food &
staples retailing
Transportation, Consumer durables
and apparel, Utilities, Insurance,
Retailing, Energy
First 2 Weeks
Market decline
across industries
Note: Top 500 Greater China companies as of 1st Jan 2020 considered for analysis; High Performers comprise 6%, low performers comprise 21% and others comprise 73% of the 500
companies in the consideration set; Average TSR of the three clusters – High Performers, Low Performers and Others is the simple average of all TSR of all companies in the cluster
Source: Capital IQ; BCG Henderson Institute Analysis
Next 4-6 weeks
Differential paths
of recovery
Expect different recovery speeds for
different sectors
8

55. 54
Example actions by economic actors as virus spreads
Largely foreign concern Pockets of local infection
Widespread
domestic contagion
Consumers
• Intl travel plans canceled
• Preemptive stock-up
purchases of necessities
• Less discretionary spending
• Reduced domestic travel
• Public spaces avoided
• Online orders increased
• Invest. decisions paused
• Sharp reduction in
discretionary spending
• Large hit to incomes
• Increased defaults on loans,
mortgages
Businesses
• Crisis mgmt. triggered
• Travel restrictions
• Event cancellations
• Investment / hiring freezes
• Production reduced
• Supply chain adjusted
• Reduced output/capacity
• Balance sheet restructuring
• Losses absorbed on P&L
• Workforce streamlined
• Exit of weakest players
• Dividend/buyback cuts
• Substantial P&L impact
• 'Bare minimum' product &
service offering
• Widespread layoffs
• Multiple bankruptcies,
fire sale M&A deals
Government
• Travel restrictions
• Interest rates cuts
• National pandemic
preparedness efforts
• Local quarantines
• Fiscal stimulus
• Coordination of industry
activity
• Large quarantines
• Industry bail-outs
• Protect/direct flows of
essential goods
Not exhaustive
Expect different recovery speeds for
different sectors
8

56. 55
We have the footprint to support you in all impacted areas
Besides supporting private sector clients, we work across many cross-sector humanitarian emergencies and pandemics
90+ offices
across 50
countries
Strategy/coordination
and re-building
Japan Earthquake
(2013)
Re-building
Australia
Bushfire
(2019/20)
Immediate relief
support
Myanmar
Cyclone (2008)
Strategy/
coordination
Ebola (2014)
Rebuilding
Haiti
Earthquake
(2010)
Rebuilding
New Orleans
Hurricane
Katrina
(2005)
Rebuilding
9/11 NYC (2003)
Hurricane Sandy
NYC (2013)
Strategy/coordination
Refugee Crisis (2015-
2017)
Strategy/coordination
Syria Refugee Crisis
(2015-2017)
Immediate relief
and strategy
Nepal Earthquake (2015)
Pro-bono efforts Hubei
province, NGO support,
vaccine plan development
COVID-19 outbreak (2020)

57. 56
Key data sources
and references
BCG perspectives:
• Lead Your Business Through the Coronavirus Crisis
• What Coronavirus Could Mean for the Global Economy
• How Chinese Companies Have Responded to Coronavirus
• How Will Things Be Different When It's All Over?
• The Leader's Duty to Think Ahead and Beyond
• Detect, Develop, and Deliver: A Holistic Approach to
Managing Outbreaks
• Coronavirus Impact for the Luxury Industry
• The Global Auto Industry Responds to the Coronavirus
• Challenges and Opportunities for the Chinese Insurance
Industry during the COVID-19 Outbreak
Dashboards:
• Johns Hopkins CSSE COVID-19 tracker
• HealthMap visualization
Key data sources and references:
• China National Health Commission
• Global Health Security Index
• World Health Organization updates on coronavirus