The Impact of the COVID-19 Pandemic on Competition Between Firms

Subject: Management
Pages: 4
Words: 1220
Reading time:
5 min
Study level: College

How has the COVID-19 pandemic reshaped competition?

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As businesses and sectors prepare for life after the COVID-19 pandemic, one of the most difficult jobs will be determining a new set of objectives. Coping and keeping up with the ever-changing scenario have taken precedence during this crisis. However, as the hold of the virus slowly decreases, more and more firms move to the next stage of adapting their competition techniques to a new era. The key impact of the COVID-19 virus on the competition lies, perhaps, in highlighting some of the most notable issues and challenges that firms need to work around in the modern world.

Higher inflation has returned to the United States and the European Union, with commodity prices such as timber and steel volatile, boosting competitiveness in all forms. Organizations that build procurement nerve centers that bring together professionals in the supply chain, planning, finance, operations, and engineering are advised to strategy for both the short and long term (“COVID-19: Implications for business”, 2022). In the new post-pandemic world that relies more on online technology heavier than ever before, firms will need to consistently invest in R&D departments in order to stay ahead of the curve.

Additionally, the international crises facilitated by the pandemic have revealed a number of long-hidden international and geopolitical tensions and struggles for world influence. Boards should pay attention to strategic, big-picture topics in order to manage geopolitical risk. Companies must also consider their corporate narratives seriously and decide if they are global entities or whether links to a certain country or area are more essential. It can be argued that while emerging from the largest crisis in recent history, the firms that adapt best remain the most competitive.

Has changing competition helped some businesses and hurt others?

Both the type of industry a business is involved in, and the scale of its operations have had an effect on how the pandemic-induced changes in competition affected businesses. Overall, it is fair to conclude that small businesses were hit the hardest, while larger firms, able to facilitate effective delivery services, remained prosperous. The new approach in competition, as specified in the previous question, tested the firm’s resilience around the issues it had been facing beforehand. The more financially and organizationally stable businesses with greater numbers of staff were able to provide their service consistently and appear reliable to customers in times of crisis. Meanwhile, small businesses generally have a lower number of employees and worse cash liquidity ratios. That means that if some of these employees contracted COVID, a small family store would have to potentially shut down, while Walmart would not be affected.

The more companies hoped to charge higher than average prices for their products, the less likely they were to be successful under the new approach to competition. Since there has been a huge spike in the cost of numerous items, and customers are having difficulty obtaining such things, competition authorities are watching the price growth patterns during the epidemic (Li, 2022), often on a governmental level. Several competition authorities set up a separate mailboxes or other contact channels to handle complaints about entities attempting to profit from the epidemic.

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How has changing competition impacted the global supply chain?

The pandemic has revealed the vulnerability of supply networks based only on efficiency and cross-country arbitrage opportunities. Regardless of vaccinations, a focus on resilience is expected to spur the reorganization of corporations’ supply networks. Traditional channels of acquisitions and distributions have proven to not fit every potential major crisis a company can be faced, leading to firms considering alternatives even when the peak of the pandemic has passed. Many may anticipate corporations to pursue a multilocal sourcing strategy based on a regional footprint in the aftermath of the epidemic (Pisani, 2022). In the past, firms built their supply chains excessively for efficiency, resulting in single-source scenarios for frequently fairly minor items. This will change following COVID-19. With a new supply chain strategy, businesses rely on a greater series of smaller, more flexible manufacturing facilities and sourcing partners situated closer to end consumers.

This approach focuses on the home region, lowering the risk of enterprises operating beyond borders yet allowing them to profit from cross-border disparities. As a result of the expanding capacity to store and move data points throughout the world for insignificant cost, the main action will be in digital cross-border data flows. Firms may become more internationally linked sooner than business analysts believe, but in different ways than we anticipated before the epidemic. Since the outbreak of the epidemic, digital advancement has become even more crucial in fostering such interactions (Pisani, 2022). Supply chain digitalization increases its overall resilience and flexibility but also increases the already relatively high barriers to entry.

How has changing competition affected business buyers and individual consumers?

Firstly, it is important to recognize that many individual consumers and business buyers alike have faced serious financial constraints throughout the pandemic. They were less likely to buy items and services they did not classify as essential. As the virus has slowly changed the means the customers possessed, significant changes in consumer behavior occurred in terms of products, channels, and reasons. These shifts were shown to be connected to consumers’ perceptions of the crisis rather than its real consequences. Those who are likely to spend are either being benefited by the changes in the business landscape or are confident in their capacity to remain afloat throughout the rest of the COVID-19 crisis and its aftermath.

In relation to the changed competition, it is notable that consumers have become more attentive to the corporal social responsibility of the companies. As their values shifted due to the major stress of the global crisis, they have begun to put greater importance on firms’ policies in relation to COVID-19 and stopping the spread (Kennedy, 2022). The pandemic has significantly changed the priorities of many buyers, putting the spotlight on corporate social responsibility, online distribution channels, and resilient supply chains.

Is there a role for government to play, or will the market adjust by itself?

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The COVID-19 crisis requires every national government to make difficult decisions in order to safeguard its people and slow the spread of the virus. Unlike more usual interactions between states, the epidemic and public health crisis have forced nonstate entities to establish the terms and conditions of competition. The parameters that define competition over how successfully a state has responded were developed by media outlets, medical professionals, and public health specialists (Miller & Bilms, 2022). Such indicators have included the number of confirmed cases, the mortality rate, testing levels, and quantities of different personal protective equipment, all of which have contributed to assessing a state’s trustworthiness during the crisis. The image of a state’s resilience in the face of a catastrophe has become a type of currency for states that can be utilized later, politically or economically.

Due to this way, resilience against COVID-19 is evaluated and judged, and as well as the devastating effects the pandemic had on many people worldwide, some governmental regulation for the aftermath is arguably necessary. To avoid resource hoarding and unfair political lobbying, price ceilings and slow rates of extra benefit reduction are to be implemented. After all, a free market can only be possible under circumstances where its freedom does not sabotage itself.


COVID-19: Implications for business. (2022). Web.

Kennedy, S. (2022). Advancing U.S.-China Health Security Cooperation in an Era of Strategic Competition. Web.

Li, C. (2022). Worsening global digital divide as the US and China continue zero-sum competitions. Web.

Miller, C., & Bilms, K. (2022). A Pandemic and an Opportunity: Rethinking Competition during COVID-19 and Beyond – Modern War Institute. Web.

Pisani, N. (2022). How COVID-19 Will Change the Geography of Competition. Web.

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