doi:
10.58763/rc202332
Scientific
and Technological Research Article
Study
of success and failure cases of entrepreneurs as a result of COVID-19 in
Bucaramanga and its metropolitan area
Estudio de casos de éxito y fracaso de
emprendedores a raíz del COVID-19 en Bucaramanga y su área metropolitana
Martha Liliana Torres Barreto1
*
ABSTRACT
The
different impacts generated by the COVID-19 pandemic have left significant
challenges in global ventures. Both emerging and existing companies need to
adapt and reinvent themselves to overcome this environment's challenges and
opportunities. This exploratory qualitative research had as its target audience
enterprises between 0 and 5 years old registered with the Bucaramanga Chamber
of Commerce, which were affected by the COVID-19 pandemic. The research
development was carried out using the Case Study methodology based on the
experience reported by the entrepreneurs. Initially, a literature review and
Web analysis of the exposed theme were carried out. The existing
entrepreneurial environment in the Bucaramanga metropolitan area was
approached, through the characterization of the entrepreneurial scenario,
before and during the COVID-19 pandemic. The main challenges faced by
entrepreneurs and the strategies they used to adapt their businesses and survive
during the crisis were identified. Likewise, the adaptation potential of
entrepreneurs in the face of the COVID-19 pandemic was identified.
Keywords:
Organizational change, COVID-19, company, entrepreneurship, economic recession.
JEL classification: L26; M21
RESUMEN
Los diferentes impactos generados por la
pandemia del COVID-19, han dejado grandes
retos en los emprendimientos a nivel global. Tanto las empresas emergentes,
como las ya existentes, necesitan adaptarse y reinventarse para poder superar
los retos y oportunidades que este entorno presenta. Esta investigación
cualitativa de tipo exploratorio tuvo como público objetivo emprendimientos
entre 0 y 5 años de vida, registrados en la Cámara de Comercio de Bucaramanga,
que se vieron afectados por la pandemia por COVID-19. El desarrollo de la investigación se realizó mediante la
metodología Estudio de caso, basada en la experiencia contada por los
emprendedores. Inicialmente, se realizó una revisión de literatura y análisis Web
de la temática expuesta, y se acercó al entorno emprendedor existente en el
área metropolitana de Bucaramanga, mediante la caracterización del escenario de
los emprendedores, antes y durante la pandemia por COVID-19. Se identificaron los principales retos a los que se
enfrentaron los emprendedores y las estrategias que utilizaron para adaptar su
emprendimiento y lograr sobrevivir durante la crisis. Así mismo, se identificó
el potencial de adaptación de los emprendedores frente a la pandemia por COVID-19.
Palabras claves: Cambio organizacional, COVID-19, empresa, emprendimiento, recesión económica.
Clasificación
JEL: L26; M21
Received: 26-07-2022
Revised: 10-10-2022 Accepted: 15-12-2022
Published: 13-01-2023
Editor:
Carlos Alberto Gómez Cano, https://orcid.org/0000-0003-0425-7201
1Universidad
Industrial de Santander. Bucaramanga, Colombia.
Cite
as: Torres, M. (2023). Estudio de casos de éxito y
fracaso de emprendedores a raíz del COVID-19 en Bucaramanga y su área
metropolitana. Región Científica,
2(1), 202332. https://doi.org/10.58763/rc202332
INTRODUCTION
COVID-19 began in late 2019, with 27 cases of
pneumonia of unknown etiology in China's most populous city (Wuhan). The virus
spread rapidly until on March 11, 2020, it was declared a "pandemic"
by the World Health Organization (WHO), reaching 118,000 cases in more than 110
countries; as the days passed, the contagion had an exponential increase and
June 25 of that year there had already been 485,707 deaths and 9,566,268
confirmed cases (WHO, 2020), becoming an unprecedented health crisis.
The COVID-19 pandemic, in most of the small and
medium-sized enterprises (SMEs), has generated a variety of disruptive challenges
(Mora & Johnston, 2020). The crisis drives the need for new products and
services, opening a scenario of opportunity for entrepreneurs but negatively
impacting existing ventures (Neumeyer et al., 2020); its effect ranges from how
they serve their customers to supply chain sourcing. Entrepreneurs constantly
struggle for survival, and this crisis implies leaving behind the ideas
originally conceived in the business model to achieve more sustainable and
efficient growth; this adaptation is known as the "entrepreneurial
pivot" (Korsgaard et al., 2020).
In this context, this research seeks to evaluate
the adaptation potential of entrepreneurs in the city of Bucaramanga and its
metropolitan area through case studies that allow the identification of the
strategies that allowed them to survive or that led them to fail. In addition,
to identify the negative and positive impact unleashed by the pandemic
generated by COVID-19 on entrepreneurship, as was done in a recent research
that sought to evaluate the impact of COVID-19 on SMEs and employment
(Al-Fadly, 2020).
This document initially contains a literature
review developed from a search equation with which the most representative
information of studies on the impact of COVID-19 on entrepreneurship and the
most relevant strategies by entrepreneurs to address the crisis was obtained,
also allowing the elaboration of a theoretical framework in which the important
concepts to understand the development of the research are defined.
METHODS
This research is of a
qualitative-descriptive type, and was developed in four phases:
Entrepreneur
scenario
In this phase, with the help of
Web analysis and the Scopus and Web of Science databases, a search for articles
related to the project's objective was carried out to obtain information that
would allow defining the scenario of entrepreneurs due to the COVID-19
pandemic. For this purpose, keywords related to the research topic were defined
to generate a wide range of possibilities; the keywords were translated into
English, and synonyms were found with the help of the thesaurus tool (see Table
1).
Source: Own elaboration.
The most optimal search equation was obtained
through experimentation and the combination of keywords. In the process of
identifying the equation, it was found that the word "Impact" and its
synonyms deviated from the research results since they were directly related to
health, medicine, and environmental issues. For this reason, it was not taken
into account for the formulation. In addition, the results were filtered where
only research articles in English and Spanish were taken into account; the year
was also taken into account since the results published before the year 2020
did not generate any contribution to the research. This is how the search
equation was obtained:
TITLE-ABS-KEY (entrepreneur* OR administrator* OR
businessperson) AND (entrepreneurship* OR enterprise* OR "new
business") AND (COVID OR pandemic [OR sars*]) AND (LIMIT-TO [DOCTYPE,
"ar"]) AND (LIMIT-TO [PUBYEAR, 2020]) AND (LIMIT-TO (LANGUAGE,
"English") OR LIMIT-TO (LANGUAGE, ["Spanish"]).
From the review process, 11 articles were obtained
in the Web analysis, 61 results in Web of Science and 85 in Scopus. Of these,
articles with languages other than Spanish and English were excluded. The total
sum was 157 articles, but when crossing the results of the two databases it was
detected that the Scopus database contained all the Web of Science articles,
that is, they were duplicates. Finally, only the Scopus database was taken into
account for the development of the research, thus obtaining a total of 96
articles to review.
Strategies
and methodologies
In this phase, we sought to identify the
entrepreneurs' strategies to confront the COVID-19 pandemic through case
studies and literature reviews. For this purpose, the entrepreneurship between
the ages of 0 to 5 years, registered in the Chamber of Commerce of Bucaramanga,
were identified; the methodology that best suited for the case study was
selected; the cases under study were defined: qualitative and quantitative
tools were applied that allowed obtaining the information related to the
objective of the research, through the case studies. In this case, interviews
and surveys were conducted with enterprises in the Metropolitan Area of
Bucaramanga (AMB), which were divided into three groups:
-
Group 1. Companies registered with the
Chamber of Commerce from January 1, 2015, to December 31, 2019.
-
Group 2. Companies registered in 2020
in the Chamber of Commerce of Bucaramanga.
-
Group 3. Companies canceled in 2020,
which would have been registered between January 1, 2015 to December 31, 2019.
Subsequently, the information obtained was analyzed
and documented; the information was contrasted with the literature through the
case studies, and the strategies used by the entrepreneurs to confront the
COVID-19 pandemic were identified based on the literature and the case studies.
Impact
and adaptation potential
In this phase, the impact generated by the COVID-19
pandemic on the entrepreneurs was identified by contrasting the opportunities
and challenges with the strategies to identify whether the strategies used allowed
them to adapt or to fail. For this, through the information obtained from the
case studies and the literature review, challenges and opportunities generated
by the COVID-19 pandemic for the entrepreneurs were identified; a tool was
sought and selected to compare the strategies with the opportunities and
challenges; finally, the contrast was analyzed to identify the adaptation
potential of the entrepreneurs, through the strategies and methodologies they
used to face the challenges and opportunities.
RESULTS
Literature
review
Bibliometric
analysis
The documents obtained in the literature review
were analyzed using the Vosviewer application to evaluate the most outstanding
words or words used most frequently by the authors in the articles found.
Figure 1 shows a word map highlighting the terms: "COVID-19",
"Entrepreneurship," and "Entrepreneur," which cover all the
references required for the development of this research, in addition to
relating the words "China," "Spain," and "Italy,"
which represent the countries where the COVID-19 pandemic had the greatest
impact, presenting the highest number of deaths from this virus.
Literature analysis
Numerous studies focus on assessing the impact of
the COVID-19 pandemic on the business sector and the economy; undoubtedly, the
effects cannot be quantified at this time as the crisis is still ongoing.
Globally, the COVID-19 pandemic brought myriad changes, forcing companies to
reinvent their products, production processes, supply chains, and marketing to
survive or return to their regimes. On the other hand, it also brought business
opportunities, driving innovation in new products and services (Neumeyer et
al., 2020).
Drastic measures to prevent the spread of COVID-19 require
some that, in many cases, impede the normal functioning of society. These
include using face masks, social distancing, quarantine, and the definitive
blocking of all movement of goods (WHO, 2020). Consequently, many companies
have had to close or suspend their economic activity. In their research, Chanto
and Loáiciga (2021) examined the impact of these measures to understand
entrepreneurs' expectations during the crisis. They point out that up to 70% of
small companies stated that if the blockade continued, they would only have the
resources to operate for the next three months. A qualitative analysis was also
carried out in China, where it was identified that SMEs, particularly the
youngest ones, experienced the greatest negative impact. The research conducted
identified four phases through which companies have had to go through
companies see a collapsed demand with a cash drop received;
companies see a decrease in products and services needed as supply chains are
increasingly broken; companies were forced to stay open during the partial
blockade through new working conditions never experienced before, and there was
a significant reduction in the workforce.
The problem faced by SMEs due to the COVID-19
pandemic went from being a health crisis to an economic crisis, generating a
multidirectional effect in all sectors. Although some suffer more than others,
the level of affectation depended on whether the main sales channel was
face-to-face. The literature mentions lodging, tourism, and food service as the
most affected. There are also significant decreases in culture, recreation,
sports, and education; apparently, the only one that has been able to take advantage
of this is the health sector.
Based on the above and to evaluate how
entrepreneurs have tried to adapt to the COVID-19 pandemic, the literature
analysis has been divided into two parts: first, research articles were
selected whose main source of information came from interviews and experiences
told by the entrepreneurs themselves. The information was documented based on
the strategies, tools, and behaviors they identified to face the crisis. The
second part includes the other research found in the literature, excluding
those mentioned in the first part.
Entrepreneurs'
experience in the face of the crisis
The scenario that entrepreneurs faced after the
crisis tested their abilities to create strategies to adapt and not disappear.
Undoubtedly, no one was prepared to face an unprecedented crisis such as the
COVID-19 pandemic. To do so, entrepreneurs had to leave their comfort zone and
evolve.
Torres et al. (2022) studied the reaction of
companies in China to this crisis; their research evidences the first
strategies used, among them flexible human resources, product diversification,
market research, and improvement of education; in addition, it indicates that
small companies with more than five years in the market had more experience in
handling crises since they had a contingency plan.
In turn, Marks (2020), through a case study, shows
the scenario during the COVID-19 pandemic faced by entrepreneurs Meltz and
Duxbury, who initially had a successful swimsuit company and, due to the chaos
unleashed by the pandemic, were forced to redesign their business model; thus,
they began to deliver fruit and vegetables in boxes. What the author highlights
about this pair of entrepreneurs is that even with the low probability of
survival, they have identified opportunities amid the crisis; they were based
on detecting needs that were not being met and how, from their existing
resources, to create a new business model through the pivot. This consists of
leaving behind the ideas originally conceived in the business model to have
more sustainable and efficient growth to meet that need.
This same concept is joined by young Iranian
entrepreneurs who are startup creators, who mention, "We have to consider
a pivot at this stage as our market is becoming different," referring to
serving different markets that manage to capture new customers since, if we
keep insisting on the same ones, we will reach failure: "who knows how
long it would take, and if we insist on this market, we will be a loser [sic]
."These entrepreneurs affirm that the way to evolve is through new market
research and gaining access to international markets. Pivoting can only be
achieved if the entrepreneur possesses resilience, defined as the ability to
continue functioning, not only during a disruptive event but also during the
aftermath of the crisis.
In Finland, Björklund et al. (2020)
interviewed 66 food and beverage industry entrepreneurs. They showed the
options SMEs have experienced after the crisis and examined their response to
the consumer. From this exercise, 100% chose to experiment during the crisis
with new products, 45% experimented with services, 48% with sales channels, and
25% with prosocial actions. In order to reach their customers and continue
operating, entrepreneurs used digital and technological tools. Social networks,
websites, and applications such as Zoom and Teams facilitated internal and
external communication within the companies.
These cases reveal that many entrepreneurs had to
change their operating methods to generate new products and services to meet
new needs. In addition, another strategy that allowed them to survive was to
generate social impact. Fontrodona and Muller (2020) analyzed the impact of the
COVID-19 pandemic on SMEs from the social context. They identified that
companies have been concerned about generating and providing value to their
customers since the crisis. In sub-Saharan Africa, Uber redesigned its business
model after the crisis to generate a social impact on the community. Through
strategic alliances with the Bill and Melinda Gates Foundation, it delivered
medicines for chronic patients to their homes in the western Cape; the
medicines were aimed at patients who needed help to pick them up at hospitals
and pharmacies. In its new model, the safety and health of its customers were
paramount.
The crisis has concerned consumers about caring for
their health and the environment. Promoting social entrepreneurship projects to
provide innovative solutions to social and environmental problems gives
companies a competitive advantage.
From another source, Thorgren and Williams (2020)
show in their research how, from an event held through the Zoom platform, it
was possible to quickly identify and develop solutions to create social value
based on the needs generated by the crisis. The event lasted one week and was
held at the Kelley School, Indiana University, in the United States. Its
participants were entrepreneurs, coders, doctors, venture capitalists,
professionals, students, and professors worldwide. The event was well received
and brought together more than 200 people from 10 countries and five
continents. Brainstorming was used to capture the issues and solutions raised
by the participants; by the end of the week, they could develop 21 ideas in
five thematic areas: health needs, education, small business, community, and
procurement. Each of these ideas was aligned with seeking to improve people's
quality of life and mitigate the impact of COVID-19 in the communities.
Amid the crisis, it was not only important to look
for new markets or generate social value; the different health measures that
the crisis brought with it affected various areas of the companies. The supply
chain was the main one affected by the closures proposed by the government,
causing a shortage of resources necessary for the operation of companies; the
dependence that exists between one company and another to supply its supply
chain reduces the chances of survival since it generates a domino effect where,
if a company closes, the dependent company is directly affected; for this
reason, entrepreneurs have proposed co-creation strategies and local economies.
López et al. (2021) found, in their research work, how entrepreneurs are
changing their competitive mentality to a collective one in search of the
common good; they increased their portfolio of suppliers, going from foreign to
local in order to reduce the domino effect caused by the closing of borders and
the bankruptcy of one of their suppliers.
The content of Table 3 reflects the most
used strategies that the entrepreneurs relied on to face the COVID-19 pandemic
crisis, as well as the attitudes and aptitudes that an entrepreneur should have
to be able to face such a crisis, according to the literature review.
|
Table 3.
Strategies used by entrepreneurs to face the crisis. Attitudes
and aptitudes needed to face the crisis
|
|
|
Strategies
|
Attitudes and skills
|
|
Identifying
opportunity in the midst of crisis
Redesigning
the supply chain
Flexible
human resources
Seek
new communication channels
Develop
new market strategies
Redesign
the business model
Pivot
Education
Business
diversification
Generate
social value
Generate
customer confidence and trust
Design
sprint methodologies
Idea
bombing
Digital
innovation
Building
a virtual community
Social
media marketing
Organizational
resilience
Novel
value proposition
Product
bundling or rebranding
Online
services such as virtual tasting sessions
Expansion
based on internal capacity
Niche
market expansion
Identify
new business opportunities
Resource
management
Lower
transaction costs and advertise your products and services faster and cheaper
Access
international markets
Finding
suitable distribution channels
Conflict
management
|
Negotiating and commercial attitude
Ambition
Positive mental attitude
Creativity
Decisiveness
Social skills
Initiative
Planning
Tenacity
Visionary
Innovative
|
Source: Own elaboration.
Common factors discussed by the authors
The content addressed in this section was that
which was not clearly identified through the experiences of the entrepreneurs
but which are important factors to take into account in the crisis, within the
context of the literature. The aspects most mentioned by the different authors
are the following:
Entrepreneurial resilience. In the face of any crisis, one of the capabilities that an
entrepreneur must have is entrepreneurial resilience, an essential concept in
the management of business crises. Different studies on resilience in the
context of entrepreneurship and crises focus mainly on the period before the
crisis and the skills or resources entrepreneurs and organizations accumulate
to resist or adapt.
One of the causes affecting business resilience is
the dependence among companies to stock their supply chain. It is well known
that the effect caused by a global crisis generates resource shortages, and
interdependent companies are playing among themselves to stay afloat.
Consequently, when a company collapses, it triggers a domino effect in the
supply chain, generating, in turn, collateral damage among those who are part
of its ecosystem, such as suppliers and customers.
To mitigate this effect, it is necessary to work on
co-creation strategies that allow entrepreneurs to opt for a variety of
alternatives to supply their supply chain, where dependence on a single
supplier is not generated, but rather an emphasis from which the companies that
survive from globalization are not affected by the closing of borders and other
measures adopted in the face of the crisis, thus generating resilience in the
supply chain. This makes it possible to build local economies that work for the
common good to generate a more resilient ecosystem. The challenge for these
economies is to change the competitive mentality to transform it into a
collective one to strengthen each other to resist the threat of catastrophic
impacts better.
In addition to collective strategies, individual
strategies should be implemented to guide the entrepreneur toward resilience to
face crisis episodes. One of the proposals in the literature to respond to
exogenous shocks generated by the COVID-19 pandemic is to adopt a policy of
frugality, which requires keeping a long-term objective in mind. In very
practical terms, a frugal entrepreneur should behave as follows: sell or divest
all goods, services, or resources that do not contribute to primary income. Take
stock, organize, and prioritize goods, services, or resources that contribute
directly to income. Reduce short-term liabilities and renegotiate financial
expenses.
Opportunity in crisis.
The
crisis in the business environment acts as a coin that shows two sides; one of
them is the negative impact of entrepreneurship, stagnant growth, and even the
definitive closure of businesses; as for the other side - we must start from
the Chinese meaning fr "crisis" (危机, wēijī) which is formed by two words Wei (危 = crisis) and Ji (机 = opportunity) (Liu
et al.., 2020)-there are the entrepreneurs who detected an opportunity from the
crisis, which served them to reevaluate their business model or to create a new
one. Liu et al. (2020) found that entrepreneurs in countries such as China,
Korea, and Singapore while fighting the virus, took the time to rethink their
supply chains and make them more sustainable; they detected opportunities in
non-contact industries, including telecommunications solutions, online
education and remote support. They were thinking not only of the good of the
company but also of the community and its employees.
Surviving and adapting depend, in large part, on
how willing you are to innovate and not resist change. Organizations need to
adopt innovative and proactive behaviors to create value, obtain competitive
advantages and maintain pre-crisis performance levels. Einstein has a maxim
that says “In the midst of every crisis, there is a great opportunity”, thus,
literature shows the chaos and disappearance of many companies, but it also
shows how entrepreneurs cling to their dreams and passions to get ahead. Crises
or adverse situations can offer opportunities to grow and gain a competitive
advantage over competitors (Schumpeter, 1942). “A time of crisis can create
market opportunities that can be best addressed with innovative and proactive
stances” (Eggers, 2020, p. 25). Only those entrepreneurs who are capable of
interpreting their ecosystem and generating creative solutions can overcome the
crisis.
Innovation increases in times of crisis because it
intensifies experimentation, not only in expanding market niches but also in
adapting business models due to limitations and prohibitions. Thus, innovation
becomes the key that opens the door to opportunity; for example, in the
economic recession 2008, innovative companies were much more likely to resist.
It is important to emphasize that innovation refers not only to introducing new
products, services, and processes but also to exploring and exploiting existing
resources to obtain their maximum benefit (Escamilla-Fajardo et al., 2020).
Being at the forefront and not against change
allows the entrepreneur to understand the ecosystem he/she is facing more
quickly. The authors mention that entrepreneurs who understood the market
trends opted for tools to help them continue developing their economic
activities, seeking new alternatives to reach the customer. Digitalization,
startups, technology, and social networks are tools that have become the best
allies when creating strategies aimed at surviving or, at least, not
disappearing.
Financing. The crisis brings
risks and uncertainty that drive the entrepreneur to easily explore the
unknown, such as borrowing money and committing their resources to companies in
uncertain environments (Escamilla-Fajardo et al., 2020). Globally, there is
talk that 60% of SMEs are at risk of running out of cash reserves.
In
2020, we had at hand various forms of financing, such as banks, angel
investors, venture capitalists, and incubators. Additionally, there is a high
trend for crowdfunding, a way to compensate for the lack of physical
interaction or "mating" opportunities. Thus, with some investors,
equity crowdfunding platforms are created, and using online videos makes it
possible to attract investors' interest.
Although
entrepreneurs expect little help from the government, the authors note that
government policies should encourage entrepreneurship, strengthening
entrepreneurship and resilience worldwide. To that end, public officials have
rushed to introduce various economic stabilization measures to prevent millions
of small business failures and closures and boost recovery and rapid growth.
Some of the strategies that had a positive impact were designing a budget to
serve as financial leverage amid the crisis and facilitating online engagement
between entrepreneurs and investors through crowdfunding platforms and venues
promoting entrepreneurial ecosystems, such as Silicon Valley.
Case analysis
Main results of the cases studied
For group 1, corresponding to the companies
registered between the years 2015 and 2019, the impact generated by the
COVID-19 pandemic was negative in a large part of the companies, since many
were dedicated to the Wholesale and Retail Trade. The manufacturing industry
and the tourism sector were halted by the measures established by the
government for the management of the pandemic, since they were directly related
to the flow of people and products. As the survey results show, the vast
majority of the companies (67.6%) were negatively affected and, in general,
according to the interviews conducted, they all cited the reduction in sales as
the main negative effect that forced them to reduce their payrolls. For
example, COLOMBIANA DE SERVICIOS COMEDORES & SUMINISTROS S.A.S. said in the
interview that, due to the government's cease of activities, its sales were
reduced by 20% compared to the previous year, and there were problems with the
transportation of goods and the movement of personnel. What happened to this company
is described by Dublino (2020) in his research through the definition of the 4
phases that a company goes through in the crisis generated by pandemic; within
which are the fall of cash, the decrease of products and services due to the
breakage of supply chains, opening under conditions not experienced and the
reduction of the workforce. All the phases were, in general, those experienced
by the companies registered between 2015 and 2019, in the Chamber of Commerce
of Bucaramanga.
Along these lines, for Natha de Leche, Obleas
Postres y Dulces, one of the companies interviewed within the first group, the
biggest challenge was to function as a company that depended 100% on the
face-to-face public, since after the distancing they had no way to serve their
customers and, therefore, the first month of quarantine they sold practically
nothing, according to their own statements. This is evidenced in the literature
reviewed, where the problem of the pandemic crisis in SMEs jumped from the health
sector to other economic sectors, where those who suffer the most are those
enterprises in which their main sales channel was face-to-face, such as
accommodation, tourism or food service sectors. Within the results of the
survey of these group companies, 35.1% belong to the wholesale and retail
trade, most of which use face-to-face as a sales channel, hence the visibility
of the negative effects of the COVID-19 pandemic crisis.
To face this type of problems, companies developed
certain strategies to mitigate the damage to their economy, as is the case of
DISTRIBUIDORA NIKOSAN S.A.S., which initially implemented safety measures to
ensure the health of workers; each one had a complete kit, also used
teleworking to not saturate the offices. To deal with the distributors' fear of
going out on the street and getting sick, the company had to provide each of
them with psychological help and thus guarantee their overall safety; another
strategy was to analyze sales forecasts to make fair purchases from suppliers
and not have too much inventory that could affect them. Based on the results of
the survey, the main strategies used by the companies registered between 2015
and 2019 are presented, some of which were temporarily closed in compliance
with the sanitary measures of the health entities; some reduced staff and
others appealed to teleworking. The above was also evident in China where it
was observed that the first strategies used were also related to flexible human
resources, product diversification, market analysis and improvement in
education.
The variations in the market due to the conditions
generated by the pandemic brought business needs and/or opportunities; this was
an issue consulted in the survey, and it was reflected that the vast majority
(62.2%) found a business alternative, however, this alternative, in the cases
of companies registered between 2015 and 2019, occurred more as a necessity
than as an opportunity. For example, in the interview conducted with the
confectionery company Natha de Leche, Obleas Postres y Dulces, a representative
said that having no other sales channel than face-to-face they had to resort to
advertising experts in social networks to attract customers, which gave them
the opportunity to expand their commercial area and, according to the analysis
of that market, include birthday cakes in their product portfolio due to their
high demand. This phenomenon is presented in the literature as in the case of
entrepreneurs Meltz and Duxbury and their company Granadilla Swimwear who, due
to the stagnant conditions of the swimwear retail market, decided to enter the
food industry and use their brand and sales channels to promote Granadilla
Eats, dedicated to the sale of fruits and vegetables through social networks
(Marks, 2020).
A visible factor when going through the crisis was
digital innovation, reflected not only in teleworking but also in the customer
service and sales channels as a search for alternatives in the enterprises'
marketing. According to the survey results, many enterprises implemented social
networks as the main sales and customer service channel. This inclination was
also evident from the interviews. LARKEN SECURITY LTDA, a company dedicated to
private security activities, said that within their channels, they enabled
means such as social networks and the website to facilitate information access
to customers. In the literature, the authors mention that entrepreneurs who
understood the market trends opted for tools that would help them continue
developing their economic activities, seeking new alternatives to reach the
customer, such as using startups, digitization, technology, and social
networks.
All the previous results of the companies
registered between 2015 and 2019 in the Bucaramanga Chamber of Commerce lead us
to affirm that, in Santander, the companies stood out for their organizational
resilience when facing the pandemic crisis, since, despite complex conditions,
they managed to reinvent themselves and/or adapt to last over time. For
example, COLOMBIANA DE SERVICIOS COMEDORES & SUMINISTROS S.A.S. He said in
the interview that what led them to survive the crisis was to adapt and reinvent
themselves, having to do things that were not done before, entering sectors
different to what the company was dedicated to; In this case, they entered the
construction sector. According to the survey carried out, 8.1% of the startups
of registered companies, between 2015 and 2018, changed their business model
(those who stopped doing what they had been doing and opted for a new idea).
Although changing your business model is not the only way to deal with the
crisis, this depends on the need or opportunity. According to the literature,
studies on resilience in the context of entrepreneurship and crises are focused
on the period before said crises and on the skills or resources that
organizations have to resist or adapt.
As for the companies registered in 2020 in the
Chamber of Commerce of Bucaramanga, corresponding to group 2 of the analysis,
their main characteristic is that they have already been active in commerce,
either in the region or elsewhere. All these enterprises found an opportunity
to start a business in the pandemic or, by necessity, established themselves in
the Santander market. When the pandemic fell in the country, certain conditions
allowed them to develop as entrepreneurs. Some of these advantageous conditions
were the ease of procedures, reconsidering initiatives that had been inactive,
or the detection of an opportunity in the regional market. For example, Prada
Pinzón Jorge Omar, a trading company in the pharmaceutical industry for
animals, said in an interview that due to the pandemic crisis, he closed where
he was and moved to Bucaramanga. In the literature, Liu et al. (2020) found
that companies in China, Korea, and Singapore, while facing the virus, detected
opportunities in other non-contact industries.
Among the challenges assumed by the companies
recently registered in the Chamber of Commerce of Bucaramanga, one of the most
complex was that of companies that would work 100% face-to-face with their
clients. Power Up was one of these companies, which would be dedicated to
physical conditioning, but did not find a way to reach its clients with the
traditional way of working since it was impossible to make a personal and face-to-face
follow-up. Another challenge for the companies registered in 2020 was the
entrepreneur's mental capacity to open under the economic conditions of the
crisis since there was no guarantee to respond with lease obligations and to
sell their products or services. This could also be accompanied by an absence
of government subsidies for purchasing products or services, as in the case of
ISADEL S.A.S., a company dedicated to real estate activities.
It is possible to contrast these drawbacks of the
companies registered in 2020 with those assumed by the companies that have
already been operating since 2015, as they are similar. In both groups, similar
strategies are applied to develop the business exercise. In fact, according to
the interview, many entrepreneurs registered in 2020 applied similar tools when
opening their companies, such as the use of technology as a sales channel where
they have been able to sell and increase their customers, as was the case of
the marketing company Prada Pinzón Jorge Omar.
All these challenges for companies that wanted to
enter the regional market were addressed with strategies or economic support;
one of these strategies is the business co-creation to supply their supply
chain, where dependence on a single supplier is not generated and, thus,
companies are not affected by closures or measures taken by the crisis. This
strategy was imitated by the company Valorización de Residuos Agroindustriales
S.A.S. B.I.C., which partnered with Ecopetrol and could obtain business support
and thus restart its commercial work.
Among the strategies used by the companies
registered in 2020, education was also supported when facing the crisis. Many
companies opted to train themselves and their employees in labor management
amid the pandemic.
All these ways of starting up and enduring in the
market define the companies registered in 2020 in the Bucaramanga Chamber of
Commerce as resilient companies since they made use of all possible tools to be
part of the market, as in the case of Power Up, which focused on customer
acquisition campaigns, showing the benefits of being in shape and the
importance of taking care of health by creating new ways of reaching the
customer, without making use of the physical spaces of the gym, but
synchronously at each customer's home. Implementing all these individual
strategies will lead the entrepreneur towards resilience to face crisis
episodes.
As for group 3, characterized by the enterprises
canceled in 2020, all these companies were not prepared to face the crisis of
the COVID-19 pandemic and did not have elements -such as economic support from
family, friends, or their own- to survive and never applied strategies to
manage to stay in operation.
Since these companies never thought about digital
innovation and carried out their processes based on face-to-face activities,
when it came to training or errands, they failed because those who had to carry
out this procedure could not do it virtually. This led to the inability to pay
obligations such as leases and, finally, to liquidate the economic entity, as
happened with DCIN Inversiones S.A.S., to cite an example.
In other words, the companies that closed in 2020
did so because of inadequate or no planning. According to the interview, many
of these companies had been experiencing organizational problems since before
the COVID-19 pandemic. In contrast to the previous groups, these companies
needed the business resilience seen from the lack of attitudes and aptitudes to
face the crisis.
The above leads us to consider
Santander companies as organizationally resilient since, when analyzing the
three groups of enterprises, the vast majority faced the crisis and managed to
remain active in the business; even though most of them were not prepared to
face the crisis, they ended up converging in the same situations of resilient
companies presented in the cases in the literature, at a global level.
SWOT analysis
This tool allows a diagnosis to be made to evaluate
components of the sector and thus facilitate decision making and strategy
planning based on the identification of internal and external factors, given
its current situation and context. To identify strengths and weaknesses, the
case study of entrepreneurial companies in Bucaramanga and its metropolitan
area was taken as the unit of analysis. The results of the research carried out
from the questionnaires and interviews, and the literature review developed were
taken into account. Internal factors are considered as components that are
within the control of the companies in the region, and external factors are
considered as components that are not within their control, such as the
political, economic and social environment of the region.
It should be noted that these components are
presented in a very general way in an attempt to cover the main characteristics
of local enterprises, given their versatility and variety (see Figure 6).
Source: Own elaboration.
Note: the figure appears in its original language.
Offensive strategies (strengths opportunities)
In the design of offensive strategies, strengths
were evaluated to enhance the identified opportunities and obtain the maximum
benefit. The following are the offensive strategies proposed:
·
Prioritize digital channels as a
strategic axis of current and emerging businesses.
·
Strengthen the management of social
networks. Create and use informative spaces in social networks where people and
customers can receive information about the service or product provided, being
a way to expand the commercial space and increase customers.
·
Open windows and doors to new markets
in the environment, constantly checking new and better marketing alternatives.
·
Support the other regional sectors
seeking the reciprocal benefit of the organizations, leveraging supplies and
supply of raw materials.
·
Maintain biosecurity and safety
protocols for our customers and employees, seeking loyalty and commitment
towards the companies.
Survival Strategies (Weakness + Threat)
These strategies aimed to create a foundation to
withstand the adverse effects of the threats in the best possible way to
minimize the damage. At this point, the weaknesses were merged with the threats
to evaluate how to work on the weaknesses to minimize the effect of the
identified threats and eliminate the negative aspects or barriers encountered.
·
Train personnel in financial management
to provide solutions in this sector in critical times.
·
To have access to money to safeguard
internal payroll finances and manage economic lifelines with our banking
entities, reducing the economic risk of employees and enterprises.
·
To have transportation alternatives
that can guarantee the well-being of employees and the condition of raw
materials.
·
Re-evaluate different alternatives for
managing the supply chain, that is, by the adverse realities of the
environment.
·
Invest in education on different topics
associated with the company's environment, which will generate later
adaptability in adverse situations.
·
Construct alternative work models that
do not directly affect productivity and efficiency, respecting the existing
measures and norms of the pandemic.
Reorientation Strategies (Weakness + Opportunity)
This point raises some aspects that made it
possible to correct the weaknesses identified by taking advantage of an
opportunity and thus reorienting the internal situation of the companies to
exploit the opportunities in the best way possible.
·
Create a regional support network in
which different entrepreneurial companies from different sectors participate to
support- socially and economically- any company in the region (including the
creation of clusters, conglomerates, and associations).
·
Encourage state support for the most
affected sectors to reactivate the economy, which in the future will impact the
improvement of other economic sectors.
·
Pivot from business models with high
fixed costs and physical dependencies to more versatile and digital business
models.
·
It is vital to incorporate technologies
that better understand users, putting their experience at the center of
business activities.
Defensive Strategies (Strength + Threat)
Finally, regarding defensive strategies, the
strengths and threats identified are merged to evaluate how these strengths
were used to minimize or neutralize the threats.
·
Consolidate supply channels, ensuring a
constant flow of supplies and sufficient storage in times of shortage.
·
Migrate or modify key business
components to virtual or blended modalities.
·
Manage alternation in malleable and
flexible operations to non-habitual schedules, seeking to maintain
productivity, preserve pandemic measures and standards, and maintain occupancy
and number of employees.
·
By taking advantage of wholesale
clients, a part of this profit could be used to pay immediate debts that put
the company's finances at risk.
CONCLUSIONS
The research project developed serves as a starting
point for future projects that want to go deeper into this type of research,
relying on entities with greater business convening power, such as DANE and the
Bucaramanga Chamber of Commerce, ensuring a higher response rate from
entrepreneurs.
The supply chain was one of the main affected by
the measures imposed by the national government, which caused a shortage of
resources necessary for the operation of the companies. The dependence that
exists between one company and another to supply its supply chain, reduces the
chances of survival, as it generates a domino effect, whereby, if a company
closes, the dependent company is directly affected, for this reason,
entrepreneurs have proposed co-creation strategies and local economies.
After analyzing the results of the different
surveys and interviews in the three classification groups, it was found that
the companies in the Santander region stood out for their business resilience
during the crisis generated by the covid-19 pandemic. Although the sanitary
emergency has not yet been overcome, the economic effects in the country, and
specifically in Bucaramanga, continue to be evident; nevertheless, the analyzed
enterprises continue adapting to the quarantine conditions and social distancing,
transforming themselves according to the needs of the market, and innovating in
their processes; which allows them to expand their clients and their portfolio
of products or services.
Among the strategies most used by companies, the
implementation of technological means for the development of their operations
stands out, especially the one in charge of obtaining and retaining customers,
making use of communication channels such as social networks, which are in line
with the current era of technology, integrating all generations around these
technological devices.
Despite
the fact that entrepreneurs report a lack of government support, the
entrepreneurs who managed to survive did so by reinventing themselves,
optimizing their resources, identifying and applying strategies to obtain
market opportunities, expanding their clients and their portfolio of products
and services. In the midst of the crisis, Santander entrepreneurs believe in
their business project, in the importance of their company as a generator of
employment and, in this sense, they have made an effort to continue with their
company, because of the value it represents for them and for society.
According to the analysis, most of the companies in
the region were not prepared for the COVID-19 pandemic crisis, and many
survived thanks to the economic support of family, friends or their own, in
order not to collapse.
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FINANCING.
No external financing.
DECLARATION OF CONFLICT OF INTEREST.
The author declares that she has no conflict of
interest.
ACKNOWLEDGMENTS (ORIGINAL SPANISH VERSION).
La autora agradece a la Universidad Industrial de
Santander por el apoyo recibido.
AUTHORSHIP
CONTRIBUTION.
Conceptualization: Martha Liliana Torres Barreto.
Research: Martha Liliana Torres Barreto.
Methodology: Martha Liliana Torres Barreto.
Writing - original draft: Martha Liliana Torres Barreto.
Writing - revision and editing: Martha Liliana Torres Barreto.
