Denys Moskalenko

How small businesses are responding to COVID-19: a case study of Growfit

Metropolia University of Applied Sciences

Bachelor of Business Administration

International Business and Logistics

Bachelor’s Thesis

12.11.2020

Abstract

Author Title Number of Pages Date

Denys Moskalenko How small businesses are responding to COVID-19: a case study of Growfit 36 pages 12 November 2020

Degree Bachelor of Business Administration

Degree Programme International Business and Logistics

Instructor/Tutor Kevin McIntire, Senior Lecturer

The objective of this thesis, as the title indicates, is about analysing possible outcomes for small and medium enterprises after the pandemic outbreak. Also, to understand clear picture of the business environment during COVID-19. The case study conducted from a start-up Growfit. Growfit was founded in 2019. Growift provides healthy meal plans to their customers and started its operations during the quarantine. The aim of the thesis is to understand the optimal surviving strategy to SMEs during and after the pandemic outbreak. For a research author used a lot of statistics related to COVID-19 spread. In additional to that, the author applied his own personal experience working in Growfit. Also, “Blue Ocean Strategy” was applied to the case study and criticism of it. The results showed that the pandemic outbreak has a vital impact on both macroeconomics and SMEs. However, there are still a lot of opportunities, especially for SMEs during COVID-19.

Keywords Small and medium enterprises, COVID-19

Contents

1 Introduction 1

2 Detailed presentation of COVID-19 outbreak and responses to that by states 2

2.1 The pandemic outbreak in China 3 2.1.1 City lockdown and social distancing 3 2.1.2 Reports 4 2.1.3 New healthcare premises and stuff preparation 4 2.1.4 Monetary and fiscal policies 5

2.2 The pandemic outbreak in Finland 5 2.3 The pandemic outbreak in Russia 7 2.4 The pandemic outbreak in Sweden 9 2.5 Possible operating strategy to small and medium enterprises 11

3 Economic impact of pandemic 12

3.1 Secular stagnation 14 3.2 Inequality 14 3.3 Racial discrimination 15 3.4 Rising debt 15

3.4.1 Government debt 16 3.4.2 Corporate debt 16

4 Growfit Oy as a case study 18

4.1 Introduction to the case study 18 4.2 Uniqueness of the proposition 19 4.3 Canvas 19

4.3.1 Eliminate 20 4.3.2 Reduce 20 4.3.3 Raise 21 4.3.4 Create 22

4.4 Marketing strategy 22 4.4.1 First Facebook/Instagram campaigns 23 4.4.2 Opinion leaders 23 4.4.3 Give-away. Word of mouth 25

4.5 Critical analysis of the Blue Ocean Strategy 25

5 A post-pandemic survival and growth plan for Growfit Oy 26

5.1 Advantages of a small business 26 5.2 Growth plan for Growfit Oy 28

5.2.1 B2B model 28 5.2.2 Pricing 30 5.2.3 Cooperation with gyms and coaches 32 5.2.4 Mobile application development 32 5.2.5 Attract investments 33

6 Conclusion 33

References 35

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1 Introduction

The modern world faced difficult circumstances in 2020. COVID-19 pandemic triggered

many processes, that are related to economics and healthcare institutes.

People can plan many things; however, no one can be sure what the future can bring to

us. No doubt, that modern business should be ready for any changes. Small business is

more flexible in front of radical changes. During 2020, we can see many examples of

how big businesses also change their business lines and open new, before unknown for

them possibilities to build stronger and more successful companies.

At the end of 2019, the 31st of December, WHO’s Country Office in the People’s Republic

of China picked up a media statement by the Wuhan Municipal Health Commission from

their website on cases of ‘viral pneumonia’ in Wuhan, People’s Republic of China. We

can count it as a starting point of COVID-19. (Timeline of WHO’s response to COVID-

19. 2020)

COVID-19 is having a huge impact on business life and the economy overall. I am

interested in using COVID-19 subsequent outcomes as a threat for businesses and what

kind of solutions businesses can find. Also, what kind of opportunities the current

situation opens in front of enterprises.

Different government approaches are going to be described and analysed in this work.

The Chinese approach is going to be analysed as a starting point of the pandemic

outbreak. The Chinese government was taking significant restrictions to contain the virus

from spreading, also Finnish, Swedish, and Russian approaches are going to be studied,

as alternative approaches to the common problem. Governments’ regulations are

critically important to small and medium enterprises. On one hand it is common practice

for businesses to attract external investments to scale a busines, on the other hand

government restrictions, regarding maximum capacity of public places, directly affect

some businesses, such as restaurants, night clubs or local stores due to their income

depends on number of customers, that they have served.

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The pandemic outbreak has a significant impact on the world’s economy (Worldbank,

2020). The pandemic outbreak caused social and economic issues, such as secular

stagnation, inequality, and racial discrimination.

Growfit Oy is chosen to be a case study. Growfit Oy is a young Finnish company, that

provides unique service in the Finnish market – well-balanced meal plans to the door.

Growfit has different meal plans for different customers’ wants. The company sells all its

meal plans through the website: growfit.fi. Growfit is a mix of some common businesses

with a new look at it. Growfit is going to be analysed, as an example of a young business,

that is growing under tough circumstances. Growfit’s post-pandemic growth strategy is

going to be studied, to understand what is the optimal way, how to operate under

unpredictable occasions.

2 Detailed presentation of COVID-19 outbreak and responses to that by states

The pandemic outbreak has an extraordinary impact on our modern states. However,

different governments approach different methods to contain the spreading of the virus.

At the same time, there is an open question in front of a government’s leaders – dilemma.

How to stop spreading the virus with minimal losses in an economy. The global economy

is connected between different states. By analysing different approaches to combat the

pandemic by different states, we are going to be able to understand the pandemic

consequences to the global economy and particularly for certain states. First of all, China

is going to be analysed as the biggest economy in the World, and the beginning point of

the outbreak, second Finland is going to be taking under the examination due to the

government’s policy regarding restaurants and night clubs businesses, third Russian

example can show us monetary policy opportunities of the Russian government and the

decisions that were made by the Russian government, and last but not least an

alternative approach from the Swedish government with some restrictions, but still more

opened and liberal approach.

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2.1 The pandemic outbreak in China

China was the first country, that faced COVID-19 and its consequences (WHO, 2020). It

is important to remember, that China is a one-party government, that has been ruled by

authoritarian (Understanding China’s Political System, 2009). The outcome from been

ruled by one communist party is a lack of democracy. To remember this factor is

important to understand why many Chinese regulations were more successful than the

same regulations, that were made by European leaders.

Chinese government learned their lessons during the first pandemic outbreak – SARS.

The state was acting faster to prevent the virus from possibly spreading comparing to

the SARS situation. However, COVID-19 more developed virus comparing to SARS and

easier transmission from human-to-human (WHO, 2020). According to Wu and

McGoogan, the Chinese government informed about SARS only after 300 cases of

infected and 5 deaths, when if we are going to look at COVID-19, the state reported to

WHO about the pandemic when there were 27 cases of infected and 0 deaths (WHO,

2020).

The pandemic attacks both people’s lives and the state’s economy. By understanding

the fact, that the COVID-19 outbreak attacks from two different sides, states involve

different approaches both to contain the outbreak of the virus and to prevent the state’s

economy from collapse.

2.1.1 City lockdown and social distancing

China applied a quarantine method, and forbid people to move freely. The first

quarantine measures were accepted in the province Hubei, especially in the provincial

capital Wuhan, which was the pandemic beginning point (Implementation of quarantine

in China during the outbreak of COVID-19, 2020). The restrictions were applied to free

moving and leaving the province. Also, people who had permission to leave Hubei had

to be in quarantine after they have arrived at another city. Besides, the restrictions were

targeting to contain the pandemic spread, they harmed people’s health: emotional

disturbance, anger, anxiety, and insomnia (Brooks et al, 2020).

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2.1.2 Reports

Daily reports are another key measurement, that is focusing on containing virus

spreading. The doctor’s responsibility is to fill a report about new cases, that were

diagnosed or new deaths. The reports are going to China’s National Infectious Disease

Information system. All Chinese provinces are required to submit their reports daily.

When all information is gathered, it’s analysed to understand the transmission dynamics

and most dangerous areas in the country (WHO, 2020). Reports system is extremely

important for the appropriate decision-making process of the Chinese government.

2.1.3 New healthcare premises and stuff preparation

Lack of healthcare premises is a mutual threat for states around the world. Italy is a good

example of the not prepared healthcare system for the pandemic outbreak (Health Policy

Watch, 2020).

China had a SARS outbreak before COVID-19, therefore they were more prepared than

other countries. After 6 months when the SARS pandemic was first time announced,

China started to build new hospitals, that were targeting particularly SARS-infected

patients (Hospital Preparedness and SARS, 2004). Based on previous experience, the

Chinese government decided to react immediately with COVID-19. The decision to build

a new “Huoshenshan” hospital in Wuhan was made on 24 January 2020 and

construction was finished in 10 days since starting on 3 February 2020 (Global Times,

2020).

Huoshenshan hospital requires new healthcare teams, therefore the Chinese

government deployed more than 40 000 healthcare workers to combat the pandemic

outbreak in Wuhan (WHO, 2020).

China was applying fully the experience, that they got during the SARS pandemic. The

Chinese government was able to make fast decisions, which were so necessary to

contain virus spreading. At the same time, for many states, it’s impossible to apply the

Chinese approach, due to lack of finance and lack of preparedness for such emergency

cases, such as a pandemic outbreak.

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2.1.4 Monetary and fiscal policies

The Chinese government not only took actions to contain the virus from spreading but

also focused on “economic health.” The pandemic is bringing fatal losses for both

people’s lives and the economic situation of a country.

China reacted fast and made a tax reduction for its citizenships. The finance ministry cut

social insurance payments by 1 trillion RMB to motivate companies to keep their

employees. In big cities of China, companies that are struggling due to the pandemic

outbreak, and do not fire their employees, can get a refund of unemployment insurance

premiums.

Banks decreased loan rates for the companies or involved “holidays” from loan payments

to help businesses to survive the pandemic (KPMG, 2020).

2.2 The pandemic outbreak in Finland

Finland didn’t take so radical measurements as China did. The median age in Finland is

43.1 years and the population density is 18 per km2, therefore the pandemic is not as

dangerous as in China due to the population density or Italy due to median age

(Worldmeters, 2020).

Despite, that Finland applied some measures, however with a delay. For example, when

there was already a total number of confirmed cased 156, Helsinki and Uusimaa hospital

district (HUS), decided that it’s not necessary to test people who return to Finland for

COVID-19 (HUS, 2020), besides that according to THL, Finland became close to the

epidemic.

On 16 March 2020, the Finnish government decided to take measures by issuing a

decree on implementing the Emergency Power Act. It meant the following actions:

closing schools, a maximum of 10 people can take a part in a public meeting, outsiders

are forbidden from entering healthcare facilities and hospitals, starting the preparation

for the shutdown of borders, people who enter Finland will be placed under a 2-week

quarantine, and closing night clubs or restaurants, the places in which impossible to keep

social-distancing (Ministry of Social Affairs and Health, 2020).

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When the number of new cases started to decrease, the Finnish government decided to

lift some restrictions. On 1 June 2020, the maximum number of people, who were

allowed to meet was increased to 50, also public indoor places were opened (THL,

2020).

However, after the minimization of the restrictions, the number of new cases started to

increase again. The Finnish government announced the application, which is supposed

to gather information about new cases. The idea of the mobile application is to provide

information to the citizenships if they were contacting anyone who is infected (THL,

2020).

The Finnish government decided to apply restrictions on restaurants and bars again in

October, due to the continued growth of the number of new cases. The restrictions were

targeting opening hours and hours to sell alcohol (Finnish Institute for Health and

Welfare, 2020).

How we can see, the Finnish government applies more democratic restrictions

comparing to China. The state tries to build a strong social awareness with a mobile

application and try to combat the pandemic with minimum losses.

Also, Finland understands, that the impact of COVID-19 on business activity is

considerable. Enterprise Finland Talousapu counseling service offers help and advice to

businesses with financial issues. Also, they provide help regarding the decision-making

process during the pandemic outbreak (Ely Centre, 2020).

Business Finland also helps enterprises, particularly with valuable advice, restructure

loans, or direct investments. Business Finland understands the current situation and tries

to flexible to be able to help businesses to survive the pandemic. Also, Business Finland

announced about their grant program, that focuses on helping businesses develop

alternative business line or develop a new product under COVID-19 circumstances

(Business Finland, 2020).

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2.3 The pandemic outbreak in Russia

Russian spread of the virus was similar to the Chinese one, due to population density in

major cities, however, the Russian government's reaction to the pandemic was not so

urgent as the Chinese one. Russia also integrated the mobile application the same as

Finland, however, the goal of the application was different. Below, I am analysing the

differences in the Russian approach, and I am going to analyse “rainy days” funds (funds

that were saved by the Russian government for the emergency cases) and Sergei

Guriev’s opinion about Russian actions.

On 29 March 2020, Sergei Sobyanin (Russian politician, currently serving as the 3rd

Mayor of Moscow) signed the document, that applies quarantine restrictions (The

Russian Government, 2020). However, the restrictions were sterner than in Finland for

example. People could leave their apartments only for a few reasons: emergency health

problems, trips to work, buying groceries (only in the closest store to his/her apartment),

and walking out with pets. The free movement was forbidden. The Russian government

decided to apply modern technologies on the combat with COVID-19, however, in

contradistinction to the Finnish approach, where the application is targeting to develop

citizenships’ awareness about the virus spreading, the Russian application is targeting

to control the movement of citizenships and inform the government about the current

location of an individual. It calls “Moscow Social Monitoring”. The main function of the

application is to track an individual’s movement, also it divides citizenships into different

groups and informs each group about their timetables for leaving their apartments (MOS,

2020).

We can see the difference between Russian and Finnish approaches: the Russian way

is more focused on control and restrictions, when Finnish one is more liberal, however,

also applies restrictions in the urgent areas.

Sergei Guriev is the scientific director of Sciences Po’s Masters and Ph.D. programs in

economics. Also, he has serviced as the Chief Economist at the European Bank for

Reconstruction and Development (Sciences Po, 2020), and being a Rector at the New

Economic School in Moscow. Sergei Guriev is mostly interested in contract theory,

labour mobility, political economics, and economics of development and transition. His

works are published in the world’s refereed journals, such as American Economic

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Review, Journal of European Economic Association, and Journal of Economic

Perspectives.

I am interested in analysing his interview at the London Business School, where he was

explaining the concept of the “rainy-day” fund, particularly speaking about the Russian

one. The rainy-day fund, in other words, can be explained as a budget stabilization fund.

It is the state’s emergency money, that is saved for unpredictable situations (Briefing

Book, 2020).

In Sergei Guriev’s opinion, countries with a developing economy and countries with a

developed economy are very different in front of the crisis. Developing economies are

willing to combat the pandemic, however, they have a lack of free money for the battle.

In the Russian case, the government stashed away more than 550 billion dollars and has

a rainy-day fund worth 165 billion dollars (Bloomberg, 2020).

For the Russian economy, the pandemic outbreak is very dangerous, due to the main

export commodity of Russia is oil, however the oil demand fell due to global shut-down,

and for oil was even negative in April 2020. For companies were unprofitable to store the

oil without the possibility to sell it (Ig, 2020).

Sergei Guriev was analysing Russian monetary and fiscal policies. In his opinion, Russia

was handling really good monetary questions during the pandemic, because Russian

moved to a flexible exchange rate system in 2014, since that Russia does inflation

targeting (Bank of Russia, 2020). “Monetary policy was performed according to the

macroeconomics textbook” – Sergei Guriev said during his interview with London

Business School. However, Sergei disagrees with the Russian government strategy

about fiscal policy. He believes that Russia should be more generous and start to use

the rainy-day fund, Sergei thinks, that Russia should spend around 10% of GDP for

supports its citizenships. So far, Russian spends only 2% of GDP, and half of that money

is not giving, but postponing tax payments (Bloomberg, 2020).

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2.4 The pandemic outbreak in Sweden

I am interested in examining the Swedish approach because it has the most differences

comparing to other countries. How I have analysed above: Chinese, Russian and Finnish

approaches besides their differences, have a lot of similarities as well. In all examples,

that I have mentioned, were applying governments’ restrictions. The most common

measure is a general lockdown.

In an article, in the Swedish daily newspaper, Dagens Nyheter on 1 August 2020, Junung

and Nergelius provided their opinion about actions that were made by the Swedish

government. In their opinion, the main reason to avoid general lockdown was that since

1974, the Sweden constitution stimulated the freedom of movement: “Everyone shall be

protected in their relations with the public institutions against deprivations of personal

liberty. All Swedish citizens shall also in other respects be guaranteed freedom of

movement within the Realm and freedom to depart the Realm.” (Constitution of Sweden,

Art.9, p. 83).

At the same time, the Swedish Infectious Diseases Act can restrict individuals, however,

it cannot decide a general lockdown, therefore all Sweden measures were no

restrictions, but more voluntary suggestions and recommendations. Those two reasons

were the main two factors of the future Swedish decisions related to the pandemic (Jonas

F. Ludvigsson, 2020).

Due to Sweden didn’t have a general lockdown, there were not two waves of the COVID-

19. Figure 1 shows daily new cases in Sweden from the 15th of February to the 12th of

October.

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Figure 1. Daily new Cases in Sweden (Worldmeters.info 2020)

However, if we are going to speak about other countries, then the second wave of the

pandemic is a big threat to them. How I have mentioned above, Finland involved the

second wave of the restrictions, and the main reason for that was the second wave of

new cases. Figure 2 well illustrates the meaning of the second wave. How we can see,

after lifting the restrictions, Finland faces more new cases comparing to the first wave.

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Figure 2. Daily New Cases in Finland (Worldmeters.info 2020)

Sweden chose an alternative way to combat the virus, instead of lockdown, the Swedish

government decided to build a deep awareness about the pandemic and rely on citizens’

understanding of the problem which humanity faces (Government Offices of Sweden,

2020). It is hard to make any conclusions right now, which country performed better in

combating the pandemic outbreak, due to it is not over yet, however, we can see how

different approaches for the global problem were applied. All four countries, that I have

analysed above have a common thing is cooperation, nowadays all countries should

work together to fight the virus (Dr. Poonam Khetrapal Singh, 2020).

2.5 Possible operating strategy to small and medium enterprises

How it was mentioned above, different states apply, at some points, contrasting

strategies during the pandemic. However, there is one similarity almost between all

states’ approaches – financial support for businesses. We can see different ways of how

government supports its citizens. Finnish organization Business Finland provides grants

to its customers for a new product development and a business line (Business Finland,

2020). At the same time, Chinese government reduced loan interest to businesses

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(KPMG, 2020). We can see, how governments stimulate businesses to discover new

ways of operations and try to help them with financial support.

As a good example for small businesses can be Daniel Oghbasilasie’s company. Daniel

is my friend and a young Finnish entrepreneur. Daniel has two companies: taxi company

and translating company. I am interested in analysing his translating company, because

it has got grant from Business Finland, and can be a good illustration of how small

business, with a government financial support, survives and even grows during the

pandemic outbreak. The company name is CityTulkki, and it was found on 16 of July

2019 (The business information System, 2020).

The company was operating the same way, how many others translating companies:

was translating documents or arranging face to face meetings, when it’s necessary.

During the pandemic some offices were closed to visit and only email or phone

communication were available. Regarding the phone communication Daniel decided to

develop a new product. Daniel decided to develop an application for mobile phones. The

goal of the application is to serve their customers by phone. A customer can choose a

language, that he needs from the service and either speak directly with a translator or

pass the phone to a person who should understand him or her. The application is not

ready yet, however it’s a great example of a young business, that uses government’s

support during the pandemic, at the same time develops a new product based on the

pandemic circumstances.

3 Economic impact of pandemic

The economic impact directly affects both big enterprises and small companies.

Uncertainness, that is growing due to the pandemic and governments regulations, that

are taken due to contain the virus, can cause secular stagnation (see 3.1), and the factor

of secular stagnation should be taking under consideration when businesses build their

strategy. The secular stagnation is only one example, but definitely not the last, how

economic directly affects businesses particularly and each individual overall. This is the

reason, why the economic impact of the pandemic should be taken under the

consideration and has to be analyzed.

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Not only did the health crisis trigger the loss of a tragically significant number of human

lives, but it also dealt a heavy blow to market trust and economic growth. The magnitude

and speed of contraction in economic activity that followed were unlike anything

experienced in our lifetime. Rising fears and a global economic shutdown caused

financial markets to seize up and plummet. Globally, stock markets crashed from their

record highs and reported their largest one-week declines since the 2008 global financial

crisis (GFC). Oil prices in the US turned negative for the first time on record after oil

producers ran out of space to store the oversupply of crude left by the coronavirus crisis

and after the failure of negotiations between Saudi Arabia and Russia to try to curtail

production, triggering a historic market collapse, which left oil traders reeling. (Bloomberg

Opinion. 2020.) The price of US crude oil crashed from US$18 a barrel to –US$38 in a

matter of hours, as rising stockpiles of crude threatened to overwhelm storage facilities

and forced oil producers to pay buyers to take the barrels they could not store. The

market crash underlined the impact of the coronavirus outbreak on oil demand as the

global economy slumped.

The International Monetary Fund (IMF) called the economic crisis sparked by COVID-19

the Great Lockdown and projected that global growth in 2020 would fall to -3 percent, on

the assumption that the pandemic and the required containment peaks in the second

quarter for most countries in the world and would recede in the second half of this year.

It is a downgrade of 6.3 percentage points from January 2020, a major revision over a

very short period. It makes the Great Lockdown the worst recession since the Great

Depression, and far worse than the GFC, in which global growth fell by –0.1 percent year

on year. This is a truly global crisis as no country is spared. For the first time since the

Great Depression, both advanced economies and emerging market and developing

economies are in a recession. This year, growth in advanced economies is projected at

–6.1 percent; emerging market and developing economies with normal growth levels well

above advanced economies are also projected to have negative growth rates of –1.0

percent in 2020, and –2.2 percent if China is excluded. The income per capita is

projected to shrink for over 170 countries (IMF, 2020).

Additional challenges were faced by emerging markets and developing economies, with

unprecedented reversals in capital flows as global risk appetite deteriorated while dealing

with weakened health systems and a more restricted fiscal ability to provide support

(IMF, 2020). Market capital inflows declined as a response to the risk, that is appeared

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due to the pandemic situation. The outflow of market bond funds was more than 3

percent of total assets (Davis, 2020). It is an extraordinary case in the global economy,

only in October 2008 was something similar – 3.7 percent, when it was a global financial

crisis (Felton, Andrew; Reinhart, Carmen M. 2008).

The COVID-19 pandemic appeared, when it was not a stable situation in the world’s

economy. A good example of the unstable situation can be the “oil war” between Russia

and Saudi Arabia, which caused a dramatic reduction of oil prices on the worlds’ markets

(Steven A. Cook 2020). To understand the pandemic impact on the world economy

without understanding the whole unstable situation – is impossible.

3.1 Secular stagnation

The term “secular stagnation” was innovated by Alvin Hansen during the Great

depression. The term “secular” in simple words means “long term.” The COVID-19

pandemic may cause secular stagnation due to the uncertain situation in the world

economy.

Uncertainty has grown because of the pandemic when consumer and business

confidence has fallen dramatically. Businesses and customers started to evaluate risks

more carefully and decide to save instead of spend during and after the pandemic

(Byomakesh Debata, Pooja Patnaik, Abhisek Mishra 2020). It can affect both

consumption and investment factors, therefore decreasing demand. It can continuously

happen, similar to the domino principle, and hardly slow down with common government

methods, such as monetary and fiscal ones.

3.2 Inequality

Global inequality is used to be and still a threat to developed states. Many governments

before the pandemic were trying to minimize inequality by using different methods: low-

interest loans, social benefits, and progressive income taxes (Norwich University, 2020).

To contain the spread of the COVID-19, global governments shut down or at least slow

down almost all economic activities. It caused a powerful hit to economies. As one of the

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tools to slow down the spreading of the COVID-19 was chosen social distancing. Modern

technologies even before the pandemic were replacing human labour, for example, self-

service cash desks in new shopping centres (IFS, 2020). Social distancing means

minimizing personal contacts, therefore accelerating the usage of technologies instead

of humans.

At the same time, some of working positions that can be easily replaced by technologies

are not highly paid for example some of retail workers or couriers, it means the probability

of the absence of savings. Overall, due to slow down all economics processes, the need

for many employees disappear. Entrepreneurs are looking to minimization their

expenses, therefore often cut their employees, as a good example for this practice – can

Finnair (FlightGlobal, 2020).

The combination of the factors which were mentioned above can be a reason for the

dramatic growth of the inequality inside states and global overall.

3.3 Racial discrimination

The racial discrimination and xenophobic attacks are naturally big threats to modern

society. After the pandemic outbreak, the cases of racism increased around the world,

for example in India. Mongoloid appearances people were quarantined despite any

COVID-19 symptoms, just regarding their looks. At the same time, there were cases of

denied entry into their apartment complexes or forced to leave their apartments. Racial

discrimination cases are disgusting in the short-term and even dangerous to our modern

global economy in the long-term (Karmarkar, 2020).

3.4 Rising debt

Both government and corporate debts are going to be analysed and governments’

actions regarding them.

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3.4.1 Government debt

During the pandemic outbreak, analytics notice an increasing wave of global debt (IMF,

2020). The IMF, the World Bank, and other financial institutes acted without doubts and

increased financial support to countries who are in need, due to governments’ revenues

collapsed.

However, growing waves of debts are not new for modern economies, but they are still

dangerous. There were 4 main debts waves since 1970: the first waves were the reason

for the Latin American debt crisis of the 1980s (Jocelyn Sims, Federal Reserve Bank of

Chicago and Jessie Romero, Federal Reserve Bank of Richmond, 2013), the Asian

financial crisis of the 1990s (The Asian financial crisis, 1999), the Great Financial Crisis

of 2007-2009 (The Global Financial Crisis: Causes and Consequences, 2010), and the

debt, that started at 2010 and reached 188 trillion dollars (IMF, 2020).

The pandemic shutdown forced international financial institutions to increase global debt

to save the economy and working positions, however, it causes future fragility of the

global economy.

3.4.2 Corporate debt

We can see, how the pandemic affects government debts, but we cannot forget about

corporate debts as well. The pandemic outbreak affects many different businesses, from

small companies to big enterprises. To make research more particular, I am going to

focus on small and medium enterprises (SMEs) in Finland.

The pandemic lockdown is a threat to many businesses, for some businesses it can

totally block operations, night clubs’ example, that was mentioned above, is exactly the

case, when the lock down means impossibility to operate. Finnish government

understands that SMEs deal with a financial crisis and need additional financial support.

How you can see at Figure 3, banks are the biggest source of funding for SMEs.

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Figure 3. SMEs’ sources of funding (Federation of Finnish enterprises, SME Barometer

Spring 2020)

Finnish government perfectly understands possible consequences of lack of investments

and revenues for SMEs – bankruptcy. Companies bankruptcy is a big threat to the

government’s economy, due to that fact, it increased unemployment level (Bank of

Finland, 2020). To prevent the factor of unemployment growth and help SMEs

successfully survive the pandemic outbreak, banks take measures. Figure 4 shows us

cases, when banks were making allowances in repayment arrangements.

Figure 4. Allowances in repayment arrangements (Bank of Finland and Ministry of

Finance, 2020)

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How we can see on Figure 4, banks fully understand the current conditions and take not

the last part on solving economics issues related them. At the same time, it really

important to provide good financial conditions to the banks as well, therefore in response

to the pandemic, the European Central bank eased its monetary policy to maintain price

stability and support economic growth and employment (Bank of Finland Bulletin, 2020).

4 Growfit Oy as a case study

4.1 Introduction to the case study

A case study has several definitions: that its method is qualitative, small-N (Yin 1994);

that the research is ethnographic, clinical, participant-observation, or otherwise “in the

field” (Yin 1994); that the research is characterized by process-tracing (George and

Bennett 2004); that the research investigates the properties of a single case (Campbell

and Stanley 1963, 7; Eckstein [1975] 1992); or that the research investigates a single

phenomenon, instance, or example.

In my thesis, I am examining “Growfit Oy” as an example of a start-up, that was built and

that is developing right now under a pandemic situation. Growfit Oy was found on the

30th of April 2019; however, the first sale was made on the 29th of March 2020. Before

that, Growfit’s team built the website and solved legal aspects related to the restaurant

business field. We can count the first sale as a starting day of the company in the Finnish

market. Hence, Growfit started its operations during the pandemic and could develop its

sales from 31.50 euros in March to 13 000 euros in August without any external

investments or loans.

Growfit is a unique player in the Finnish market of food industries. Instead of competing

in a tough segment between restaurants, Growfit decided to fulfil a niche market, that

was not discovered before – healthy food deliveries to customers’ doors. Growfit’s

customers can go to the website and choose a meal plan that fits their goals. From losing

weight to gaining muscles, or just to eat healthily and save time that was spent on buying

groceries, cooking, and washing dishes. Therefore, Growfit is not competing with

restaurants on a design or not competing with food delivery companies on the price of

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the delivery; however, Growfit “serves” cardinally different values to their customers and

targeting a different audience.

4.2 Uniqueness of the proposition

How it was mentioned above, Growfit offers new value to their customers. Let’s examine

step by step how the business model was built and the main question - why it was built

particularly this way.

To better understanding the Growfit team’s motives, I am interested in comparing it to

“Blue ocean strategy” book by W.Chan Kim and Renee Mauborgne, because the concept

that described in the book is similar to Growfit’s philosophy:

“Value innovation is the cornerstone of blue ocean strategy. We call it value innovation

because instead of focusing on beating the competition, you focus on making the

competition irrelevant by creating a leap in value for buyers and your company, thereby

opening up new and uncontested market space. Value innovation places equal emphasis

on value.”

Growfit does all sales operations through its website (growfit.fi), however, it was not an

option – it was a solution for them. Growfit had an understanding, that they are not

going to be able to compete against big market players, at the same time it’s going to

be impossible to handle all rent expenses without external investments or loans.

Therefore, the website was chosen as a sales platform and social networks were

chosen as a discussing platform with their customers.

4.3 Canvas

How I have mentioned above, Growfit was built in a tough environment with a limited

budget. Therefore, before starting, Growfit’s team had to carefully think about the

entrance strategy to the Finnish market and try to minimize risks. “Blue ocean strategy”

had a big impact on Growfit’s decision making processes. I am interested in applying the

“Blue ocean strategy” canvas on the Growfit’s business model particularly. Let’s start

with Eliminate-Reduce-Raise-Create.

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4.3.1 Eliminate

W.Chan Kim and Renee Mauborgne by “eliminate” sector mean to understand which

values of the product are not necessary, however, cost a lot for business. As an example,

authors provide Cirque du Soleil. Animals were always part of the circus industry. Cirque

du Soleil decided to eliminate animals from their show, therefore cut a big part of their

expenses. The circus started to target a different audience group (adults), therefore they

decided to offer new values for their customers: a combination of theatre and circus.

Instead of showing one performance after another one, which is not connected, like in

regular circuses, they started to provide one lasting performance with one single plot.

We can see, by eliminating costly parts of the circus, that was always there, Cirque du

Soleil could reduce their expenses, at the same time started to provide a different value.

(Norma M. Rantisi; Deborah Leslie. 2015)

Let’s analyse Growfit’s case now. Restaurants always compete with each other among

different criteriums: design, menu, delivery time, atmosphere, location. If we going to

take only one criterion, for example, location, it can be very costly for a young business.

Growfit decided to sell through the website and keep the only kitchen for their production.

The premise for the kitchen was easier to find and cheaper because a good location is

not important anymore. To create a good-looking website is way cheaper than making a

good design for a restaurant.

4.3.2 Reduce

In this step, the authors suggest reducing expenses, which still cost for businesses a lot,

however, there is no big need in the market for this additional service or feature. As an

example, authors provide the Nintendo Wii, where they reduce the graphic processing

power well below the other products on the market because, for their target market

(children and the elderly), top-notch graphics are not important to the satisfaction level

of gameplay. Below average graphic processing with caricature images is much more

appealing to that target.

Growfit understands that for their target audience (full-time employees, athletes, people

who want to lose weight) the taste of the meals are not so important. However, a healthy

meal plan, that can help forget about cooking and save plenty of time is essential. Hence,

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Growfit doesn’t need to use expensive ingredients to surprise its customers, because

their clients pay for service, that can feed them during the whole week instead of giving

euphoria for the short term.

Also, one of the main principles of Growfit’s business model is using a pull strategy. The

company gets all orders in advance; therefore, they know in the advanced exact amount

of necessary raw materials and the amount of necessary labour. It helps to keep an

efficient cooking process. There are no unused ingredients, that many restaurants have

it as a big expense or not enough employees, too many employees at cooking day. By

applying a pull strategy, that is impossible in an “ordinary” restaurant, Growfit can keep

the process as efficient as possible and avoid all unexpected expenses.

4.3.3 Raise

In this step, the book suggests that you want to lift variables far above the industry

norms to eliminate compromises that compel consumers to make established choices.

Apple is a perfect example of this, because with the iPod if you wanted to take it on the

go, it made it easy to get all your music on your computer and transfer it quickly to your

iPod.

Let’s analyse, how it was applied at Growfit particularly. Due to Growfit doesn’t have a

“selling” location, reasons for it described above, delivery plays an important part in the

business model. However, delivery is usually related to opening hours for regular

restaurants. Opening hours is a first issue, which doesn’t exist at the Growfit model.

Because customers are buying a subscription for a particular period. At the same time,

due to Growfit cooks all meals in advance (1 day before the delivery day), exact delivery

time, discussing with a customer. When the delivery day is coming, Growfit has already

all the exact delivery times for each client. Growfit provides 15 minutes window for the

delivery, for example, a customer gets a text message which says, “Dear Mikko, we are

going to deliver your meals from 07:00 to 07:15 tomorrow morning.” It has several

advantages for both customers and Growfit at the same time. Customers know the exact

delivery time and they get their orders early morning; therefore, they don’t need to cook

anything starting from the first delivery. Also, the possibility to get your meals at the exact

time gives you the possibility to build your schedule.

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Growfit is also in a winning position because instead of serving one client per delivery,

Growfit can arrange delivery for all clients at the same time. It saves a lot of money in

the long run. At the same time, early delivery is preferable for both Growfit’s clients and

Growfit as well. By arranging early deliveries, Growfit avoids such delivery issues as

traffic jams. Hence, it saves both money and time for the company.

4.3.4 Create

In this stage, the authors suggest that businesses should look to build features, that

havee never been provided before, which would add value to operating in a blue ocean.

Again, we can use Cirque du Soleil as a good example. They integrated dances, songs,

a new level of acrobatics performances and connected it all with a single plot, therefore

you can enjoy the whole performance as one peace, the same way as if you enjoy theatre

performance.

At Growfit, the team mixed also different services at once. Growfit is a combination of a

restaurant and a healthy diet. Personal coaches at gyms can make your diet plan, but

they are not going to cook for you. However, Growfit makes both diet and food. Usually,

restaurants do not provide detailed nutrition information about their meals (kcal, proteins,

carbs fats), but Growfit does. You can check all the necessary information about each

meal at growfit.fi. At the same time, Growfit provides free unlimited consultations. Growfit

helps to change eating habits and is happy to explain and guide their customers in losing

weight or gaining muscles if they face any problems.

4.4 Marketing strategy

Growfit sells its service through online platforms. Due to Growfit doesn’t have “offline”

premises, except the kitchen, but the kitchen is used for production, it cannot be as a

“sales window”, Growfit faced some issues with first orders. Simply, Growfit’s customers

don’t know that Growfit exists. I am going to analyse step by step, how Growfit has been

building brand awareness and entrancing to the Finnish market. I am interested in

describing different strategies in order how they were taking a part in the business.

However, some of them were not so successful in the first stages, but later when Growfit

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decided to try them again it was more successful. I will explain, why it was happening

and why the accurate timing is really important.

4.4.1 First Facebook/Instagram campaigns

Growfit’s team thought at the beginning, that FB and Instagram campaigns are the best

solution for them. The team was sure, that the well visible campaigns will attract a lot of

customers. However, what happened is that the traffic to the website grew up

significantly, but there was not a single order. It happened because of a lack of trust in

the brand. For the Finnish market service, that was offered by Growfit is unique.

Let’s analyse a few reasons why Growfit’s first FB campaign failed.

In the first campaign, Growfit decided to launch two different videos at the same time

and one post advertisement.

Trust has long been identified as a significant factor in consumer-company relationships

(Kang, J.; Hustvedt, G. 2014). Growfit has a lack of brand awareness in the first stages.

The concept is unique for the Finnish market, therefore the marketing strategy had to be

focused on explaining to Growfit’s customers, what kind of pains they currently have

(maybe they don’t know even about them yet) and how Growfit can solve them.

Nevertheless, Facebook has their advertisement requirements, which forbid a lot of text

on the post. (Facebook Advertising policies. 2020) Therefore, Growfit was not able to

create a post, that could both highlight current customers’ pains and provide Growfit’s

solution. The video campaigns were more successful because video could provide more

visual associations and also Growfit was able to use sound to explain the idea. The

results were not as expected (sales); however, the campaign increased brand

awareness.

4.4.2 Opinion leaders

Opinion leaders finally launched Growfit. The first opinion leader was chosen not from

the bloggers or YouTubers. I want to describe him shortly; it would help to understand

the difference between “common” blogger and him. Social media is not his work, the

influencer is a co-founder of a real estate company, however, he has a strong social

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media presence. Nevertheless, he uses his social media mostly for promoting his

business and sharing his lifestyle. Because he is not making any marketing

collaborations – he is trustworthy in front of his followers. Growfit had a negotiation with

him around one week. He didn’t want to make any promotions, then Growfit and the

influencer agreed on such terms: he doesn’t have any regulations what to say or even

just say. He could just use Growfit service for a week and didn’t say about it. However,

when he tried the service, he wanted to share it because he personally liked it. Growfit

started to get orders from him. More than 20 orders in one day. It explains for several

reasons: the influencer with the audience who trusts him, people started to see, that

someone started to use service and he was making a few Instagram stories per day,

therefore opening fully the idea of Growfit (explaining the concept).

Growfit started to work together with a Finnish start-up Boksi. Boksi is a platform, that

connects influencers with businesses.

Boksi is a global content sourcing and influencer marketing platform. We make sourcing

custom content and influencers effortless and efficient for brands. Boksi was founded in

2018 in Helsinki, Finland.

Boksi.com

The collaboration with Boski brought new customers to Growfit and showed, that the

Growfit concept has interested between both influencers to promote and customers to

purchase. However, Boksi service became costly for Growfit, due to several reasons:

fixed costs for platform use, payments to influencers (Growfit didn’t pay any money to

opinion leaders before, only barter model), and Boksi commission from payment to

influencers. Some influencers have significantly high prices for Growfit at early stages,

for example, 770 euros for one-week promotion. It includes 3 Instagram stories and

one Instagram post. Also, for the majority of influencers who cooperate with Boksi,

social media is a part of all income, therefore influencers create many promotions post,

therefore it reduces trust from their followers (Bennis, W. 2010). Based on the factors

described above, Growfit decided to freeze collaboration with Boksi, because it was not

so effective at the first stages, however, Growfit decided to use Boksi, when they need

to promote a new product for example (keto diet) and have a sufficient budget for it to

be able to use all available advantages that Boksi company provides to their clients.

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4.4.3 Give-away. Word of mouth

For the current present strategy, based on experience, that Growfit got by applying

different approaches, the company decided to promote their brands within a give-away

strategy and word of mouth.

The give-away strategy was chosen because it’s relatively cheap for the company to

product test day of any meal or even 5 days for bigger campaigns. At the same time, it

helps to make clients closer to the company. The goal is not to convert a winner of give-

away to the client straight away but increase the product awareness between the Finnish

market. Many people still have stereotypes, that healthy food cannot be tasty. Growfit by

offering free samples try to destroy this delusion.

Word of mouth plays a key part in Growfit’s marketing model and philosophy overall. The

company’s target to build a trustworthy brand with loyal customers, instead of making a

lot of single sales in the short run. To achieve it, Growfit uses promo codes for their loyal

customer, also presents extra desserts, and always if for example delivery was 10

minutes late or accidentally confused two different meal plans and the client got a wrong

meal plan, Growfit without any arguments either providing same value meal plan or

giving a discount for next order.

4.5 Critical analysis of the Blue Ocean Strategy

Unfortunately, it is impossible to say, that the Blue Ocean strategy is an optimal solution

for all businesses. There are still many threats regarding its strategy and lack of real-life

examples of the Blue Ocean strategy’s catholicity.

The Blue Ocean Strategy, how it was mentioned above, requires companies instead of

fighting with existing competition, to create a new demand for a new product. However,

there is a lot of information missing about the possible demand. Information about the

market in read ocean is clear, due to enough knowledge about the competitive market,

but when we speak about blue ocean waters, it can be tricky to identify and sufficiently

calculate the demand. It can be a big threat for entrepreneurs to scale a business. The

Authors of “Blue Ocean Strategy” are not providing any evidences or key indicators, how

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to understand, that you are creating a product in blue waters, in reality, it can occur a

value gap between supply and demand, instead of creating an offer (Kampa at al, 2013).

Nevertheless, we should understand that the “Blue Ocean Strategy” has more critical

points. The “Blue Ocean Strategy” is not a manual for how to launch a successful

business, instead, it’s only one more approach, that worth studying. Both the Blue Ocean

approach and completive market approach have to deal with risks. On one hand, the

risks related to the clear clarification of the potential blue ocean waters and

understanding the demand there, on the other hand, risks related to be able to compete

between other companies.

5 A post-pandemic survival and growth plan for Growfit Oy

5.1 Advantages of a small business

When all world’s population hope, that pandemic is going to be over soon, facts are

telling us different, for example in Finland, the second wave of the new cases is coming

like Figure 2 well illustrates it. Unfortunately, businesses cannot just hope for the best,

but they have to be ready for changes to minimize pandemic costs for businesses. I am

going to analyse Growfit’s post-pandemic and growth plans, as an example of a young

start-up, that tries to grow during pandemic circumstances.

Pandemic has a different impact on different businesses. Some businesses had to stop

their operations, for example, some air companies. Flybe, Trans States Airlines,

Compass Airlines, Virgin Australia, Avianca, and this is not the full list of the companies

who became bankrupt in 2020 (Business Insider, 2020). However, Carol Roth described

in her article “One of Small Business’s Biggest Advantages – Flexibility” why small

businesses can perform better during the unpredictable circumstances like the pandemic

is.

First of all, Carol speaks about flexibility with staff. The idea is, that big enterprise has a

full state of rules and regulations, what their employees are allowed to do or not allowed

to do. The decision-making process, that is aiming to minimize risks can be very effective

during the “normal” circumstances, however, takes a lot of time, due to the vertical

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management hierarchy. During the pandemic outbreak, due to the fast-spreading of the

virus, and unpredictable regulations from the states regarding the spreading, the

decision-making process should be very fast and may change a couple of times per day.

Growfit company reacts immediately to the changes. For example, when the first

lockdown restrictions were applied in Finland, the Growfit team decided to integrate

contactless delivery to their customers. A courier, who delivered meals to a client, instead

of passing meals from hands to hands, was leaving bags with meals next to the door,

ringing the bell, and going on 2 meters distance from the door. Growfit’s customers who

were in quarantine still were able to use Growfit’s service because of this innovation. At

the same time, Growfit adapts to the situation and hired during the pandemic only on

part-time terms. For example, Growfit’s cook doesn’t have a fixed amount of hours of

work, but he is called when it’s necessary. A regular working week for a cook is 16 hours

per week (2 days of cooking). However, when there were many orders, for instance in

August, Growfit made sales of around 16 000 thousand, Growfit arranged 4 days of the

cooking process: two days of preparations and two days of cooking.

The second key factor, that provides an advantage for a small business, Carol highlights

adjustability with reactions. Carol explains it, due to the possibility to take advantage of

the current event by tweaking offerings and marketing around hot topics. How I have

mentioned above, an emergency asks for urgent actions. The pandemic lockdown

pushed people to have a lack of activities. Physicians say they are seeing more people

reporting unexpected weight gain during the pandemic (Healthline, 2020). Growfit was

arranging its marketing campaign and social network posts related to its issue. Growfit’s

team decided to target the common issue of many people and offer their solution for it.

The third advantage, that Carol mentioned, is the adaptability with options. It means to

be able to be more adaptive to customers’ requirements. Growfit is a great example of

the adaptability advantage. Growfit regarding the small size of the business can

customize their meal plans respectively to customers’ allergies or preferences. Growfit

tries to appreciate all customers’ wants and provide personal service to each of their

clients. At the same time, Growfit is flexible with its price policy. It’s possible to get a

discount if a client is passing some requirements, for example, if a client would like to

order two meal plans for twenty days to the same address (wife and husband), Growfit

is going to provide a good discount for them. At the same time, when the client is

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interested in only three-day options, Growfit is willing to find a suitable compromise for

both parties.

5.2 Growth plan for Growfit Oy

Growfit is a young Finnish company, that started its operations during COVID-19

pandemic. Therefore, growth plan was developed based on the pandemic

circumstances. Growfit’s idea to add B2B model to their operations related to have stable

monthly income, hence reduce risks. During the pandemic uncertainness, B2B model

can be as save bag for Growfit. At the same time, Growfit’s team understands, that

people during the pandemic prefer to save instead of to spend, therefore the company,

in some cases, can even sacrifice its margin for the getting market share. Finally, Finnish

government supports businesses in pandemic mean times. Growfit is willing to use

grants, that Business Finland provides for a new product development.

5.2.1 B2B model

Growfit is not interested in changing their model to B2B, but they are willing to add the

B2B model to their operations. Growift wants to expand its market share, and the B2B

model can significantly help them. At the same time, the B2B model has strong

advantages comparing to B2C one: convenience, higher profits, and improved security

(Ashley Donohoe, 2020).

For the Growfit company can be critically important to integrate the B2B model due to

the convenience factor. Agreements with other businesses can bring to Growfit a fixed

income, that is so necessary for Growfit at the early stages. So far, Growfit has a small

market share of the Finnish market, due to lack of the brand awareness, therefore month

to month can be very different, it is a threat to the decision-making process, simply it’s

too risky to make any costly investments, without any guarantees about next month

revenue. B2B model can help Growfit to get fixed monthly revenue and be confident

about “next day.”

Growfit is planning to focus on companies with at least 10 employees. For Growfit it

means higher profits, with minimization of the delivery expenses. Growfit with B2B model

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is going to be able to serve for example ten clients, but at the same address, that is great

delivery savings. However, it is a win-win situation for both Growfit and a company, that

is going to order Growfit’s service. Corporate social responsibility is an important part of

modern business.

Corporate social responsibility (CSR) occurs when a business firm consciously and

deliberately acts to enhance the social well-being of those whose lives are affected by the

firm’s economic operations.

William C. Frederick, 2018

William C. Frederick discovers why CSR is important for our modern world and for

companies at the same time. The goal of CSR is balanced between the company’s

operations and society's welfare (Corporate Social Responsibility, 2018). Growfit is

focused on employees’ wellbeing, however, companies will win also, if their employees

start to eat healthy, due to employee’s productivity directly depends on their eating

habits (Larry Alton, 2018). Therefore, employees are going to get well-balanced food

with all the necessary nutrients, but companies will get employees, who are more

productive comparing to workers who eat unhealthy food or skip lunch. Figure 5 shows

us statistics from THL research 2011, which illustrates the information about the eating

habits of workers. How we can see, some working places have a worksite canteen,

however, there are many which don’t. At the same time, even many employees who

have access to canteens, still eat their packed lunch. Growfit can provide an alternative

solution, that will help to keep employees productive and eliminate their need to

prepare their lunch.

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Figure 5. Lunch place choice. THL research 2011.

B2B model can bring to Growfit higher profits due to higher quantities. At the same time,

it can make delivery costs relatively smaller compared to the B2C model. Companies

and their employees will also win from the possible cooperation with Growfit.

Finally, improved security in B2B relationships can play an important part in Growfit.

Usually, the B2B model is connected to contract relationships with clear understandings

of each party's responsibility. Growfit’s team understands, that at early stages to make

long-term contracts unlikely is possible. However, even one-month relationships is a

significant term for Growfit at early stages, which can help to plan financial decisions for

the soon future.

5.2.2 Pricing

Growfit set up relatively high prices at the beginning of their operations. There were a

few reasons for it: the absence of external investments and lack of knowledge of the

process. The two reasons are connected. Growfit didn’t know about the cooking process

at the beginning and the decision was made respectively to a lack of experience. The

idea is to start from a little number of orders but be able to cross the break-even point.

Therefore, the margin is relatively high. Also due to lack of financing and order, Growfit

was not able to order a high amount from wholesalers, hence the costs of goods were

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higher than could be. Nowadays, Growfit constantly improves its purchases of raw

materials and negotiates with several big suppliers about future cooperation. Growfit’s

price target to be an affordable product to a worker who gets an average salary.

According to Statistics Finland reports, the average salary of a full-time employee was

2500 euros per month in 2016 (Yle, 2017). Figure 6 shows which percentage of an

income Finnish person spends on different segments. Growfit is mainly focused on Food

and non-alcoholic beverages, however, the cafes and restaurant segment are also

potentially interesting to the company, but not the main focus of interest.

Figure 6. Shares of consumption expenditure by the main group according to the

household’s income group in 2016 (Statistics Finland, 2018).

Figure 5 shows us, that Finnish citizen spends approximately 13% of his or her income

on food and non-alcoholic beverages. Based on the average salary, that I have

mentioned above of 2500 euros, 13% of it is 325 euros. Growfit’s goal is to optimize its

cooking process and purchases model to be able to sell a one-month subscription for

about 325 euros. It will allow them to target a bigger market, instead of being close to

luxury service.

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5.2.3 Cooperation with gyms and coaches

Growfit, how was mentioned above, is planning to cooperate with offices directly, but

cooperation with gyms can be indirect. Gyms can be a perfect marketing platform for

Growfit. Growfit’s target audience and gyms’ visitors are matching. An essential part of

training is eating habits. Weight loss occurs when a person spends more calories than

consumes (Gavin Van De Walle, 2020). Figure 7 shows us how many calories can be

burned in 30-minute activities. How we can see, the numbers are not higher than 300

calories, when one cheeseburger from Macdonald’s is 303 calories (USDA, 2020). It

clearly shows how important is food for achieving any results.

Figure 7. Calories burned in 30-minute activities (Harvard Medical School, 2004)

At the same time, people use coaching services, because coaches have better

experience in a particular sport. A coach can be a good middleman for Growfit company

because he can personally explain the advantages of Growfit to a customer.

5.2.4 Mobile application development

Growfit is interested in developing a mobile application for its customers and has started

to work in this direction already. The main goal of the application is to provide

personalized service to Growfit’s customers. For Growfit, the application is going to

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provide detailed information about the customers and the story of their purchases. The

application is going to have a personal account for each client, with the possibility to add

meals, that client doesn’t like to blacklist, and immediately provide an alternative for the

meal with keeping nutrients balance. It will help Growfit to understand, which meals are

favorites for clients, and which meals have to eliminate from the menu.

5.2.5 Attract investments

Growfit currently works without any external investments. Growfit offers a unique service

for the Finnish market. Building brand awareness can be very costly at early stages: paid

promotions, radio, tv or newsletter advertisement, collaboration with bloggers, flyers,

stickers and this is not the full list of possible instruments to build better brand awareness

than Growfit currently has. Also, the optimization of the cooking process for Growfit

means purchasing new equipment or even moving to a bigger premise, that can provide

enough space for the company’s operation. Growfit team, how it was described above,

wants to change their pricing as well, however, it requires new equipment and

cooperation with big wholesalers, all those items are costly. Therefore, to be able to scale

the business, Growfit is planning to attract external investments.

Business Finland organization was chosen as a preferable financial institute. Business

Finland provides both loans and grants for young businesses during the pandemic

outbreak (Business Finland, 2020). Growfit is interested in applying for grand from

Business Finland for mobile application development. Growfit’s goal is to develop a

service, that can be affordable for a majority of full-time employees and can be

personalized for different customers wants as maximum as possible. To be able to

achieve the goal, Growfit is going to need external financial inflows, that can be found

within Busines Finland.

6 Conclusion

COVID-19 attacked modern society and triggered many processes, that are dangerous

for economic health. Different countries combat the pandemic outbreak with different

strategies. No doubt, that the pandemic outbreak is going to have consequences in the

future, that were described in the thesis. However, global cooperation in the fight is a key

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element of the world’s surviving strategy. Different states help each other with healthcare

supports and financial investments to the economies (WHO, 2020). The pandemic

outbreak and the global lockdown particularly have a huge impact on the global

economy. The consequences of lockdowns are going to be clear after the pandemic is

going to be over. However, we can make predictions based on the analysis today

already.

Growth of racial discrimination cases in India, significant firings in the airplane industry,

collapse of oil prices, this is not the full list of the pandemic consequences, that are

happening right now. Global cooperation between governments is a key element for the

successful pandemic strategy. Also, financial institutes should fully understand the

pandemic consequences and try to support their citizens to prevent inequality growth

and financial crisis, that can be triggered due to global debt growth. The fiscal response,

as direct financial support to each citizen, can be a solution for the short-term issues.

The pandemic outbreak was fast and unpredictable for the majority of the countries,

therefore it’s cheaper to help everyone, instead of spending time on understanding who

needs the help more than others (Sergei Guriev, 2020).

Small and medium businesses take a significant part of a state’s GDP (Role of SMEs in

the Economy, 2012). It is very important to provide on-time support for them to prevent

financial issues in the future. Different countries apply a different fiscal response to the

pandemic.

Growfit was chosen, as a case study, to be able to clearly understand and examine a

small company’s actions under the pandemic circumstances. Growfit focuses on

different solutions to be able to combat the pandemic: flexible working schedule, adaptive

pricing policy, on-time marketing campaigns related to the hot topics, and in the soon

future the attractiveness of the external investments are the key elements of the Growfit’s

strategy.

Nevertheless, the pandemic should make our global economy and businesses

particularly stronger. States and their financial institutes experience the unpredictable

circumstances right now. The experience should be analyzed and learned for the future.

A good example of the learning experience was China with the SARS outbreak and their

response to COVID-19 illustrates, how experience can be applied in the future.

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