External Support
Student’s Name
Course Title and Code
Institution
Like any other industry or individual firms in the country, Grafa has incurred measurable problems since the surge of COVID-19. The reduction of customers attending the café and restaurant has been one of the significant challenges it has encountered. Lack of enough funds and financial support has promoted the depreciation in regular activity operation leading to an economic downfall for the café and restaurant as well as the entire food and hospitality industry. With the anticipation of the gradual increase in the pandemic’s extremities, Grafa requires support from various bodies or organizations to sustain its operation. One major player that can promote the company’s survival is the government. The government has implemented different policies to support Small and Medium Enterprises (SMEs), a component that Grafa can be categorized in.
Government Support
First and foremost, the government allocated an additional RM10 billion for SMEs to ease the financial burden experienced during this period of uncertain adversity. These funds are stipulated to help in various sections concerned with maintaining functionality. It offers a basis through the companies containing local workers have subsidized wage assistance depending on the number of employees present in the firm. This is to assist Grafa in ensuring that a reduced number of employees are laid off to retain workers. Moreover, the government encouraged money lending institutions to offer organizations such as Grafa moratorium for six months from April 2020 (TMF, 2020). Such initiatives ensure that despite companies obtaining reduced revenue, they maintain functionality, thus sustainability through the pandemic. Financial support from the government promotes businesses’ recuperation into a ‘new normal’ that enables a faster return to organizational, industrial, and national economic growth.
Exhibit 4.2: A staff working in the café during this pandemic.
Other than the government’s financial support, promotion of private sector investments and devising a short-term recovery plan is another initiative that Grafa has obtained as a form of government assistance. The Malaysian government took the initiative to promote private-sector investments by introducing a co-investment fund. Through the Bank Negara Malaysia (BNM), the fund offered special relief facilities to private companies that could provide the working capital for SMEs at a subsidized interest (IMF, 2020). Therefore, Grafa may apply for such opportunities to ensure that it continuously provides its services to target clients, maintains its employees, and gradually growing despite the pandemic’s existence.
Besides promotion initiatives, a medium-term recovery plan for all sectors was established by the government. Grafa benefits from this plan as it mentions the safe operating protocols, health guidelines, capacity building, job creation, and how to hire employees during this pandemic. However, one of the significant benefits Grafa has ripped from this initiative/plan is the ability to satisfy customers through online digital channels (Lee, 2020). Grafa has continued to supply its products and services to its clients in this period. This has been obtained through the various digital channels and platforms it has used to get to clients. Websites and applications such as Foodpanda, Bungkusit, and DeliverEat have been influential in ensuring that the company is operational. Food lovers can place their preorders through the websites and wait for the café and restaurant to deliver. Thus, they have facilitated an easy and quick supply of clients’ orders through these digital channels to doorsteps.
Exhibit 4.3: Foodpanda’s website showing the delivery hours for orders placed online
References
International Monetary Fund (IMF). 2020. Policy Responses to COVID-19: Policy Tracker. Retrieved from 18th December 2020 https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#M
Lee, N., Y. (2020). Asia Economy: Malaysia’s upcoming budget could test support for its embattled prime minister. CNBC. Retrieved from 5th November 2020 https://www.cnbc.com/2020/11/06/malaysias-2021-budget-could-test-support-for-prime-minister-muhyiddin.html
TMF Group. (2020). Government support schemes for COVID-19. Retrieved from 22nd September 2020 https://www.tmf-group.com/en/news-insights/coronavirus/government-support-schemes/