Covid 19 Facts and Insights March 25 V3.ashx

COVID-19:
Briefing materials
Global health and crisis response
Updated: March 25, 2020
CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of McKinsey & Company
is strictly prohibited
Current as of March 25, 2020
COVID-19 is, first and foremost, a global

humanitarian challenge.
Thousands of health professionals are heroically battling the virus, putting
their own lives at risk. Governments and industry are working together to
understand and address the challenge, support victims and their families and
communities, and search for treatments and a vaccine.
Companies around the world need to act promptly.

This document is meant to help senior leaders understand the COVID-19
situation and how it may unfold, and take steps to protect their employees,
customers, supply chains, and financial results.
Read more on McKinsey.com

Executive summary
The situation now Actions that institutions can take

At the time of writing, COVID-19 cases have exceeded 380,000 and are
1 2 3
increasing quickly around the world, with concerns that a 15% hospitalization
rate could drive hospital system overload. Resolve Resilience Return
To reduce growth in cases, governments have moved to stricter social Address the immediate Address near-term Create a detailed
distancing, with “shelter in place” orders in many areas in the U.S., Europe, challenges that cash management plan to return the
India, and other countries. This has driven rapid demand declines—among the COVID-19 represents challenges, and business back to
deepest in recent times—that are being met by attempts at bailouts. to the workforce, broader resiliency scale quickly
customers and partners issues
Some Asian countries, e.g. China, have kept incremental cases low, and
are restarting economies. So far, there is little evidence of a resurgence
in infections. 4 5
Reimagination Reform
Re-imagine the “next Be clear about how
normal”—what a discon- the environment in your
How the situation may evolve tinuous shift looks like, and industry (regulations,
There is a limited window for governments to drive adequate public-health implications for how the role of government)
responses and meet demand drawdowns with proportionate economic institution should reinvent could evolve
interventions. Without this, the possibility of a deeper effect on lives and
livelihoods is more likely.
Scaled-up testing will soon clarify the extent and distribution of spread in the
U.S., and Europe.
Establishing a Nerve Center can ensure
Learnings from other countries and recent innovations (strict social distancing
speed without sacrificing decision
rules, drive through testing, off-the-shelf drugs that can address mild cases,
quality across these five dimensions.
telemedicine enabled home care) could provide basis for a restart.
McKinsey & Company 3

Contents
01 02 03 04 05
COVID-19: Scenarios and Sector-specific Planning and Leading
The situation path forward impact managing indicator
now COVID-19 dashboards
responses

The global spread Impact >380,000 >16,000

is accelerating to date
with more Reported confirmed Deaths
reports of local cases
transmission
Latest as of March 25, 2020 194 >115 >75
Countries or territories Countries or territories Countries or territories
with reported cases1 with evidence of local with more than 100
transmission2 reported cases1
0.4% >160% 35
China’s share of new Increase in reported New countries or
reported cases cases March 18–24 territories with cases
1.Previously counted only countries; now aligned with WHO reports to include
territories and dependencies; excluding cruise ship March 18–24 from Europe March 18–24
2.Previously noted as community transmission in McKinsey documents; now
aligned with WHO definition
Sources: World Health Organization, John Hopkins University, CDC, news reports McKinsey & Company 5
The virus has spread Europe
worldwide despite Total cases >195,500

Total deaths >10,000
containment efforts China
Total cases >81,500

Total deaths >3,200
Africa
Total cases >1,000

1
North America Total deaths >20
Total cases >56,000

Propagation trend
Total deaths >600
>10,000 reported cases Oceania
1,000-9,999 reported cases Total cases >1,800

250-999 South America Total deaths <10
100-249 Total cases >4,000

50-99 Total deaths >50
10-49 Middle East3
<10 Asia (excl. China)2
Total cases >27,000
Total >1,800 Total cases >16,500
1. Johns Hopkins data used for U.S., all other North America countries reporting from WHO deaths Total deaths >250
2. Includes Western Pacific and South–East Asia WHO regions; excludes China; note that South Korea incremental cases are
declining, however other countries are increasing
3. Eastern-Mediterranean WHO region
Source: World Health Organization, Johns Hopkins University, McKinsey analysis

Greatest share of recent cases comes from Europe,

although U.S. cases are rapidly accelerating
Cumulative number of cases since March 1 – March 24 Asia
Incremental cases for China
Thousands and South Korea have slowed
significantly, with majority of new
400 cases in China categorized as
380 imported versus local transmission.
360
340
320 Europe
300 In contrast, European transmission
280 has increased significantly this month,
260 led by Italy with nearly 60,000 total
cases. Close monitoring of
240
Italy incremental case counts across a
220 number of European countries in the
200 U.S.1
upcoming days will be critical to
180 Spain determining if distancing measures
160 Germany are having effect.
140 Iran
120 France
100 South Korea
United States
The U.S. has seen total cases
80 Switzerland increase nearly ~8x in the last week,
60 UK from ~6,500 on March 17 to ~50,000+
40 on March 24; the U.S. now has the
Rest of world
20 third largest number of total cases,
China
0 following China and Italy and is
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 growing at a rate of ~10k cases per
March day (March 23-March 24).
1. U.S. data from Johns Hopkins University CSSE (March 24 data point from live tracker from 1400PT); all other data from WHO Situation Reports
Sources: WHO situation reports, Johns Hopkins University, press search McKinsey & Company 7
Countries begin with similar trajectories

but curves diverge based on range of measures taken
Cumulative number of cases
Select country detail
70,000
Cumulative number of cases
Italy: In response to the rapid increase
60,000 in cases, a lockdown (first regional and
then nationwide) was implemented and
the country has since significantly
expanded access to testing.
50,000
Italy
Iran South Korea: Aggressive testing,
contact tracing and surveillance, and
40,000 South Korea mandatory quarantines are helping
Spain isolate virus clusters and dramatically
France slow spread of outbreak in Daegu.
30,000
Germany
United States: Accelerating
US
20,000 transmission and recent scale up in
UK testing have seen dramatic rise in
cases at a rate higher than that of Italy;
10,000 social distancing measures are being
rolled out primarily
at the state and local level.
0
0 3 6 9 12 15 18 21 24 27 30 33
Days since 100th case
1. U.S. data from Johns Hopkins University CSSE (March 24 data point from live tracker from 1400PT); all other data from WHO Situation Reports
Sources: WHO situation reports; Johns Hopkins University, press search McKinsey & Company 8
South Korea: Rigorous investigation of outbreak clusters

and rapidly scaled testing capabilities limited spread
Incremental cases per day and tests performed in South Korea Number of tests performed New reported cases per day
Number of reported cases
Feb 4 – Feb 9, 16 – Feb 24 –

Government ‘Patient-31’ 15 countries Mar 20 – Localized outbreaks,
approves first exposes ~1000 impose travel Mar 3 – Korea pioneers Mar 9 – including another infected church
test kit after 16 congregants in restrictions on drive-through testing ~180,000 congregation, point to ongoing
reported cases Daegu church South Korea inspired by fast food chains individuals tested need for surveillance and response
Tests
performed
Feb 20 – Daegu Mar 1 – Government
1,400 20,000
residents clear streets begins investigation
1,200 in response to outbreak of Daegu church
15,000
1,000
800
10,000
600
400
5,000
200
0 0
16 29 01 24
February March
Source: WHO situation reports, CNN, New York Times, Korean CDC, press search McKinsey & Company 9
China: Rapid lockdowns were employed to manage

outbreak before ramping up testing and response capabilities
Incremental cases per day and total reported cases in China Total reported cases New reported cases per day
Number of reported cases per day
Jan 23 – City of Feb 7 – All students Feb 21 – Government Mar 1 – 28 provinces (more
Wuhan is locked down asked not to return eases traffic restrictions, than 4/5ths of total) have
and travel from nearby to school following encourages work to resume resumed normal inter-provincial
cities is restricted Chinese New Year in less-affected areas passenger transport
Feb 3 – Hong Kong Feb 19 – China begins Feb 24 – 320,000 Mar 10 – Closure
closes all but 3 of 14 to sustain daily new case tests conducted to of last of 16 Total reported
cases
border control points reports below 2,000 date in Guangdong temporary hospitals
20,000 90,000
Jan 24 – All
tourist activity in
4,000 Hubei canceled
60,000
3,000
2,000
30,000
1,000
0 0
23 31 01 29 01 24
January February March
1. Changes in new case tracking and reporting methodology yield spike in reported cases
Source: WHO situation reports, New York Times, Chinese government official notices and reports, press search McKinsey & Company 10
Italy: There are early signs that the number of cases are plateauing
Incremental cases and tests per day Number of tested persons per day New reported cases per day
Number of reported cases
Feb 21 – Cluster of 16 Feb 26 – Testing criteria are Mar 8 – Lockdown extended Mar 20 – Italy testing at rate
cases identified in relaxed, allowing contacts of to all of Lombardy and 14 of ~3500 per million, amongst
northern Italy confirmed cases to be tested other northern provinces highest in western Europe
Tests
Feb 23 – performed
Officials lock
10,000 down 10 towns 28,000
9,000 in Lombardy Mar 6 – Authorities begin testing Mar 9 – Italy begins
8,000 after spike in all 3,300 residents of northern national lockdown;
cases town of Vò (new cases now zero) travel banned 21,000
7,000
6,000
5,000 14,000
4,000
3,000
7,000
2,000
1,000
0 0
19 29 01 24
February March
Source: WHO situation reports, CNN, New York Times, press search McKinsey & Company 11
Western countries are largely instituting the “Early China

model,” focused on immediate containment while ramping up testing
Most appropriate Most appropriate
for high-burden settings for low-to-medium
burden settings
Contain and restrict movement Test, track, and isolate

“Early China model” “South Korea model”
Characteristic Border closures and city-level lockdowns, quarantines Aggressive testing of suspected cases,
actions “Shelter-in-place” restrictions on individual movement clusters (5000+ tests per million population)
Mandatory closures of businesses Contact tracing and isolation via surveillance
Quarantine enforced by government monitoring
5,000 10,000
Testing U.S. France Spain UK Italy Norway
XX = tests per
million people1 ~310 ~560 ~640 ~960 ~3,500 ~8,000
Countries’ State and National lockdown National lockdown Early strategy Imposed strict regional and national Quickly scaled testing,
city-level with strict police limiting non-essential focused on lockdowns early; testing per capita is e.g. drive-through
responses closures; enforcement; has movements; reported scaling testing vs. ~4x most peer EU countries with some testing available 7 days
testing performed targeted logistical issues lockdowns, though regions testing nearly full population after first confirmed case;
lagging vs. widespread limiting testing officials began instituted punishment for
other testing capabilities enforcing quarantine violations
countries lockdown March 20
1.Based on University of Oxford, "Our World in Data- How many tests for COVID-19 are being performed around the world?", accessed March 20, 2020. U.S.,
Italy and Norway figures from March 20, Spain from March 18, UK from March 17, France from March 15.
Sources: University of Oxford, Sante Publique France, Istituto Superiore di Sanità (ISS), UK Department of Health and Social Care, Ministerio de Sanidad, Consumo y Bienestar Social, U.S. CDC, press search McKinsey & Company 12
Contents
01 02 03 04 05
responses

The Imperative of our Time
1 “Timeboxing” the Virus

and the Economic Shock
Safeguard our lives
1a. Suppress the virus as fast as possible
1b
1b. Expand treatment and testing capacity
1a 1c
1c. Find “cures”; treatment, drugs, vaccines
Imperatives
2
~ -8 to -13% 2c
Economic
Shock 2a
2b
Safeguard our livelihoods
2a. Support people and businesses affected by lockdowns
2b. Prepare to get back to work safely when the virus abates
2c. Prepare to scale the recovery away from a -8 to -13% trough
Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 14
Scenarios for the economic impact of the COVID-19 crisis

GDP impact of COVID-19 spread, public health response, and economic policies
Rapid and effective control
of virus spread
B1 A3 A4
Virus contained,
Strong public health response succeeds but sector Virus contained;
Virus contained,
in controlling spread in each country damage; lower strong growth
slow recovery
within 2-3 months long-term trend rebound
growth
Virus spread and
public health Effective response, but
response (regional) virus resurgence B2 A1 A2
Public health response initially succeeds Virus Virus resurgence; Virus resurgence;
Effectiveness of the public but measures are not sufficient to prevent resurgence; slow long-term return to trend
health response viral resurgence so social distancing slow long-term growth growth
in controlling the spread continues (regionally) for several months growth
Muted World Recovery Strong World Rebound
and human impact
of COVID-19
Broad failure of public health
interventions B3 B4 B5
Pandemic Pandemic Pandemic
Public health response fails escalation; escalation; slow escalation;
to control the spread of the virus prolonged progression towards delayed but full
for an extended period of time downturn without economic recovery economic recovery
(e.g., until vaccines are available) economic recovery
Partially effective Highly effective

Ineffective interventions interventions interventions
Self-reinforcing recession dynamics Policy responses partially offset Strong policy responses prevent
kick-in; widespread bankruptcies and economic damage; banking crisis structural damage; recovery to pre-
credit defaults; potential banking crisis is avoided; recovery levels muted crisis fundamentals and momentum
Knock-on effects and economic policy response

Speed and strength of recovery depends on whether policy moves can mitigate
self-reinforcing recessionary dynamics (e.g., corporate defaults, credit crunch)
Source: “Safeguarding our lives and our livelihoods: The imperative of our time,” Sven Smit, Martin Hirt, Kevin Buehler, Susan Lund, Ezra Greenberg, and Arvind Govindarajan McKinsey & Company 15
Scenario A3 Virus contained

Real GDP, Local Currency Indexed
Real GDP
Drop 2019 2020 GDP Time to Return
Real GDP Growth – COVID-19 Crisis World Eurozone Q4-2020 Q2 Growth to Pre-Crisis
Local Currency Units Indexed, 2019 Q4=100 USA China % Change % Change Quarter
111
108 China -3.3% -0.4% Q4 – 2020

105
102
USA -8.0% -2.4% Q3 – 2020
99
96
World -4.9% -1.5% Q2 – 2020
93
90
87 Eurozone -9.5% -4.4% Q1 – 2021

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2021
1. Seasonally adjusted by Oxford Economics
COVID-19 U.S. impact could exceed anything since the end of WWII
United States Real GDP
%, total draw-down from previous peak
-5
-8% Scenario A3
-10
-13% Scenario A1
-15
-20
-25
-30
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
Pre-WW II Post-WW II
Source: Historical Statistics of the United States Vol 3, Bureau of economic analysis; McKinsey team analysis, in partnership with Oxford Economics McKinsey & Company 17
Scenario A1 Muted Recovery

Real GDP, Local Currency Indexed
Real GDP
Drop 2019 2020 GDP Time to Return
Real GDP Growth – COVID-19 Crisis World Eurozone Q4-2020 Q2 Growth to Pre-Crisis
Local Currency Units Indexed, 2019 Q4=100 USA China % Change % Change Quarter
110
China -3.9% -2.7% Q2 – 2021

105
100
USA -3.9% -2.7% Q1 – 2023
95
World -6.2% -4.7% Q3 – 2022

90
85 Eurozone -12.2% -9.7% Q3 – 2023

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2021
1. Seasonally adjusted by Oxford Economics
What business leaders should look for in coming weeks

There are three questions business leaders are asking, and a small number of indicators that can give clues
Depth of disruption Length of disruption Shape of recovery
How deep are the demand reductions? How long could the disruption last? What shape could recovery take?
Indicators to monitor Indicators to monitor Indicators to monitor
Time to implement social distancing after Rate of change of cases Effective integration of public health measures
community transmission confirmed Evidence of virus seasonality with economic activity (e.g. rapid testing as
Number of cases – absolute (expect surge as pre-requisite for flying)
Test count per million people
testing expands) Potential for different disease characteristics
% of cases treated at home over time (e.g. mutation, reinfection)
Geographic distribution of cases relative to
economic contribution % utilization of hospital beds (overstretched Bounce-back in economic activity in
system recovers slower) countries that were exposed early in
Cuts in spending on durable goods (e.g.,
cars, appliances) Availability of therapies pandemic
Extent of behavior shift (e.g., restaurant Case fatality ratio vs. other countries Early private and public sector actions
spend, gym activity) Late payments/credit defaults during the pandemic to ensure economic
restart
Extent of travel reduction (% flight Stock market & volatility indexes
cancellations, travel bans) Purchasing managers index Epidemiological indicator
Initial claims for unemployment Economic indicator

Contents
01 02 03 04 05
responses

Market capitalization has declined across sectors, with

significant variation to the extent of the decline
Weighted average year-to-date local currency total shareholder returns by industry in percent1. Width of bars is starting market cap in $
Apparel, Fashion & Luxury

Chemicals & Healthcare Facilities & Services
Agriculture
Transport & Infrastructure
Conglom- Health- Business Defense
erates care Services Personal & Office Logistics &
Consumer Durables Goods Trading
Real Payors
Commercial Electric Power &
Estate Natural Gas Medical Healthcare Supplies Consumer
Aerospace Air & Travel Other Technology & Distributions services
Automotive Financial Basic Food & Advanced
Oil & Gas Insurance Banks & Assembly Services Materials Beverage Electronics Telecom Media Pharma High Tech Retail
0
-5
-10
-15
-20
-25
-30
-35
-40
-45
-50
1. Data set includes global top 3000 companies by market cap in 2019, excluding some subsidiaries, holding companies, companies with very small free float and companies that have delisted since
Source: Corporate Performance Analytics, S&CF Insights, S&P Global McKinsey & Company 21
1.
10
20
30
40
50
60
-80
-70
-60
-50
-40
-30
-20
-10
0
Oil & Gas
Aerospace & Defense
Air & Travel
Healthcare Payors
companies
Other Financial Services
and companies that have delisted since

Insurance
Conglomerates
Banks
Source: Corporate Performance Analytics, S&CF Insights, S&P Global

Automotive & Assembly
Chemicals & Agriculture
Real Estate
Business Services
Apparel, Fashion, & Luxury
Transport & Infrastructure
Healthcare Facilities & Services
Basic Materials
Medical Technology
Electric Power & Natural Gas
Advanced Electronics
Data set includes global top 3000 companies by market cap in 2019, excluding some subsidiaries, holding companies, companies with very small free float
Distribution of year-to-date total shareholder returns by industry percent1
Consumer Durables
Food & Beverage
Logistics & Trading
Media
Personal & Office Goods
High Tech
Even within sectors, there is significant variance between
Telecom
Healthcare Supplies & Distribution
Pharmaceuticals
Retail
McKinsey & Company
Consumer Services
22
The hardest hit sectors may not see restart until 2021
Preliminary views on some of hardest hit sectors based on partially effective scenario - subject to change
Commercial Air & Travel Insurance Oil and gas Automotive Apparel/fashion/
Aerospace carriers luxury
Estimated degree
of impact, in terms Longest
of duration
Estimated
global restart
Q3 / Q4 2021 Q1 / Q2 2021 Q4 2020 Q3 2020 Q3 2020 Late Q2 / Q3 2020
Avg. chang
in stock price -44% -44% -33% -48% -32% -28%
Industry specific Preexisting industry Deep, immediate demand US insurers have been Oil price decline driven by Existing vulnerabilities Overall decline in private
examples challenges, a quick drop in shock 5-6x greater than strongly affected, both short-term demand (e.g., trade tensions, consumption and exports
possible revenue, and high Sept 11; ~70-80% near- especially reinsurers and impact and supply declining sales) amplified of services.
fixed costs cause near- term demand erosion due life & health insurers overhang from OPEC+ by acute decline in
Demand for apparel
term cash flow and long- to int’l travel bans & decision to increase Chinese demand,
Reduced interest rates categories down sharply
term growth uncertainty. quarantines now prevalent production continued supply chain and
and investment overall and expected to
in 130+ nations production disruption (in
It may take years to performance impacting Oversupply expected to take longer to return than
China, rest of Asia, EU) to
recover from production N. Hemisphere summer returns – esp. for longer- remain in the market economic restart; online
amplify impact despite
and supply chain travel peak season deeply tail lines even after demand growth exists (though
ongoing Chinese economic
stoppages, due to critical impacted since pandemic recovery, and post 2020, hampered by labor
Disruptions expected in restart
vendors located in areas fears coincide with peak unless OPEC+ decides to shortage)
new business and
impacted by the virus. booking period cut production Headwinds to persist into
underwriting processes Retail stores temporarily
Recovery pace faster for due to dependence on Q3 given tight inventories closed in many parts of
Long order backlogs
domestic travel (~2-3 paper applications and (<6 weeks), supply chain the world – high regional
mitigate some concerns,
quarters); slower for long- medical underwriting complexity (therefore, variation
though rapid adoption of
haul and int’l travel (6+ minimal ability to shift)
remote work technologies
may put a dent in high- quarters)
profitability business travel.
Source: IHS Market, McKinsey Global Institute, Subject matter experts, press reports, Corporate Performance Analytics, S&CF Insights, S&P Capital IQ McKinsey & Company 23
Contents
01 02 03 04 05
responses

Leaders need to think and act
across 5 horizons
1 2 3 4 5
Resolve Resilience Return Reimagination Reform

Address the immediate Address near-term Create a detailed plan Re-imagine the “next Be clear about how
challenges that cash management to return the business normal”—what a the regulatory and
COVID-19 represents challenges, and back to scale quickly, discontinuous shift looks competitive environment
to the institution’s broader resiliency as the virus evolves like, and implications for in your industry may shift
workforce, customers, issues during virus- and knock on effects how the institution
technology, and related shutdowns and become clearer should reinvent
business partners economic knock-on
effects
Nerve center
Managing across the 5Rs requires a new
architecture based on a team-of-teams approach.

1
Resolve
Address the immediate social and mental challenges
that COVID-19 represents to the institution’s
workforce, customers, and business partners, and
take basic steps to protect liquidity.

Resolve
Resolve: Making hard decisions on immediate challenges

Resolve employee, customer, supply chain, immediate liquidity, and technology concerns
Employees Supply chain Customers Immediate liquidity Technology
Emerging Current mix of work-from-home and at-work social distancing Supply chain shifting from initial concern Extreme demand reduction Revenue drops raising Need to sustain
concerns & worker safety concerns combined with economic anxiety is about China restart, to, continuing logistics raising need to assuage need to manage operations and
driving stress and reducing productivity issues, and concern about macro- customer concerns and put in immediate liquidity enable remote
environment impact on demand planning place strict protections working
Example, new New team structures that work remotely: smaller, cross Conduct scenario planning to Build a plan to prioritize & Understand current Strengthen the
ideas that functional network-of-teams vs. rigid top-down organization understand how inventory buffer changes protect valuable customers: available cash and service desk to
leading in various disease scenarios Understand what matters project change over prepare for
New rules for leading remotely: clearly defined outcomes,
organizations to them—and how their extended shutdown higher call
multi-channel team communication; clear milestones or Task S&OP team to build 3-6 plans
situation will evolve frequency (e.g.,
are decision points; transparency under a range of demand scenarios Identify and execute
home work
experimenting month to determine required supply Focus on cultivating the immediate, low-risk
setup, remote
Investing in the right collaboration processes: active use
with most important segments levers to improve
of joint whiteboarding, polling, doc sharing, channel based Leverage direct communication access, VPN)
(e.g., highest margin, cash position (e.g.,
communications channels with direct customer when
continuous customers, capital projects, Design
determining demand signals
Leveraging technology team to empower remote work community needs, voluntary spend, working model
capability: online articles, collaboration tools, training on Use market insights/external databases contractual obligations) inventory working (people and
appropriate channels to estimate demand for customer’s Build customer trust capital) processes) to
customers through transparency: “keep the lights
Caring culture: acceptance of WFH realities such as “always Stand up teams to run
on” in critical IT
on” professionalism; informal socializing (virtual “water cooler” Identify critical functions and roles and Don’t pursue “revenue at rolling 13-week cash
functions
chats); authenticity develop back-up plans any cost”—judiciously forecasts, plan further
(particularly
choose where to invest, action (e.g., monetize
Tighter routines for productivity: commit to norms, have incident
based on analysis and balance sheet), and
team launches, clarify most critical meetings, set aside coordination)
planning control spend
personal time & routine
Establish a rhythm of
Enact “pods” for on-site personnel and leadership to updates & engagement,
minimize employee exposure while on site offering more frequent
Agree on adaptations required for collective bargaining update, targeted content,
units (e.g., unions) and contractors and/or individual outreach
Increase personal protective equipment where employees

come in close contact with surfaces that can spread the virus
Resolve
Employee work from home deep dive (1/2)

Key challenge of remote teams (if left unmitigated) is reduced efficiency and
cohesion
Key sources of inefficiency and reduced cohesion Productivity decay
with # of sites
Structure Any lack of clarity in roles and responsibilities, decision rights or objectives is
amplified in a remote environment Complexity units per
Difficult of navigating large or hierarchical organizational structures man-week, indexed
People Sense of lack of direction / isolation can degrade morale and performance
Misunderstandings or lack of clarity on priorities leading to wasted work
100
Isolation and lack of social interaction leading to lower employee motivation
and less cohesion as a team
76
Process Lower communications efficiency due to missing in-person touch, time it
takes to write vs talk, finding time together, or bad connectivity
Difficulty in self-organizing to address real-time challenges
48
Risk to overlook dependencies and create island solutions
Technology Outdated architecture, slow VPN access

Missing tooling (e.g. for VC, co-creation, DevOps) exacerbate collaboration
challenges
Impractical security inhibits remote work, leads to team members adopting
insecure workarounds 1 site 2 sites 6 sites
Sources: Press searches; Web pages; Interviews; McKinsey Numetrics; Team analysis McKinsey & Company 28
Resolve
Employee work from home deep dive (2/2)

Approach to building effective teams in a distributed, online environment
Structure People Processes Technology

Nature of work (e.g. real-time Leadership’s increased role in Cadence of meetings to synchronize work Technology setup and
collaborative, vs. standardized providing direction, energizing and remove blockers across teams infrastructure for remote work (e.g.
individual; type of data teams & connecting the dots home office setup, VPN bandwidth,
Clear decision and escalation paths,
accessed) influencing work- remote application access)
Focus on cultural elements at stage/quality-gates, workflows with roles &
from-home arrangements and individual and group level that responsibilities to facilitate handovers Adoption of suite of SaaS digital
structure drive performance in remote tools to facilitate effective co-
Tailored communication tools catering to
Smaller, cross-functional work (e.g. proactiveness) creation, communication and
different scenarios and accounting for topic
teams with clear roles and decision making (e.g. VC, file-share,
Investment into soft aspects to complexity, output, reaction time, and team
responsibilities as well as real-time communication, document
form a cohesive group identity preference
synchronization mechanisms co-editing, task management, etc.)
despite social remoteness (e.g.
Single digital source of truth across people
A mixture of OKRs and KPIs through role-modeling, 1:1s, Automated delivery pipelines and
(e.g. face book), content (e.g. standards,
used to communicate goals to townhalls, retrospectives) collaboration tools to enable a
OKRs), performance (e.g. KPI dashboards)
the team and track progress remote product development
& process (e.g. task management boards)
against deliverables environment
Result-oriented performance
management on all levels: individual, team Strong and practical security
and tribe enabled by digital dashboards standards and practices
Sources: Press search; interviews; McKinsey Numetrics; team analysis McKinsey & Company 29
Resolve
On-site employee safety – Manufacturing example (1/2)

Manufacturing workforce safety can be increased by creating operating pods, but design considerations apply
Design considerations General guidance on how to apply
to building a pod levers Example actions
Who to group into pods Define the minimum size group to achieve Remove any floating workers from potential pods
desired production levels and minimize
Group pods vertically along production line and break inter line (workers working on multiple lines) and beginning/end of line
contact between employees and product
transfer points (line employee picks up raw materials instead of a rover dropping off material)
What job is done Reclassify jobs/roles to improve ability to Reclassify jobs (can be temporary) vertically along production line so one worker does multiple jobs on same production line versus
form pods and decrease inter-pod contact horizontally across multiple lines (line may need to slow)
Remove or adjust unnecessary line contact (quality checks done by line employees versus central quality)
How the pod works Add additional safeguards within the pod Ensure job tasks within pod protect the pod from itself, including additional PPE and separation throughout the shift (tasks can be
together to further limit exposure adjusted to ensure 6 ft. separation)
Institute increased sanitation of pod and workplace (hand washing, deep cleaning after shift, etc…)
Stagger break and lunch times/locations
When the pod performs Change shift time and structure to limit Adjust start/end times to avoid inter-pod contact for pods working at same time, if site has only day shifts for multiple lines –
work exposure consider going to 24 hrs operation to limit lines on site at a time
Adjust weekly schedule including going to 12-hr shifts and 2 week on/off to minimize the number of people on site over a day/week
Where the pod Move the location of work to create social Modify non-work arrangements to minimize exposure including where pod is housed and how they get to work (critical operations
performs work separation between pods such as power plants and refineries are considering housing employees on site)
Restrict access between pods, ideally with social barriers (card access, temporary walls)
Move production lines to ensure adequate separation and consider temporary options (tents)
Close public spaces (cafeterias, gyms) and find alternate locations for workers to eat and move around
Plan for pod event Develop response scenarios for likely Practice and train on likely scenarios (immediate and long-term response)
events such as a pod test positive
Define production flexibility and back-up options if line goes down
Define backup pod staffing (refresh skills matrix to see who could cover, consider keeping a backup pod available in case of event)
Note: Certain actions must be implemented together to ensure mitigation of risk

Resolve
On-site employee safety – Manufacturing example (2/2)

Changing shift patterns is an option to limit exposure
Current situation – 3 shifts Option 1 – Reduction in shifts Description Pros Cons
Day M T W T F 16h x 5day model Incremental change, easy to Daily ramp ups and downs
implement causing inefficiencies
24 hours x 5 days model 5 ramp ups per week
Line 1 Dedicated people to each line Process cycle time must be
Operators dedicated to either Line 1 or Allows for deep cleaning on shorter than 16h if cannot be
Line 2 3rd shift Maintenance can be done in
interrupted
3rd shift
Line 2
Flexible
Day M T W T F
Option 2 – Reduction in pace
Day M T W T F 24h x 5day model Incremental change, easy to Depending on process, can
Line 1
implement result in inefficiencies
Production run at lower speed
Line 1 (less FTEs assigned to lines) Dedicated people to each line
Flexible
Line 2 Line 2 One ramp-up and down per
week
Option 3 – Dedication to a line

Production “lines” are used for
illustrative purposes but the reasoning Day M T W T F
can be extrapolated to manufacturing 24h x 5day model Machines productive Cross training is needed for
sites with the same products, different time/running time ratio is whole staff, more difficult to
Operators are dedicated to
parts of a site, different steps in a Line 1 maximized implement
line 1 and then to line 2 –
process, etc. creating time barrier for inter- One ramp-up and down per Needs good demand forecast
Line 2 line contact week
Source: Adapting production shifts to low demand in asset-heavy industries McKinsey & Company 31
2
Resilience
Address near-term cash management challenges,
and broader resiliency issues

Resilience
Sector-specific power curves

show dramatic differences in
performance during the recession
Speed +
Discipline – Mean TRS for Automotive sector The top 20% of companies that
2007-11 emerged from the recession are
the key to called the Resilients
Resilience
30
Teams seeking to boost These resilients didn’t have any
20
Resilience during particular starting advantage (e.g.,
COVID-19 need to learn 10 existing portfolio). Instead, they
lessons from the managed to achieve a small lead,
0
companies that survived which they then extended over
& thrived in the last -10 the next 10 years
recession – the
-20
Resilients
-30 Two words that define their
Non-Resilients
success: Speed & Discipline
Resilients

Resilience
Speed+ Discipline – how the

Resilients stood apart
Compared to Non-resilients,
EBITDA Resilients companies sustained1 Resilients increased revenue

& revenues organic revenue growth early by 30% …
outperformance and throughout the recession
and on revenue in recovery
Speed
Early & hard Resilients moved faster, harder Reduced operating costs by 3x
moves on productivity; preserved and moved 12-24 months earlier
growth capacity …
M&A activities Resilients divested more during Divested by 1.5x in the downturn
outperformance the downturn and acquired more & acquired 1.2x in the recovery …
Discipline
in the recovery
De-leveraging Resilients cleaned-up their Deleveraged ~5% pts. higher

outperformance balance sheets ahead of the before the trough
downturn
1 Resilients only lost 1% of organic revenue vs. 2007 level during 2009

Resilience
6 steps toward end to end Resilience plan
01 02 03
Identify and prioritize key Develop tailored scenarios Conduct stress testing of
risks financials
Identify and prioritize key macro, Develop company specific scenarios Stress test the P&L, Balance Sheet,
sector and company idiosyncratic risks based on the range of outcomes of the Statement of Cash Flows to assess
based on exposure and impact highest priority risks and frame the potential gaps for
planning
04 05 06
Establish portfolio of Set up a cash war room / Build the resilience
interventions dashboard dashboard
Identify an end to end portfolio of Improve cash transparency and Build the dashboard of key leading
interventions and trigger points implement tighter cash controls to indicators to monitor that can be
mitigate downside scenarios dynamically updated

Resilience
Bubble size represents typical cash impact
Receivables Inventory Payables Cross-cutting
Typical EBIT impact

(% of cash release)
6
Enforce late “Structural changes”
payment interest
Positive to Stoc segmentation, E2E customer
neutral reorder algorithm credit risk mgmt
5
(≥ 0%) Payment and Automate reorders,
Example Collect overdues billing runs payments, billings
4
prioritization “Immediate cash
opportunities” Bad payors
Standardise
parts
of initiatives
Payment terms Reduce
Somewhat 3 re-negotiation Production SKUs
negative batch size,
related to (1-5%) Reorder freeze,

smaller batches
Inventory pooling just in time
Outsource some
2
cash
Factoring production
“Fast but receivables Supply
painful” chain
Not Exhaustive Substantia Sell
inancing
l 1 old
(>5%) Write off stock
old stock1
0
Fast (< 90 days) Medium (3-6 months) Slow burn (6-12 months)
Time to cash release

3
Return
Create a detailed plan to return the business back to
scale quickly

Return
Companies should be prepared for the “return”

Look for some of the following…
Sustained decline in the number of cases in your area without rebound
Decline in cases No community transmission / very low levels in your area
Relaxation of shelter-in-place / quarantine orders

Health response ready Testing widely available with fast turnaround
Availability of antibody testing – available workforce who have immunity

Herd immunity (will take time) Availability of an effective vaccine (Spring 2021 soonest)
Then start thinking about…

Controlled access to all job locations: mandatory temperature checks, hand-washing
Protect employees Targeted measures based on job function and “risk profile” instead of blanket shutdown
Invest in a “safe environment”: pre-flight tests of passengers and crew for airlines, in-store
Reassure customers sanitizers for retail, transparent safety record e.g. “X days since last infection”
Diversify supply chain and critical vendors to different geographic locations

Restore supply chain Explore contractual features like take-or-pay to pool risk while rebuilding demand
Consider the effects of business interruption or work-from-home – what business practices

Reinstate or revise? should be reinstated, revised, or even removed?

4 5
Reimagination
and reform
Re-imagine the “next normal”—what a discontinuous
shift looks like, and implications for how the
institution should reinvent.
Be clear about how the regulatory and competitive
environment in your industry may shift.

Reimagination
Reimagination: Could we
really emerge in a new normal?
Why this could be possible
The facts today (examples) How this may evolve

‘Shelter at home’ moves are causing the largest A self-sustaining recession may occur if governments
demand drawdowns modern economies have seen are not able to respond effectively to the new threats
in decades that economies face
The virus spread, and public health and economic The speed and effectiveness of countries response
response vary widely across countries today could reshape political and economic relationships
globally
Consumers are recalibrating on spend, having When consumer demand returns, it may be for
experienced a new model of lower in-person & even different categories than what existed previously, and
higher virtual connections, while learning new skills virtual services could get adopted far faster than
originally expected
Doctors are pointing to the inherent challenges of The world may move closer to a more community or
providing hospital-centered care during pandemics patient centered model of healthcare, aided by newer
advances in AI, health monitoring, telemedicine

Reimagination
Resetting to new
Needs appetite for big moves
normal is hard
Much like resilients’ research,
our research on companies more
broadly (Strategy Beyond the
Hockey Stick) shows that most
M&A Reallocation Capex
companies (80% of all
corporations) did not add Conduct deals adding Reallocate 50% of Top 20% in sector on
to 30% of market cap capital among BUs capital spending per
economic value beyond their over a decade over a decade unit of sales
cost of capital
Only 8% of the companies
studied were able to
successfully move towards
adding economic value
consistently
Productivity Differentiation
The ones that did so, did it
Increase productivity Increase gross margin
through 5 moves that may be to be in top 30% of to be top 30% of
critical for companies to consider industry industry

Reform
Reform: What does the “day after” look like?
The need for Will healthcare go through a regulatory driven reform movement,
similar to the financial sector after 2008/09 financial crisis?
governments to
intervene could drive
How will pre-existing concerns on trade barriers play out in the post-
meaningful changes to COVID environment?
regulatory environment
across sectors globally To what degree will bailouts of sectors come with conditions that
meaningfully change the landscape of that sector in the future?
Will concerns around supply chain resilience spur a large-scale

nearshoring or en masse qualifications of other suppliers, partly a
result of regulatory and government considerations?
Will the twin trends of remote work and gig economy mean that a move
towards a new organizational social contract is accelerated,
with new regulatory implications for worker rights?

Nerve center
Managing across the 5Rs requires a new
architecture based on a team-of-teams approach.

Managing across 5Rs requires a new architecture: Nerve Center
“Team of teams” with clear roles, responsibilities, and decision authority
Team 1 - Discover Team 2 - Design Team 3 - Decide Team 4 - Deliver

Scenario planning team Strategic moves team Integrated operations team Workforce, SC, customer, cash
Maintains multiple scenarios; Uses planning assumptions (& Maintains operating cadence, risk Ensures extreme clarity & builds
provides one planning scenario. scenarios) to craft trigger based maps, situation reports, tracks a cross-functional team to
Facilitates future state exercises portfolio of strategic moves progress, and ensures ownership achieve outcome
Owns Owns Owns Owns

Reform Resilience • Timing & facilitation of Resolve
Input to Reimagination strategic decision-making Return
• Reimagination Input to Input to
• Resolve • Resolve • All 5 Rs
Divergent / creative thinking Divergent / creative thinking Mix – Divergent / convergent Convergent / linear thinking
5% 5% 10% 80%
of Nerve Center capacity of Nerve Center capacity of Nerve Center capacity of Nerve Center capacity

Managing across 5Rs requires a new architecture: Nerve Center
“Team of teams” with clear roles, responsibilities, and decision authority
Decide COVID-19 board sub-committee
Integrated operations Advisory Panel

Elevated decision authority Epidemiological
Operating cadence COVID-19 leadership team Economic/ Business projections
Risk maps and situation reports Political
Technology response Legal
Scenario planning Strategic moves Workforce Supply chain Customer Cash and financial
Planning scenario Portfolio of Actions (incl. protection and stabilization transparency and stabilization
Issue maps strategic moves; productivity Supplier engagement support 13 week cash workout
immediate, medium-
Policies and Inventory management Customer outreach Account Receivables &
term, long-term)
Management Production and B2B customer Payables
Leading indicators
Two-way operations transparency Inventory
(decision triggers)
communications Demand management On-site customer Procurement
Contractors Logistics protection Organization
Facilities management Balance Sheet
Tech and security restructuring/ external
backbone funding
Health and govt.
engagement
Remote work morale +
productivity
Discover Design Deliver

Leaders should expect Nerve Center to evolve as crisis shifts
Basic structure and operating principles remain unchanged, but leadership time dedication changes
Reform
Reimagination
Return
Resilience Starts to become
critical post the earliest
Resolve phase of crisis, as well
as once early signs of
Most critical post the
a return begin to
earliest phase of the
Gets most leadership reappear
crisis (once the extent
attention in early of impact is clearer,
phase and rate of new news
Can be integrated into slows down)
‘day to day’ operations
over time

Contents
01 02 03 04 05
responses

Supply chains are being disrupted around the world, Impact High
but the full impacts have not yet been felt Medium
Low
Supply—production Logistics—transportation Customer demand
or or
Situation ~80% plants restarted 1.4M idle containers 60% China flights suspended5 60% truck staff available 20.5% decline in retail sales
today Across China, ex-Hubei, with large 5.5% of global container capacity Commercial flights account for ~50% 1–14 day quarantine- and capacity- China consumer sentiment since
enterprises restarting, albeit with affected by reduced demand of air cargo capacity, some airlines induced increase in freight transport January sharply lower;
partial capacity, at much higher rate converting flights for cargo6 times online/express deliveries up
than smaller ones
66% BDI increase 2x TAC index MED MED

Baltic Dry Index1 66% higher since TAC index rate +27% for U.S.– Demand for express last-mile Europe and U.S. sentiments
CLNY3 but at 10% lower levels China, +93% EU–China2, +37% delivery has spiked in China due to evolving, but localized
compared to March 2019 China–U.S., and +45% for China– quarantine and social distancing
EU since CLNY3
What MED 7,000 TEU/week reduction 5% global air traffic decrease4 High High
to expect Parts and labor shortages leading to Volumes will return as factories Decline in capacity available due to Trucking capacity constraints in Demand slump may persist
further supply chain disruptions (e.g., restart, may see peak for restocks travel ban on commercial flights China likely to ease
decreased production capacity) Inventory “whiplash”—7–8 weeks for
Future capacity 2.3% reduction for a YoY global air freight belly capacity Declines at U.S. ports foreshadow auto, 2–4 weeks for high-tech
Other regions will be facing Asia-U.S. route from May due to sea reduction of 14% in March 20204 declines in U.S. intermodal (rail)
production capacity reductions Inventory hoarding and demand
freight alliance revisions
Rates likely to continue to increase spikes due to uncoordinated actors
Customer pressure for prioritization
exacerbate supply chain
MED
Impact on freight will take an extended period of time to correct with slower ramp-up
Logistics capacity returns but faces constraints; near-term price increases
1.Assessment of risk premium to ship raw materials on a number of shipping routes, data as of 3/13 4. Estimated prior to implementation of EU-US travel ban
2.Frankfurt (FRA) to Shanghi (PVG) used as a proxy 5. Commercial flights from China
3.End of extended Chinese Lunar New Year holiday (2/7-3/13 for BDI, 2/10-3/2 for U.S.–China 6. Companies such as Cathay Pacific and Singapore Airlines now starting
TAC, 2/10–3/9 for other TAC routes) to fly empty passenger aircrafts as dedicated cargo planes
Source: Baidu, WSJ, Bloomberg, Alphaliner, Quartz, TAC index, IATA, Seabury Consulting, A.P. Moller-Maersk Group of Denmark, Agility Logistics, Press search McKinsey & Company 48
COVID-19 Leading indicator dashboard for China

Tracking toward economic restart
Hubei impact China economic restart China consumer confidence

How deep is the impact, and when could economic activity When could economic activity restart in China (ex-Hubei)? When will Chinese consumer confidence and purchasing activity
restart? return?
Late Hubei remains deeply impacted; return to Late Restart has begun, especially for larger Q2 Consumer spending in China spend may lag behind
economic activity tough to foresee until companies, despite challenges such as labor economic restart
Q2 mid Q2 Q1 shortages and movement of goods
Tourism and some other sectors impacted well into Q2
Labor availability Return to work index

(movement of workers (largest manufacturing Air Earliest Example consumer
Recovery Daily infection Crude case to major industrial cities by output in pollution PMI Congestion school behavior metrics
milestones rate, per million fatality ratio1 provinces)2 mainland China3) (NO2 level) manufact. in major cities5 restarts (anecdotal)
Steady decline in 8% 14pt Retail passenger car

confirmed cases 8 12 56% sales down 78% in
Jiangsu 02/25 decline in decline Shenzhen
61% February
28 31 Beijing4 in Feb
New suspected and ~0.02
~0.02 ~4.6%
43% 16
confirmed cases 8 18 Beijing Smartphone sales
rates consistent Shandong 03/03 26% 63%
expected to be down
11 54 decline in
with other 38% 40% Q1
provinces Shanghai4 Shanghai
4 19 58% 3
Zhejiang 03/10 Sales decline of
Quarantine lifted 13 63 50% 86% for mid and
~1x >4x Nanjing
51% high end hotels
Public transport 7 21 12
Guangdong 03/17 6%
resumes 17 69 Wuhan Food & drink spend
47%
down $60 billion in
Factory activity January & February
returns to pre- ~0.02
outbreak levels ~1.1% 03/24/2020 Hubei 03/25/2020 Started with online lessons
Same day 2019 China ex-Hubei (avg.) Same day After March 31
TBD
Hubei China other Small businesses face more labor disruption
(avg.)
Source: WHO Situation Reports; National Bureau of Statistics of China; McKinsey Global Institute; OCED data, Johns Hopkins CSSE, press research, TomTom traffic index, Baidu QianXi, CDC, New York McKinsey & Company 49
Times, Reuters, The Economist, Peking University, HSBC Business School, Tencent News, Sina News, Beijing Environmental Protection Monitoring Center, Shenzhen Environment Network
COVID-19 leading indicator dashboard Click on buttons for more detail

Propagation of COVID-19 across new transmission complexes
Europe
Americas
Asia (ex-China)1
Middle East2
1.Includes Western Pacific (excl China) and Southeast Asia WHO regions
2.Eastern-Mediterranean WHO region
Note: All countries and regions have documented 3rd-generation cases
Source: WHO situation reports, TomTom traffic index, Baidu QianXi, CDC, IATA, BBC, New York Times, Japan Times, NPR, Reuters, press search McKinsey & Company 50
Middle East
Example
country Epidemiological Indicators7 Economic/policy indicators
Number of
Number of airlines
Date of Total New cases countries/ suspending
initial number in last 14 Crude case territories service to Traffic School
case of cases days 5-day new case trend fatality ratio1 restricting travel country3 congestion4 closures
1,411
1,046 966 1,028
23,049 15,007 7.3%6 142 x9 Data N/A Country-wide
Iran 02/20 1,237
678
359 348 429
Rest of region 02/15 4,166 3,630 195 1.3%
Current phase CDC travel health notice Traffic congestion5
Stage 1: Small number of cases identified; no sustained local transmission Stage 4: Case growth and stretched Warning level 3 03/25/2019
health systems Alert level 2 03/25/2020
Stage 2: Disease spread and sustained local transmission
Stage 3: Government action and shifts in public behavior. Not all affected regions Stage 5: New cases drop, activity None
enter stage 3, but interventions and economic impact signal prolonged recovery resumes
Source: WHO Situation Reports, TomTom traffic index, Baidu QianXi, CDC, IATA, BBC, NYT, Japan Times, NPR, Reuters, press research McKinsey & Company 51
Europe
Example
Number of
Number of airlines
6,557 5,560
5,322 4,789 x 18 60 Country-wide
Italy 01/31 63,927 53,778 5,986 8.6%6 143
13
3,794 71
France 01/25 19,615 17,841 1,834 1,598 1,821 1,525 3.4% 126 Country-wide
9
7,324
4,438 59
Germany 01/28 29,212 27,916 2,801 3,140 3,311 0.3% 127 Country-wide
23
4,946 3,646 4,517 46
3,431 2,833
Spain 02/01 33,089 31,450 5.2% 123 Country-wide
8
5,503 5,253 5,420 5,582
3,448
Rest of region 01/29 43,014 40,112 1.2%
Americas
Example
Number of
Number of airlines
16,354
10,5915 69 Local
US 01/23 42,164 41,468 3,355 4,777 1.0% 111
0
9
1,837
Rest of region 01/27 7,280 7,069 772 829 808 977 0.9%
Asia (ex-China)
Example
Number of
Number of airlines
239
Prior to 147 x 13 Country-wide
South Korea 9,037 1,282 98 64 76 1.2% 141 Data N/A
01/20
77
Prior to 46 50 43 39
63
Japan 01/20 1,128 560 3.6% 119 Country-wide
47
47 52
32 40 60
Singapore 01/24 507 341 23 0.4% 117 Not noted
24
542 617 630

Prior to 473
339
Rest of region 01/20 4,161 3,826 1.1%
COVID-19 Stage Detail
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Epidemio- Small number of cases Disease spread and Disease spread widely Case growth and New cases drop, while
logical identified sustained local and sustained local stretched health surveillance continues
indicators No sustained local transmission transmission systems to monitor subsequent
transmission waves
Economic No significant impacts Minor impact, primarily Government Consumption slump Consumption begins
indicators on supply side interventions are and inventory to rise, as quarantine
instituted, impacting “whiplash” due to begins to be rolled
consumption quarantine measures back
Inventory hoarding due
to uncoordinated actors
exacerbating supply
chain
Social Activity remains normal Governments may Shifts in public Larger numbers of Social activity begins
indicators begin coordinating behavior begin in citizens remain at to resume
containment activities response to and multi- home in response to
Activity remains mostly sectoral government the implementation of
normal actions gov’t contingency plans
Source: WHO Pandemic Stages McKinsey & Company 55

References
COVID-19 leading 1. Case fatality ratio calculated as (deaths on day X) / (cases on day X). Previous versions of this dashboard
indicator dashboard calculated CFR =
for China (deaths on day X) / (cases on day X–7) to account for incubation
2. Measures movement of population into destinations as of 3/22/2020
3. Wuhan included only for comparison
4. 7-day average (17-Mar to 24-Mar) compared to 2019
5. Car traffic only. Congestion reflects percentage increase in travel time compared to free-flow conditions
Region-specific 1. Case fatality rate calculated as (deaths on day X) / (cases on day X). Dashboards before February 29
details calculated CFR as (deaths on day X) / (cases on day X–7) to account for incubation
2. Assessment based on observed stoppage in growth of cases and medical community’s opinion validated
by external sources
3. Anecdotal reports of airline suspensions based on press searches
4. Based on representative cities: Tokyo, Singapore, Milan, Paris, Berlin, Madrid, Los Angeles
5. 0 new reported cases in US on 3/22 likely a reporting anomaly and not indicative of overall trend
6. Crude case fatality ratio likely to fall as testing becomes more widely available
7. Epidemiological data current as of 3/24 WHO situation report
Note: All countries and regions have documented third-generation cases

Covid 19 Facts and Insights March 25 V3.ashx

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Covid 19 Facts and Insights March 25 V3.ashx

Încărcat de

Drepturi de autor:

Formate disponibile

COVID-19:

CONFIDENTIAL AND PROPRIETARY

COVID-19 is, first and foremost, a global

Companies around the world need to act promptly.

Read more on McKinsey.com

The situation now Actions that institutions can take

McKinsey & Company 3

McKinsey & Company 4

The global spread Impact >380,000 >16,000

The virus has spread Europe

worldwide despite Total cases >195,500

containment efforts China

Total cases >81,500

Total cases >1,000

Total cases >56,000

1,000-9,999 reported cases Total cases >1,800

100-249 Total cases >4,000

Source: World Health Organization, Johns Hopkins University, McKinsey analysis

Greatest share of recent cases comes from Europe,

Countries begin with similar trajectories

Days since 100th case

South Korea: Rigorous investigation of outbreak clusters

Number of reported cases

Feb 4 – Feb 9, 16 – Feb 24 –

China: Rapid lockdowns were employed to manage

Number of reported cases per day

Number of reported cases

Western countries are largely instituting the “Early China

Contain and restrict movement Test, track, and isolate

McKinsey & Company 13

The Imperative of our Time

1 “Timeboxing” the Virus

Scenarios for the economic impact of the COVID-19 crisis

Partially effective Highly effective

Knock-on effects and economic policy response

Scenario A3 Virus contained

108 China -3.3% -0.4% Q4 – 2020

87 Eurozone -9.5% -4.4% Q1 – 2021

2019 2020 2021

1. Seasonally adjusted by Oxford Economics

Scenario A1 Muted Recovery

China -3.9% -2.7% Q2 – 2021

World -6.2% -4.7% Q3 – 2022

85 Eurozone -12.2% -9.7% Q3 – 2023

2019 2020 2021

1. Seasonally adjusted by Oxford Economics

What business leaders should look for in coming weeks

Depth of disruption Length of disruption Shape of recovery

McKinsey & Company 19

McKinsey & Company 20

Market capitalization has declined across sectors, with

Apparel, Fashion & Luxury

Aerospace & Defense

Air & Travel

Other Financial Services

and companies that have delisted since

Source: Corporate Performance Analytics, S&CF Insights, S&P Global

Chemicals & Agriculture

Apparel, Fashion, & Luxury

Transport & Infrastructure

Healthcare Facilities & Services

Electric Power & Natural Gas

Food & Beverage

Relaxation of shelter-in-place / quarantine orders

Availability of antibody testing – available workforce who have immunity

Diversify supply chain and critical vendors to different geographic locations

Consider the effects of business interruption or work-from-home – what business practices