The expectations of the Armenian business sector in 2021
For a moment, let’s get back to the end of the 2019 year when we were full of hopes and had big plans for the oncoming year. However, 2020 turned out to be a period of great losses and global disaster. For Armenia, it was the year of trials, the time to make conclusions, to become quickly oriented and ready for any changes. In the business sector, 2020 filtered out the organizations that were in the most vulnerable groups and not ready to face the crisis. Now, at the end of 2020, leaving behind the war, the epidemic, and the damages caused by them, having an unstable political atmosphere in the present, it is difficult to imagine the future perspective. We’ve interviewed the representatives of the Armenian business spheres and found out their expectations, vision and plans for the oncoming year.
Arara Tour, Board member Avetiq Ghukasyan
Before the pandemic and war, there was tourism in Armenia, one of the fast-developing and promising spheres, going in the right direction. Global pandemic first paralyzed tourism and related areas: hopes and plans to recover were delayed with no end date. Still, Arara Tour, with the great potential realizing not only in Armenia but in the South Caucasus and Central Asia, had all the chances to recover soon and get back in the game.
The war changed the rules of the game, and even those companies that were already implementing anti-crisis strategies had to completely change their plans. Avetiq, a board member of Arara Tour, shared his expectations and plans for 2021.
What are your plans, expectations, vision, and priorities for the coming year? What strategy do you plan to apply in your business next year? Will you go the way of reducing resources or the way of investment?
“In 2020, tourism in Armenia “died with the death of a hero”. The sector had a hope to recover after the pandemic, but the war and the current political situation in Armenia question the future of the entire sector of incoming tourism. Being dependent on the ambitions of foreign powers, such as Turkey and Russia, it is difficult to maintain an optimistic mood. If we talk about incoming travel companies, we should definitely implement the strategy of reducing resources, minimizing costs, and even bringing to zero some of them. In case the business has free resources for investment, of course, it is necessary to go the way of investment, as at present there is a vertiginous decrease in prices, and it is possible to make a profitable deal. The investments will help alleviate the crisis, hoping that in a couple of years tourism will be recovered in the country and we will have seasonal tourist inflows”.
What is the role of the country? Are there any changes that can help businesses overcome the crisis of 2020?
“The business that has expectations from the state has no future. One thing to be expected from the state is relevant laws. With the rule of law in the country, businesses won’t need anything else. If the laws do not work at any level, it is twice as difficult for businesses to survive in normal conditions, and in a crisis, it will be absolutely impossible. Today, more than ever, Armenia depends on external forces: Russia, Azerbaijan, and Turkey. The problems mostly relate to external forces rather than internal ones (of course, it doesn’t mean the government had no role in this situation). That is why it is difficult to have any expectations from the state or to expect that at this stage we will have some reforms to overcome the crisis of 2020”.
In the days of the economy, twice hit by striking conditions, what strategy should the business sector implement to mitigate the impact of the crisis?
“The anti-crisis strategy means, first of all, taking a different approach. The business must implement crisis management, reduce unnecessary expenses, and even minimize current expenses. While you could “afford” yourself not to worry much about prices before the crisis, now you have to be very careful with every expense, such as advertising costs, marketing, bonuses, and even monthly fixed costs.
Another way to mitigate the crisis and find new ways of developing business is reconsidering your role in the market, market expansion, and search for new markets. And finally, the pandemic showed us the possibilities of the online world. Those businesses that want to survive should start adapting to changes and use online solutions to the maximum, which not only speed up the business services but also reduce costs”.
Is the statement true that there are business opportunities for the entrepreneur in any conditions, even in times of crisis?
There is no definite answer to this question. Everything depends on the nature of the business. If you offer a luxury product, which is consumed in a narrow segment it will be difficult to maintain the business in the conditions of this global crisis. For example, today housing prices are collapsing, prices are falling, and unfortunately, no anti-crisis strategy can help businesses survive without a consumer. On the other hand, in the conditions of the pandemic, delivery services, and online stores developed. Even those businesses that had no delivery started offering delivery to survive the lockdown.
Any crisis is a chance and requires a creative approach. Japan proved by its example that the crisis may have a positive impact on business because only in times of crisis you understand the gaps of business, inefficiency, and unnecessary expenses. A creative approach will help to overcome the crisis and to have a considerable advantage over competitors. If you do not have a working anti-crisis strategy, you will fail. Unfortunately, we cannot apply the example of Japan in Armenia, not only because of the mentality and business approach but also the post-war tension and political instability that may become a wall for any new activity”.
Digital Caramel, CEO Arsen Sultanyan
The IT sphere proved to be the most stable one during the global crisis. The ability to mobilize and work remotely allowed companies to save resources to survive the crisis. With the scope of activity mostly implementing on the international markets, Digital Caramel managed to keep its positions. Still, with the unstable present condition and controversial forecasts for the future, it is important to find out what are the plans and expectations of the company. His thoughts and expectations for 2021 will share the Chief Executive Officer of Digital Caramel Arsen Sultanyan.
What are your plans, expectations, vision, and priorities for the coming year? What strategy do you plan to apply in your business next year? Will you go the way of reducing resources or the way of investment?
For next year, the key focus of our business will be on the foreign market. We will try to apply those strategies, which will allow accelerating and strengthening the growth of the company. With KPIs set for 2021, we are willing to provide tangible and sustainable progress during the next year. The main goal will be to implement the necessary tools and strategies, to eliminate the gaps in the internal mechanisms so that we can compensate for last year’s losses.
In 2021 we expect economic-political stability, those changes and reforms in the state’s policy that will bring even shocking changes in the economy and allow getting quick results. At the moment, in my opinion, we should focus on short-term solutions that will let the country overcome the crisis, and only then there will be time to think about long-term projects and solutions.
What is the role of the country? Are there any changes that can help businesses overcome the crisis of 2020?
We do have expectations from the state, and in this reality, businesses need support more than ever. The losses in 2020 were catastrophic for the economy, and no economy can survive without taxes. In this light, the state, in its turn, must consolidate resources to be able to provide support to various areas of business. Hopefully, the impact of the coronavirus will be weaker in the coming year, and even if it is not eliminated, the business sector, including tourism, has already managed to adapt to the new reality and to expand its activities, taking into account global changes. In this regard, the state can take certain steps to attract foreign investment. Of course, we must be ready for the fact that both the tourist flow, the economic activity, and the investments will be incomparably less in the new year. Yet, even one positive change and support from the state can be useful.
The state should develop major strategies to support the business sector with both short-term and long-term solutions. Priority strategies are the policy of searching for foreign markets, facilitating the entry of entrepreneurs into foreign markets, and paying more attention to agriculture and food security. If before the crisis there was a tendency leaving agriculture and entering the business sector, now we are expecting the reverse process. In this case, the state should support agriculture so that we can get a quality harvest for export.
To sum up, the state should start providing support through closer contacts and focus on the weak points of each of the spheres. In the next two years, it is necessary to stimulate the economy through quick solutions and restore activity; otherwise, we will face a hopeless situation. Business activity means income and taxes, the activity that will give us a country of a different quality.
In the days of the economy, twice hit by striking conditions, what strategy should the business sector implement to mitigate the impact of the crisis?
In the coming year, all businesses should focus on the foreign market, of course, if the services provided or the product offered allows them to enter the international market. Businesses that create new products for domestic consumption should definitely start looking for ways to enter the foreign market, even if it requires some investment, adjustment of activities, upgrades for a new product. In short, the goal of a business should be strategies and mechanisms that will allow ensuring a presence in the international market. There are two possible reasons for switching to a foreign market. First of all, the local market is not so big; the consumption is that large to make businesses work self-sufficiently and develop. Second, we are expecting a crisis in the next few years, which will lead to a decline in consumer purchasing power. In such conditions, it will be difficult to work only for the local market. Exports are very important for the macro-economy, for bringing money from abroad, and for the stability of the national currency.
Is the statement true that there are business opportunities for the entrepreneur in any conditions, even in times of crisis?
Any crisis creates new opportunities for the business and entrepreneur. For example, large companies with strong positions are more vulnerable to a crisis. They find it more difficult to reduce expenses, change the venue, reduce the staff, and, as a result, they quickly lose the reserved resources. Meanwhile, smaller companies and startups are eventually in a safer position. The crisis is an opportunity for new businesses to enter the market, competing not with powerful companies, but with those who have already weakened their position and lack resources. The crisis can be considered a starting point, where beginners have a chance to become a competitor at the expense of adopted strategies and flexibility, even to gain an advantage. There are business opportunities in times of crisis.
Today those who had plans to start a new business before the pandemic and war, and delay not being sure about the current situation, do have a good chance to place profitable positions. Let’s make it clear; if there is a crisis with a weak competitive market, it is the right time to enter the market.
Aries Lunch, CEO Hasmik Barkhudaryan
For years Aries Lunch has been offering high-quality lunch meals in most busy districts of Yerevan. Being a stable functioning business, they entered 2020 and faced months of lockdown. Just like the rest of the country Aries Lunch started recovering and getting profit after the lockdown and then faced the war. Thus the sphere that directly depends on the activity of customers and other businesses was once again paralyzed. Hasmik Barkhudaryan, Co-founder of Aries Lunch, is now sharing her experience of facing a crisis and vision of overcoming it in 2021.
What are your plans, expectations, vision, and priorities for the coming year? What strategy do you plan to apply in your business next year? Will you go the way of reducing resources or the way of investment?
“The coronavirus opened our eyes and forced us to soberly analyze business at all levels and reflect on the new reality. In such a force majeure situation, we redefined the existing business models and redistributed resources to save what we still had. We will follow the path of saving resources, and we do not plan investments at the moment. The main goal of the coming year is to use the available resources to get benefits. Unfortunately, the expectations for 2021 are not much; assessing the current situation, we realize that 2021 will be a doubly hard year for the economy. Of course, this is my subjective opinion based on close contact with the business environment. I hope the precise analysis will give more positive predictions.
In the new year, we will focus on online sales and developing new products, which will be in greater demand on the online platform. We have already started the process of development, have carried out branding, and now we are in the phase of developing the online platform. Soon we will be able to present it to the public”.
What is the role of the country? Are there any changes that can help businesses overcome the crisis of 2020?
At this point, we don’t have any expectations from the state․ Aries Lunch took part in the 20th activity aimed at minimizing the pandemic’s adverse economic impact. Of course, for the business that suffered such losses, that support could hardly change the situation. Moreover, those activities had such multi-level filters that it was almost impossible to meet the conditions to be part of the project and get financial support. In my experience, there was no business and no entrepreneur that got state financial support. Speaking globally it is difficult to imagine the mechanisms by which the economy, being in crisis for months, may quickly recover. We must be ready for difficulties and prepared to endure this turning point.
In the days of the economy, twice hit by striking conditions, what strategy should the business sector implement to mitigate the impact of the crisis?
It is difficult for a business to survive alone without state support, and we are not talking about financial support at all. The current legislative policy does not encourage business activity in any way. It is the right time for the state to create an environment that will allow businesses to develop within the country and not simply look for opportunities in foreign markets. It will never work if the government waits for the business to come out of the crisis alone and bring the state out of the crisis. To support and work together, the state may, for example, reduce taxes for some sectors, or set a low-interest rate on loans for businesses, reduce income tax for new jobs, and so on. In fact, there are a thousand ways to create favorable conditions to help businesses out of the catastrophic situation. Mutual help will eventually bring the whole country out of the paralysis.
The internal and external political situation that changes day-by-day does not allow businesses to develop a single strategy and focus on it. It is necessary to show maximum flexibility, which will allow mobilizing resources and solving problems on the spot.e
Is the statement true that there are business opportunities for the entrepreneur in any conditions, even in times of crisis?
Definitely! Any difficult situation or problem has at least one solution. The crisis is forcing businesses to orient themselves quickly. The positive side is that the businesses that survive the crisis in more favorable conditions will develop faster. Of course, we can save resources, wait out the crisis, or even give up on the business, but we can also accept this crisis as a challenge.
ProDigi, Ceo & Co-Founder Aida Vopyan
ProDigi digital marketing agency is yet another valuable resource in the Armenian IT sphere that faced the crisis of 2020; even as the safest field, it still couldn’t stay aside from dramatic changes happening in the country. It is utterly important to find out the perspectives of the IT sphere, the strategy, and expectations of ProDigi for the coming year. Aida Vopyan, Ceo and Co-founder of Prodigi, is sharing her vision.
What are your plans, expectations, vision, and priorities for the coming year? What strategy do you plan to apply in your business next year? Will you go the way of reducing resources or the way of investment?
The main strategy of the company for 2021 is to improve already existing services. Innovations and creative solutions are key skills in Production & digital marketing. You can attract the user, who receives thousands of different types of information daily, only through a fresh and value-added approach. Therefore, we will give a lot of space to innovations, both in terms of products (Video Production, SMM, Paid Advertising, Branded Games), management, and customer care. In 2021, we plan to present our already successful video production and SMM cases at various international festivals, digital events, and share our success with those interested in the field. With the main goal of improving already implemented values, we will continue the investment policy to expand the range of activities and market presence.
What is the role of the country? Are there any changes that can help businesses overcome the crisis of 2020?
I wish the state would pay more attention to those businesses who outsource services and would facilitate a more efficient organization of this process; for example, implementing new simplified payment systems or supporting separate industry cooperation with different countries.
In the days of the economy, twice hit by striking conditions, what strategy should the business sector implement to mitigate the impact of the crisis?
In the current situation, I think businesses should rely on decentralization; any company can face and withstand a crisis with correct and operative management decisions. Moreover, depending on the services provided and the segment belonging, the business should be maximally diversified. Our organization was able to overcome the difficult situation created in 2020 at the expense of diversification. At present, we are developing ProDigi in several different directions, each of which has its development prospects and opportunities.
Is the statement true that there are business opportunities for the entrepreneur in any conditions, even in times of crisis?
Yes, I am quite sure. And I can confirm it not only theoretically, but also based on practical experience. The crisis of 2020 has created many development opportunities for our organization. We could grow not only in the terms of adopting professional skills and knowledge but also launching new and successful international cooperation.