Economic Interdependence: Responses to Economic Challenges

Big Idea: Scarcity of resources necessitates economic trade-offs.
Framing Questions:
- What factors influence business decisions?
Overall Expectation: Students will explain the criteria that governments and firms in Canada use to weigh trade-offs and make economic choices.
Specific Expectation E2.3: Students will explain business decisions that may be taken in response to economic challenges and/or fluctuations.
Success Criteria: (Not provided in the transcript)

Due to an unprecedented drop in commercial passengers, airlines canceled up to 90% of their scheduled flights.
Despite lockdowns affecting nearly half the world's population, consumers continued to order goods online, maintaining the global flow of goods.
Passenger airlines typically generate 10-15% of their revenue through cargo.
With few passengers and baggage, significant cargo capacity became available.
Airlines like Air Canada, WestJet, Virgin Atlantic, Lufthansa, United, and American Airlines switched to cargo-only flights.
Empty passenger cabins were used to transport essential items, including groceries and healthcare provisions.

To better serve customers and protect employees, some grocery stores banned customers from entering.
These stores transformed into "dark stores" or order fulfillment centers.
Dark stores allowed grocers to fulfill pickup and delivery orders more quickly compared to using distant fulfillment centers.

Hotels faced near-empty occupancy, while many work-from-home employees lacked adequate space and quiet.
Hotels began offering day rates for remote workers as a solution.
For as low as $29 a day at some locations, remote workers could access a private hotel room turned office suite, equipped with fast internet and a quiet atmosphere.
Some hotels launched a "Student Support Program" for displaced students, offering a 30% discount and a $25 Amazon gift card for essential goods.
European hotels converted some rooms into temporary hospital wards to meet the growing demand for hospital beds during COVID-19 surges.

Simple trips to the grocery store became more challenging.
Restaurant revenues dropped over 50%.
Restaurants had access to fresh produce and needed a revenue stream.
Restaurant chains, including Panera, California Pizza Kitchen, and Subway, began selling fresh groceries.
Customers ordered items like fresh vegetables, meat, eggs, and even beer for pickup alongside their restaurant orders.
The services guaranteed customers could get needed grocery items and provided a much-needed lifeline to restaurants.

Essential workers became recognized as a new type of superhero during the COVID-19 pandemic.
Mattel unveiled a new line of Fisher-Price action figures featuring delivery drivers, grocery store workers, and healthcare professionals.
This pivot showed Mattel's understanding of who people are supporting and honoring during this time.

Cruise, the autonomous car division of General Motors, reactivated its self-driving cars to make food deliveries around San Francisco for two local food banks.
Initially, self-driving cars were deemed non-essential and were not allowed on the roads under regulations.
Helping the organizations freed up food bank workers to better serve clients and allowed Cruise cars to be on the roads.

With customers barred from entering many stores, brands pivoted to offer curbside pickup for online and phone orders.
Many retailers, including DSW, Michaels, and Best Buy, quickly created pickup stations outside of stores, allowing employees to deliver items without contact with customers.
Curbside pickup provided work for employees and ensured customers could get the items they needed.

Gyms and fitness companies had to get creative with their physical locations closed.
Goodlife, L.A. Fitness, and 24 Hour Fitness live-streamed exercise classes and released at-home workout plans.
Fitness apparel company Under Armour hosted a 30-day Healthy at Home fitness challenge to encourage customers to stay active.
Technology kept gyms connected to customers while everyone exercised at home.

The Target app broke records for the number of daily downloads.
Before the pandemic, it saw an average of 25,000 downloads per day.
After Target integrated Shipt’s grocery delivery service and as people sought new ecommerce options, its daily downloads doubled to 53,000 per day.
Papa John’s expanded its digital ordering capabilities by launching Facebook Instant Ordering.

Scenario: You own a chain of local cafés. Due to a sudden recession, fewer people are eating out, and your sales have dropped 40% over the last 3 months.
1. Identify the economic challenge in this scenario.
2. List 3 possible decisions you could make to respond (e.g., reduce hours, introduce cheaper menu items, offer delivery).
3. Choose the best decision and explain why you think it’s the most effective (5–6 sentences).
4. Predict one risk or downside of this decision.