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Impact of COVID-19 on business strategy

What assets are being used less?

Author: ICAEW

Published: 23 Feb 2021

As a consequence of COVID-19, many businesses will have assets that are currently not being used or are underused. When reviewing their business strategy boards will need to consider the consequences. Below are some areas to consider when thinking about what to do with your underused business assets and what it means for your balance sheet.

Tangible fixed assets

Tangible fixed assets such as offices or vehicle fleets are highly visible and their current usage might be well known in the business. But the financial and strategic implications might be more difficult to assess. Relevant questions boards should consider include:

  • How many of your assets do you actually own outright?
  • Are there opportunities to implement ‘sale and leaseback’ agreements to free up capital to support your business, if it is necessary and appropriate?
  • If you are considering the termination of existing leases, perhaps for high street stores or office buildings, what are the financial and reputation costs of doing this?

There could be environmental implications of running assets below minimum capacity, eg where it is not possible to scale back utilities bills despite fewer members of staffs working a shift in a manufacturing plant. This could adversely impact the organisation’s commitment to carbon neutrality. Identifying and/or accelerating capital investment programmes is one way to reduce these environmental impacts.

Tangible assets – inventory

Changes to working practices or demand during the pandemic may have affected how inventory is managed or drawn down. Obsolete items may be sitting in inventory. Boards should consider:

  • Have you reconsidered what an appropriate stock of components is for any products you make?
  • Will you be able to sell your inventory of work in progress and finished goods or will it need to be disposed of?
  • How will you identify any obsolete items? Will they be picked up in inventory counts?

Intellectual property

Changes to business models and activities may impact on patents, copyright and other intellectual property assets. These might not be obvious without further investigation. The board should consider:

  • Do you have intellectual property that could be impacted by changes to the business?
  • How will it be used in a post-COVID world?
  • Even if intellectual property remains relevant, will any patents and similar devices expire before they can be used again?
  • Should you consider licensing them in less-affected markets to reap some benefit from them?

Financial assets

The board’s appetite to business risk may have changed since the UK entered lockdown, the consequence of this could be a desire to hold more (or reduce) cash and liquid assets. Without intervention these practices could continue longer than necessary. A review of financial assets could ensure that good financial management supports recovery:

  • Are your liquid assets genuinely liquid?
  • Will you be able to convert these into cash as required and at a reasonable rate?
  • What do movements in exchange and interest rates mean for your investments and cash? 
  • Is your business susceptible to negative interest rates? 
  • Would realigning the assets to better fit expected cashflow needs?
  • Are there interventions you can make, such as buying currency forward, that would mitigate risk?


Decisions taken about viable business lines, access to government support and contract obligations might have implications for current staff. Now may be a good time for boards to invest in training and upskilling staff while they are less busy or on furlough. In the latter case this may be essential to avoid skills deteriorating while away from the business. Questions boards should consider when reviewing their businesses’ personnel are:

  • Does your organisation need new skills to support its post-COVID strategy that can be recruited now?
  • Have supply constraints eased for existing skills so that people could be brought into the organisation in readiness for a post-COVID world?


Changes in business strategy, as a result of COVID-19, could have an impact on data and compliance with privacy regulations such as GDPR (EU and UK). Depending on the viability of business lines data may no longer be required by new business models or closures of lines of business. Under GDPR a business must not keep data that is no longer needed or use it for purposes other than those it was originally processed for. There could be an opportunity to invest in advanced data analytics to identify potential risks/opportunities.