Innovative or Exploitative: Is it Ethical for Businesses to Change and Adapt their Business Models in Times of Uncertainty?

The Coronavirus pandemic has seen many business models adapt and change in order to survive in times of economic and general uncertainty. How many different local and national businesses have you seen first-hand adapting to the restrictions? I for one have seen many different local restaurants and pubs adapt to takeaway and delivery services, and I have seen the local high street turn into a click and collect operation. Although this has been essential in ensuring our diverse high streets and communities can continue to suit our needs as consumers and citizens, it has also posed some problems to other, existing businesses, which have been undercut and even more economically impacted. This blog will explore whether it is ethical to change your business model, even when it causes implications to the wider business environment, with examples including oversaturating the business sector and undercutting other struggling businesses. The flip side to this argument is that businesses showing initiative and adapting in a unique and uncertain global environment should be rewarded with booming business, and other businesses models should also adapt their products, services and business methods in order to survive.

Will the adaptation of flower wholesalers’ business models significantly disadvantage florists’ recovery from the Coronavirus restrictions? Image: Royalty Free.

On one side of this argument, adaptation has been necessary in many different sectors, including hospitality, food and beverage and retail, in order for businesses to survive the effects of the pandemic. However, what does this mean in terms of a company’s morals, when the adaptation of their products means increasing the saturation of the market, and when their expansion and diversity indirectly causes negative implications for other existing businesses, even causing closure and liquidation? An example of this is within the floristry industry. This industry has been significantly impacted due to the Coronavirus pandemic- the lack of large events and weddings requiring floral displays have been non-existent for almost a year due to social distancing and travel restrictions, and therefore demands for floral displays for these events has been minimal. The rise in ‘DIY’ wedding flowers has increased in recent years, as a method of saving costs, however this is likely to have increased further due to the difficulties visiting physical florists, due to restrictions, and the guest restrictions currently in place- in March 2021, you can only have six wedding guests.

In light of the lack of demand for wholesale flowers from florists, some wholesale flower merchants have diversified to supply non-trade customers with wholesale flowers. Although the prices are higher than trade prices, they are much better value for customers and come directly from the source, therefore cutting out further cost and improving freshness of the flowers. Despite this being a successful example of adapting to consumer needs and adapting to the business environment, as the demand from florists has fallen due to the lack of events, this does pose an issue to the overall floristry industry. Some could view this as undercutting florists by providing consumers with a cheaper source of fresh flowers. Additionally, it could be seen as undermining the craftsmanship of florists. At a time when many local and smaller businesses are struggling to survive, it seems as though this diversification can cause implications for the industry- if you could buy flowers cheaper online, surely you would continue to do so after restrictions have lifted?

Image: Royalty free.

This does also pose implications for the wholesale companies who have diversified. Will this be a viable business model going forward, once demand from florists increases after the restrictions are lifted? Is it fair and ethical for their prior primary customers, florists, to be disadvantaged and undercut by them in the florists’ time of struggle?

Although the Coronavirus pandemic has provided an opportunity for diversification and adaptation for a number of businesses- many of which, including pubs and restaurants, would have potentially collapsed without changing their business model- has the diversification of certain businesses posed an ethical issue in accelerating the struggle of other, more traditional business models? Upon researching this in relation to the floristry sector, it is easy to see and understand both sides to the ethical argument. On the one hand, showing initiative to adapting to the current conditions and providing an alternative product to consumers is surely a great example of innovation. However, if it causes negative implications for others in the industry who are not direct competitors, but are in fact the primary customer outside of Coronavirus restrictions, is that an ethical issue? I think there is definitely an argument for this being unethical, especially if florists lose out on trade after the restrictions are lifted, as a result of this example of business diversification.

It will be interesting to see how businesses like non-trade wholesale flower suppliers change once Coronavirus restrictions are lifted, and whether there is a wider impact on the floristry sector. What do you think to this issue- do you think this has been an example of innovation or do you think this has been exploitative of florists’ struggles?

Thank you for reading!

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