Tech Giants Respond to Coronavirus Related Delays

Tech Giants Respond to Coronavirus Related Supply Chain Delays
Tech Giants Respond to Coronavirus Related Supply Chain Delays

More than just a spreading localized epidemic, the coronavirus is creating serious infrastructure challenges for some big-name international brands. Most recently, Microsoft announced that its supply chain is being negatively affected by the outbreaks, delaying some shipments and other operations.

One of the biggest sectors hit for the massive international technology company is the supply chain for Windows and Surface. As a result, the company announced that it did not expect to meet revenue goals for this quarter. Speaking to stakeholders, Microsoft CFO Amy Hood was circumspect, saying the revenue forecast was off due to “the uncertainty related to the public health situation in China.” Read: delays due to the coronavirus epidemic.

Hood was, however, specific about which lines were impacted, specifically indicating the personal computing segments, including Windows OS products and Surface laptops and mobile devices. Hood also said the Xbox gaming line, which is independent of these others, was not affected.

Microsoft is not alone in making these kinds of announcements related to supply chain issues in China. Recently, Apple spoke with investors, telling them to expect the company would not meet second-quarter projections due to the coronavirus outbreak as iPhone production was temporarily stopped.

While Apple says all affected manufacturing facilities have reopened, the company added that production is not yet up to standard levels, and that getting to those levels would be a process. Apple spokespeople said that demand for iPhones was also down, especially in China, as many retail stores were closed or have been operating at reduced hours due to the outbreak.

One of the key PR lessons here is to get out in front of the story, and to offer clear facts before any associated narrative spins out of control. Apple and Microsoft don’t want investors hearing about these “delays” or “temporary manufacturing shutdowns” from the popular media, because that can create a domino effect that leads to an outsized reaction.

Companies in these situations need to be able to present a clear, cogent, and proactive message that briefly but coherently explains what’s happening, why, and how that’s being addressed. If there are delays, why are there delays, as well as what specific products or services are affected and which will not be? What’s the company’s plan to address these specific issues?

In answering this question, the plan should be as specific as the description of the challenge. Saying “we’re working on it” does not inspire confidence. In this case, both Microsoft and Apple have presented specific challenges and specific answers to address those challenges. That’s the best way to deliver bad news.

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