Diversification over digitalization: a case study on the business survivability strategy of a family business during COVID-19 crisis


business survivability
COVID-19 crisis
family business

How to Cite

Strano, M. G. (2023). Diversification over digitalization: a case study on the business survivability strategy of a family business during COVID-19 crisis. Piccola Impresa Small Business, (2). https://doi.org/10.14596/pisb.3598
Received 2022-11-09
Accepted 2023-07-14
Published 2023-12-28


Purpose. The COVID-19 pandemic has led to a situation of generalised economic uncertainty. Many SMEs faced an unexpected crisis, which forced them to review their strategy. These enterprises implemented the best approach to recover and overcome the crisis. Among the different strategies that the companies realized, digitalization and diversification were among the most practised. Although both are risky and expensive, this paper wants to prove that diversifying can be more challenging and carry long-term results. This is due to nowadays attention on digitalization, which is taken for granted and considered an integral part of the business. Despite this, the diversification strategy can play a winning role, evolving the company's portfolio and creating new opportunities.

Design/methodology/approach. This is a qualitative case study focused on a small enterprise, which is a family business located in Southern Italy, and its reaction to the crisis through a diversification strategy.

Findings. The analysed enterprise initially created a different product, which gave the chance to reduce the loss of revenue and maintain the workforce. Then, the management decided to expand the product network and start a new company. As regards digitalization, it brought unexpected results.

Practical and Social implications. The study aims to increase the awareness of SME managers on the possible strategies available for SMEs in critical situations. To do so, company management should evaluate the sector, its competitors, and the availability of resources. Moreover, the case study contributes to the literature on corporate strategies applied during the pandemic period.

Originality of the study. Although digitalization has been the most used approach during the pandemic, this paper shows that sometimes even smart intuitions can make a difference in starting a new trade. The correct allocation of budget and resources and a high level of resilience are crucial for success.



AGI. (2022, January 22). Segni di ripresa: 332mila nuove imprese nel 2021. Retrieved March 10, 2022, from https://www.agi.it/economia/news/2022-01-22/imprese-crescita-ripresa-15313079/

Alatovic, T., Chhaya, M., Juneja, S., Smaje, K., & Sukharevsky, A. (2020, April 20). Driving digital change during a crisis: The chief digital officer and COVID-19. Retrieved March 09, 2022, from McKinsey: https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/driving-digital-change-during-a-crisis-the-chief-digital-officer-and-COVID-19

Almeida, F., Santos, J. D., & Monteiro, J. A. (2020). The challenges and opportunities in the digitalization of companies in a post-COVID-19 World. IEEE Engineering Management Review, 48(3), 97-103.

Ancillo, A. D. L., del Val Núñez, M. T., & Gavrila, S. G. (2021). Workplace change within the COVID-19 context: a grounded theory approach. Economic Research-Ekonomska Istraživanja, 34(1), 2297-2316.

Amankwah-Amoah, J., Khan, Z., Wood, G., & Knight, G. (2021). COVID-19 and digitalization: The great acceleration. Journal of Business Research, 136, 602-611.

Ansoff, H. I. (1957). Strategies for diversification. Harvard business review, 35(5), 113-124.

Ansoff, H. I., & McDonnell, E. J. (1988). The New Corporate Strategy. New York: Wiley.

Baig, A., Hall, B., Jenkins, P., Lamarre, E., & McCarthy, B. (2020, May 14). The COVID-19 recovery will be digital: A plan for the first 90 days. Retrieved March 09, 2022, from McKinsey: https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-COVID-19-recovery-will-be-digital-a-plan-for-the-first-90-days

Bettiol, M., Capestro, M., Di Maria, E., & Micelli, S. (2021, May 5). Come le PMI italiane stanno affrontando la crisi del COVID-19. Retrieved March 11, 2022, from SIMA - Management Notes: https://www.mark-up.it/come-le-pmi-italiane-stanno-affrontando-la-crisi-del-COVID-19/

Bettiol, M., Capestro, M., Di Maria, E., & Micelli, S. (2021). Exploring the innovation paths of SMEs to face the COVID-19 crisis: a cluster analysis applied to the Italian context. Electronic Conference Proceedings of Sinergie - Sima Management Conference, (pp. 29-35). Palermo.

Bezrukova N., Huk L., Chmil H., Verbivska L., Komchatnykh O., Kozlovskyi Y. Digitalization as a Trend of Modern Development of the World Economy. WSEAS Transactions on Environment and Development. Vol. 18. 2022. P. 120-129.

Blackburn, S., LaBerge, L., O’Toole, C., & Schneider, J. (2020, April 22). Digital strategy in a time of crisis. Retrieved March 09, 2022, from McKinsey: https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-strategy-in-a-time-of-crisis

Bloomberg, J. (Apr 29, 2018). Digitization, Digitalization, And Digital Transformation: Confuse Them At Your Peril. Retrieved Feb 24, 2023, from Forbes: https://www.forbes.com/sites/jasonbloomberg/2018/04/29/digitization-digitalization-and-digital-transformation-confuse-them-at-your-peril/

Cerved. (2021, November). Osservitalia 2021: le PMI resistono alla crisi causata dal Covid. Retrieved March 10, 2022, from https://know.cerved.com/imprese-mercati/rapporto-cerved-pmi-2021/

Confcommercio. (2020, December 28). Nel 2020 "Sparite" Oltre Trecentomila Imprese. Retrieved July 29, 2021, from https://www.confcommercio.it/-/chiusure-imprese-2020

Confindustria; Cerved. (2020). Rapporto Regionale PMI 2020. Retrieved July 04, 2021, from https://know.cerved.com/wp-content/uploads/2020/07/Rapporto_regionale_PMI_5-1.pdf

Datta, P., & Nwankpa, J. K. (2021). Digital transformation and the COVID-19 crisis continuity planning. Journal of Information Technology Teaching Cases, 11(2), 81-89.

Euler Hermes. (2021). Covid19: l’impatto sulla economia italiana. Retrieved July 04, 2021, from https://www.eulerhermes.com/it_IT/news-e-approfondimenti/corporate-news/Covid19-impatto-sulla-economia-italiana.html

Fairlie, B., & Fossen, F. M. (2021). The early impacts of the COVID-19 pandemic on business sales. Small Business Economics.

Felsenthal, M. (2020, June 08). COVID-19 to Plunge Global Economy into Worst Recession since World War II. Retrieved from The World Bank: https://www.worldbank.org/en/news/press-release/2020/06/08/COVID-19-to-plunge-global-economy-into-worst-recession-since-world-war-ii

Fonditalia. (2020). I Settori e i Paesi più colpiti dalla Crisi Economica post COVID-19. Retrieved July 04, 2021, from Magazine: https://www.fonditalia.org/settori-e-paesi-piu-colpiti-dalla-crisi-economica-post-COVID-19/

Fruehling, N., Beyer, H.-M. and Goeddeke, A. (2023), "The effect of diversification on company value during a global health crisis: evidence from the COVID-19 pandemic", Managerial Finance. (ahead-of-print)

Gkeredakis, M., Lifshitz-Assaf, H., & Barrett, M. (2021). Crisis as opportunity, disruption and exposure: Exploring emergent responses to crisis through digital technology. Information and Organization, 31(1), 100344.

Gubitosi, F. (2021, November 03). Ripresa post-Covid e crisi d’impresa: evitare i rischi, cogliere le opportunità. Retrieved March 11, 2022, from Il Sole 24 Ore: https://www.econopoly.ilsole24ore.com/2021/11/03/ripresa-covid-crisi-impres/

Guo, H., Yang, Z., Huang, R., & Guo, A. (2020). The digitalization and public crisis responses of small and medium enterprises: Implications from a COVID-19 survey. Frontiers of Business Research in China, 14, 1-25.

Hassankhani, M., Alidadi, M., Sharifi, A., & Azhdari, A. (2021). Smart city and crisis management: Lessons for the COVID-19 pandemic. International Journal of Environmental Research and Public Health, 18(15), 7736.

ISTAT. (2020). Rapporto Annuale. Retrieved July 2021, 04, from https://www.istat.it/storage/rapporto-annuale/2020/Rapportoannuale2020.pdf

ISTAT. (2020). Situazione e Prospettive delle Imprese nell' Emergenza Sanitaria COVID-19. Retrieved July 04, 2021, from https://www.istat.it/it/files//2020/12/REPORT-COVID-IMPRESE-DICEMBRE.pdf

Jacobides, M. G., & Reeves, M. (2020). Adapt Your Business to the New Reality. Harvard Business Review.

Johnson, G., Whittington, R., Scholes, K., Angwin, D., Regner, P., & Paci, A. (2017). Strategia. Orientare organizzazioni e imprese in un mondo che cambia. Milano: Pearson.

Klein, V. B., & Todesco, J. L. (2021). COVID-19 crisis and SMEs responses: The role of digital transformation. Knowledge and Process Management, 28(2), 117-133.

Lanshina, T. A., Barinova, V. A., Kondratyev, A. D., & Romantsov, M. V. (2020). Sustainable development and digitalization: the unusual COVID-19 crisis requires original solutions. Bulletin of International Organizations, 15(4), 91-114.

Lukason, O., & Hoffman, R. C. (2015). Firm failure causes: a population. Problems and Perspectives in Management, 13(1), 45-55.

Marino, L., & Capone, V. (2021). Smart Working and Well-Being before and during the COVID-19 Pandemic: A Scoping Review. European Journal of Investigation in Health, Psychology and Education, 11(4), 1516-1536.

Markides, C. C. (1997), To Diversify or Not To Diversify. Harvard Business Review. Nov-Dic 1997

Mićić,L. & Mastilo,Z.(2022).Digital Workplace Transformation: Innovative Approach After Covid-19 Pandemic. ECONOMICS,10(2) 63-76

Moreira, A. L., & dos Santos Souza, K. (2020, October). How the COVID-19 crisis differs from the economic crises in the past? Retrieved March 10, 2022, from PQE Group: https://www.pqegroup.com/blog/2020/10/how-the-COVID-19-crisis-differs-from-the-economic-crises-in-the-past/

Moore, N., Rowe, L., Stokes, P., Lichy, J., Rodgers, P., Smith, S. M. (2022) An examination of the dynamics of intergenerational tensions and technological change in the context of post-pandemic recovery. Production Planning & Control, pages 1-18.

Neamţu, D. M., Hapenciuc, C. V., & Bejinaru, R. (2019). The impact of digitalization on business sector development in the knowledge economy. In Proceedings of the international conference on business excellence (Vol. 13, No. 1, pp. 479-491).

Nguyen, M. H., Hargittai, E., & Marler, W. (2021). Digital inequality in communication during a time of physical distancing: The case of COVID-19. Computers in human behavior, 120, 106717.

Kudyba, S. (2020). COVID-19 and the Acceleration of Digital Transformation and the Future of Work. Information Systems Management, 37(4), 284-287.

Oberoi, R., Gupta, A., & Ladure, J. (2020, April 16). Can diversification help weather the coronavirus storm? Retrieved March 09, 2022, from MSCI: http://www.msci.com/www/blog-posts/can-diversification-help/01778632038

OECD. (2020). Coronavirus (COVID-19): SME policy responses. Retrieved March 03, 2022, from Tackling Coronavirus (COVID-19): https://www.oecd.org/coronavirus/policy-responses/coronavirus-COVID-19-sme-policy-responses-04440101/

Olokundun, M., Ibidunni, S., Ogbari, M., Falola, H., & Salau, O. (2021). COVID-19 pandemic and antecedents for digital transformation in the workplace: A conceptual framework. Open Access Macedonian Journal of Medical Sciences, 9(F), 41-46.

Ortega-Argiles, R. (2020, May 05). COVID-19 Diversification Measures: What Local and Regional Governments Can Do? Retrieved March 09, 2022, from University of Birmingham: https://blog.bham.ac.uk/cityredi/COVID-19-diversification-measures-what-local-and-regional-governments-can-do/

Oxford Dictionary. (2023). Digitalization. Retrieved Feb 24, 2023, from Oxford Dictionary Online:


Papadopoulos, T., Baltas, K., & Balta, M. (2020). The use of digital technologies by small and medium enterprises during COVID-19: Implications for theory and practice. International Journal of Information Management, 55.

Peñarroya-Farell, M., & Miralles, F. (2022). Business Model Adaptation to the COVID-19 Crisis: Strategic. Journal of Open Innovation: Technology, Market, and Complexity, 8(39).

Pencarelli, T. (2013). Le crisi d'impresa. Milano: Franco Angeli.

Pham, S. D., Nguyen, T. T. T., Do, H. X., & Vo, X. V. (2023). Portfolio diversification during the COVID-19 pandemic: Do vaccinations matter?. Journal of Financial Stability, 65, 101118.

Pincetti, M., Lanzillo, E., Falcone, G., & Grillo, F. (2020). I bisogni delle PMI per la ripresa post-Covid. Retrieved March 11, 2022, from Deloitte: https://www2.deloitte.com/content/dam/Deloitte/it/Documents/strategy/Bisogni_PMI_post_covid19_MonitorDeloitte.pdf

Priyono, A., Moin, A., & Putri, V. N. (2020). Identifying digital transformation paths in the business model of SMEs during the COVID-19 pandemic. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 104.

Ritter, T., & Pedersen, C. L. (2020). Digitization capability and the digitalization of business models in business-to-business firms: Past, present, and future. Industrial Marketing Management, 86, 180-190.

Robertson, B. (2020, March 20). COVID-19: Adapting and Diversifying Your Business. Retrieved March 09, 2022, from University of Chester: https://www1.chester.ac.uk/business-engagement/business-support-services/information-and-resources/top-tips-business-growth-36

Roland Berger. (2020, April 24). This Crisis is Different – Comparing the Coronavirus Crisis with the Financial Crash. Retrieved March 10, 2022, from Roland Berger Publications: https://www.rolandberger.com/en/Insights/Publications/This-crisis-is-different-Comparing-the-coronavirus-crisis-with-the-financial.html

Schilirò, D. (2020). Towards digital globalization and the covid-19 challenge. International Journal of Business Management and Economic Research, 2(11), 1710-1716.

Sostero, M., Milasi, S., Hurley, J., Fernandez-Macías, E., & Bisello, M. (2020). Teleworkability and the COVID-19 crisis: a new digital divide?. JRC working papers series on labour, education and technology (05).

Soto-Acosta, P. (2020). COVID-19 pandemic: Shifting digital transformation to a high-speed gear. Information Systems Management, 37(4), 260-266.

Stirati, A. (2020). L'Italia, l'Europa e la crisi da Coronavirus. Economia e Politica (19), 1-6.

Strauss-Kahn, M. (2020, May 5). Can we compare the COVID-19 and 2008 crises? Retrieved March 12, 2022, from Atlantic Council: https://www.atlanticcouncil.org/blogs/new-atlanticist/can-we-compare-the-COVID-19-and-2008-crises/

Swiss Economic Institute. (2021). Comparing the coronavirus crisis and the financial crisis: eight differences and similarities. KOF Bulletin (155).

Thukral, E. (2021). COVID-19: Small and medium enterprises challenges and responses with creativity, innovation, and entrepreneurship. Strategic Change, 30(2), 153-158.

Tighe, D. (2021, December 13). E-commerce increase due to COVID-19 in Europe 2020-2021. Retrieved March 11, 2022, from Statista: https://www.statista.com/statistics/1189076/COVID-19-e-commerce-growth-europe-country/

Tunisini, A., Pencarelli, T., Ferrucci, L. (2017). Economia e Management delle Imprese. Milano: Hoepli.

Unioncamere. (2022, January 21). Imprese: 332mila nuove iscrizioni nel 2021. Retrieved March 10, 2022, from Comunicati Stampa: https://www.unioncamere.gov.it/comunicazione/comunicati-stampa/imprese-332mila-nuove-iscrizioni-nel-2021

Wheelock, D. C. (2020). Comparing the COVID-19 Recession with the Great Depression. Economic Synopses (39).

Winarsih, Indriastuti, M., & Fuad, K. (2021). Impact of COVID-19 on digital transformation and sustainability in small and medium enterprises (smes): a conceptual framework. Advances in Intelligent Systems and Computing, 1194, 471-476.

Yaya, R., Suryanto, R., Abubakar, Y. A., Kasim, N., Raimi, L., & Irfana, S. S. (2022). Innovation-based diversification strategies and the survival of emerging economy village-owned enterprises (VOEs) in the COVID-19 recession. Journal of Entrepreneurship in Emerging Economies, (ahead-of-print).

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Copyright (c) 2023 Maria Grazia Strano