The Research On Capital Operations Of Jiangsu Five Star Appliance Ltd

Five Star, a key player in China's home appliance industry has finished the process of capital accumulation, business expansion, mergers and acquisitions, and restructuring in just more than one decade. It occupies 30 percent of the domestic retail sales market and has created astonishing wealth effect for the national economy. Through analyzing the expansion and capital arrangement model of China's home appliance retail firms, this article fully displays how pseudo-banking mode can boost the expansion and value creation of chain stores.First, this article will introduce the basic concepts and theories related to the expansion and cash management of chain stores. In addition, it will also discuss the background and factors determining this industry's pseudo-banking mode, characteristics of its operation, and both positive and negative sides of this mode.Second, through case studies of the development of one specific home appliance chain store-Five Star, this article describes the practical operation and general development of pseudo-banking mode in firm expansion. With detailed data, this article also tests the expansion effect and firm evolutionary roadmap brought about by this mode. Additionally, this article displays the intrinsic drawbacks and risks associated with this mode, and highlights the importance of expansion of sales and profitability increase to the smooth functioning of pseudo-banking mode.Finally, based on the evolutionary trajectories of home appliance industry and the experience of Bestbuy, this article tries to realistically foresee the future trend of pseudo-banking mode, discusses aspects related to sales and profitability capabilities of firms, and how change of operation mode will influence the daily operation and cash management of firms. It also tests the conclusions.This article analyzes the expansion of home appliance retailing industry from the perspective of value creation theory, corporate finance risk avoidance theory, firm expansion theory, and pseudo-banking theory. With pseudo-banking theory as the main topic, from the perspectives of consumers, manufacturers, and retailers, this article also studies the factors determining the origins, development, stagnation, and evolution of the home appliance retailing industry with consideration of external environments and special industry characteristics in different phases. The abundant facts and data used in this article are all from the most representative firms in this industry. This enables the empirical results of this article to offer very important implications to practitioners.