Strategic Study Of Financial Value Chain

In the past twenty years, with the development of theory of value chain, themanagement of the theory has a significant impact on the financial management.Theory of Value chain support new concepts, for study financial management; andsupport an effective tools to analysis and to make decision for financial management.Based on the impact of the value chain theory on the financial management and theconcern for financial strategy theory derived from the value chain, the essay apply thisanalytical method to exploit the potential resource of Sino-platinum metals Co.,Ltd(Referred as SPM later) and optimize and better the financial strategy of SPM. Theanalysis covers both the precious metals industry, SPM lived in, and the inside andoutside circumstance of SPM. The financial strategy derived from the value chain ofSPM is the following. Financing strategy is to widen the financing channel andoptimize the capital structure, it means not only financing via the traditional method,such as issuing additional stocks、allotting stocks、bank loan、bill financing, but alsofinancing by the innovative method and technology to reduce the cost of financing、control the financing risk and enhance the status、reputation and efficiency in thefinancing market. The key element of investing strategy is to elevate the corecompetitiveness of precious metals industry. The stock option allocation model via theEconomic Value Added (EVA) plays a material role in the profit allocation strategy.The financial strategy derived from the outside value chain includes the following.Regarding to the choice of cooperative partner to illustrate the value chain,complementary advantages is the principle. The horizontal cooperation objects are theother precious metals processing enterprises、 trading enterprises and recyclingenterprises while the vertical cooperation objects are the resource-based enterprisesand crucial strategic customers, which is in order to reduce the cost of raw materialsefficiently and regard the channel control as the principle. In terms of the joint pricingstrategy, follow the requirement of market principle and the win-win principle. As to the value chain of life cycle investment strategy, it should enhance the financial riskmanagement、concentrate funds to invest、withstand the financial risk and focus on themotivation and endogenous sources of fund when there is the allocation.After the construction of the financial strategy, it is essential to draw up the safeguardmeasures in detail in the budget management、information construction、financial riskprevention and evaluation of financial indicators to make sure the implement offinancial strategy.