The Financial Strategic Analysis Of The Traditional Retail Business Transfer To O2O Mode

Under the backdrop of strong development of e-commerce, traditional retailers have begun to seize the O2O transition market to get rid of financial difficulties and the crisis of declining performance. Effective use of funds plays an integral role in supporting the corporate strategic transformation and the movement of funds is the main subject of financial planning strategy. Therefore, a reasonable financial strategy plays a key role in guaranteing the success of strategic restructuring of enterprises. Thus, an in-depth study of the transformation of the traditional retail financial strategy has important practical significance to traditional retail strategic transformation. In this paper, traditional retail giant Suning Appliance enterprise transformation O2O mode was selected as a case study. We analyze the formulation and implementation of financial strategy during the transition process, and evaluate the financial rationality of financial strategy through the investigation of financial performance trends, by using a combined method of the theoretical interpretation and case analysis method. The conclusion of this study can be a useful reference for the relevant company and provide an inspiration for the industry enterprises that intend to make strategic transformation.The main work and conclusions are as follows:(1) The external environment and internal environment for the Suning Appliance transformation were analyzed by using the PEST analysis and SWOT analysis. We found that Suning Appliance’s development strategy and its current transformation strategy coincides with each other, which show that the transformation to O2O characterized by "cloud provider" model is appropriate and reasonable.(2) Though the operating performance during the process of transition, it is still in line with expectations. Decreased profitability and asset management ability and the increased risk of debt reduced capacity appear owing to rapidly rising costs introduced by the large amount investment and financing costs during the beginning of the transition. With the gradual deepening of transition and achieving certain efficiency, the profitability and development capacity has improved.(3) The financial strategy of Suning Appliance’s effectively supports the strategic transformation. In details, the rapid expansion of investment strategies match the fundamental strategic transformation; aggressive financing strategies lead to higher debt service pressure, while also ensuring the financial needs of large-scale investments; moderately reasonable profit distribution strategy not only match the investment strategy, but also maintain the interests of shareholders and creditors.Based on the above conclusions, some issues that need to be pay more attention in the formulation and implement of financial strategy during the transition process were further discussed and some inspirations were obtained.