A Research On Financial Strategy Of ZTE Corporation

With more than 30 years of reform and opening up,China's economy has kept developing at a remarkably high speed and has made great achievements.At the same time,in order to improve the current situation of extensive growth,the pillar industry of leading the economic development of our country will be gradually transformed from traditional manufacturing industry to new high-tech industry.In the national policy boost and huge market demand,communications equipment manufacturing industry will usher in a very favorable opportunity for development.But it still faces severe challenges.The competitive advantage and core competitiveness of enterprises are derived from technological innovation,which requires substantial and sustained funding as a guarantee,so companies need to develop appropriate overall strategy and financial strategy as a support for technological innovation activities.Therefore,the success of financial strategy directly related to the survival and development of enterprises.It is necessary and urgent to study the corporate financial strategy of the communications equipment manufacturing industry.In this paper,the combination of normative research and case study were used.Firstly,the relevant literature of strategic management theory and financial policy theory are sorted and summarized and the meaning and content of the financial strategy are explained,which provides a theoretical basis for financial strategy research.Next,the focus is on the analysis of ZTE's relevant financial data for the past six years.The study found that the company suffered a loss in 2012,with the development of the company into a trough.However,since 2014,the company's operations gradually improved.The above phenomenon is seen as the entry point of this article.Combined with the company's overall strategy adjustment,the reasons for the financial problems that occurred before 2014 and the corresponding financial strategy correction are explored and the corresponding implementation and improvement of the financial strategy are specifically analyzed.The analysis shows that ZTE 's overall strategy adjustment does not have a significant impact on investment strategies,financing strategies and profit distribution strategies.But after that,the enterprise began to pay attention to the formulation and revision of working capital management strategy and cost control strategy.From a financial perspective,these two financial strategies played a significant role for ZTE's profit-making.So this article mainly in-depth analysis of these two financial strategy.Then the implementation of ZTE's financial strategy was evaluated through the EVA value and some suggestions were made about its strategy especially the two mentioned earlier.Finally,the conclusion is that the improvement of ZTE's financial strategy is one of the main reasons for improving its financial position and cash flow and improving its profitability.The company can continue with the financial strategy because of its good implementation effect.But some aspects need to be improved such as foreign accounts receivable management,sales cost control and R & D quality.In the framework of strategic management theory and financial strategy theory analysis,through the case analysis of ZTE,the characteristics of financial strategy of communication equipment manufacturing were analyzed clearly,which has a certain reference to the formulation of financial strategy of communication equipment manufacturing enterprises.