Comparative Analysis On The Gree Electric And Midea Group’s OPM Strategy For Working Capital Management

The white electricity industry plays an important rule of the household appliance manufacturing industry,which went through not only achievement but also difficulties in recent years.Since the beginning of 2012,the white electricity industry has entered the downturn with the cancellation of national policies such as home appliances going to the countryside and trade-in replacement.After that,white electricity enterprises’ sales have fallen sharply,and stocks have piled up.Since 2015,as the industry has begun to take the initiative to inventory,accelerate the urbanization and increase the volume of real estate transactions,sales in the white goods industry have begun to pick up,reaching the best state in nearly a decade by 2017.However,enterprises’ s cost turned to huge with the increase in sales volume.The gradual increase in raw material costs,labor costs,and logistics costs led to a drop in the gross profit margin of the white electricity industry.Therefore,the effectiveness of the cost management of the white electricity industry becomes very important.Therefore,this paper chooses the OPM strategy as an entry point,and combines the management of the channels to compare and analyze the effectiveness of Gree Electric Appliances and Midea Group’s working capital management.This paper firstly elaborates the research background and significance,literature review,research content,technical framework,research methods and contribution.Then it reviews the related theories of working capital management,channel management and OPM strategy.On the basis of the previous theories,a comparative analysis of Gree Electric Appliances and Midea Group’s the operating funds management performance is based on the factors and channel perspectives;then,it compared and analyzed the working capital structure and financial flexibility of Gree Electric Appliance and Midea Group.At last,based on the above data analysis,this paper compares and analyzes the specific measures,existing problems,and corresponding recommendations of the two companies to implement the OPM strategy.This paper aims to combine the channel management with OPM as the entry point to analyze the working capital management’s effectiveness of the two leading white electricity companies,in order to find the applicable working capital management for white electricity companies.