Study On Mismatch Of Working Capital Term Under Competitive Strategy

In recent years,the situation of China's iron and steel industry is grim,many large-scale iron and steel production enterprises are difficult to operate and even suffer losses,such as WISCO."Big but not strong" has become an obvious feature of the development of China's iron and steel industry.There are a series of problems in the iron and steel industry that seriously restrict the healthy development of China's iron and steel industry.For example,serious overcapacity,low quality level of high-end products,low market share,independent innovation capacity to be strengthened,etc.In the case of the overall environment of the industry is not optimistic,whether the enterprise strategy can be implemented smoothly and continuously affects its life and death.In the process of strategy implementation,the management of working capital can not be ignored.Working capital is just like the blood flowing in an enterprise.Every link from purchase,production to sales is inseparable from working capital management.It has made great contribution to how to allocate capital,effectively cooperate with the implementation of strategy in the organization,maintain and improve the company's long-term profitability and realize value-added.But throughout history,there are many cases of accelerating company bankruptcy due to poor working capital management.Therefore,how to give full play to the effect of working capital management to make it meet the needs of enterprises has become a widely studied problem in theory and practice.In this paper,a series of competitive strategies and working capital term mismatches of Fangda special steel,a typical company in steel industry,are analyzed and studied in the form of cases.According to the data provided in the financial report of Fangda special steel from 2009 to 2018,this paper analyzes and studies the necessity and feasibility of the working capital management mode of Fangda special steel based on the management mode of working capital under its competitive strategy.First of all,the strategic pattern recognition and the mismatching of workingcapital term at the corresponding time are analyzed to determine whether the strategic type of the case company and the mismatching of working capital term are affected by the environment.Secondly,the proportion of current liabilities,the proportion of current liabilities and the proportion of non current liabilities are evaluated and analyzed.It is calculated that during the implementation of the strategy,there is indeed a funding gap between 2009 and 2016 for Fangda special steel.In this case,in order to invest more capital in strategic development,enterprises also have no choice of safe but high cost long-term loans.Therefore,the enterprise adopts the management mode of radical term mismatch of working capital.That is to say,in the process of the implementation of the competitive strategy,when Fangda special steel has capital demand and cannot meet it,it is necessary to adopt the management method of working capital term mismatch.Finally,using the F-score model to analyze and evaluate the feasibility of working capital term mismatch under the competitive strategy.Through this study,it is found that the reason why Fangda special steel's profitability and development level can be ranked in the forefront of the industry is not only the single reason for adopting the term mismatch of working capital,but also the guidance of pure and correct strategy.Under the guidance of correct strategy,Fangda special steel seizes the opportunity to occupy the market and achieve the strategic goal faster than other enterprises.It can be seen that the correct strategy and working capital term mismatch are complementary.