Research On The Working Capital Management Of Liquor Companies Based On OPM Strategy

Working capital management is one of the most important aspects of an enterprise’s daily business activities,which ensures the long-term development of the enterprise.However,in the process of working capital management,there are various capital problems such as insufficient funds,inefficient use and restricted channels.At this stage,many enterprises choose to use OPM strategy to solve the working capital management problems such as slow turnover and shortage of working capital,to improve the efficiency of their working capital utilization and to strengthen the management of working capital.OPM strategy can not only amplify the advantages of the company’s own channel,but also enable the company to use it as the basis to maximize the bargaining power with the upstream and downstream of the supply chain,so as to occupy the capital of others and make the operating capital cost lower or even zero.For liquor companies,the complex economic situation at home and abroad and the emergence of the "new crown epidemic" have had a serious negative impact on the working capital turnover of liquor companies,resulting in Poor sales,inventory backlog,cost overlap and tight cash flow.In order to improve their working capital status,it is increasingly urgent for liquor companies to improve their working capital management strategies.This paper selects Luzhou Laojiao,a leading company in the liquor industry,as the subject of this study to analyze its working capital management based on the OPM strategy,with a view to identifying problems in the application of the strategy and providing reference experience for other liquor companies to use the OPM strategy to manage their working capital.Firstly,we analyze the development background and working capital management of the liquor industry,summarize the characteristics of working capital management in the liquor industry,and explore the feasibility of using OPM strategy in liquor companies.Second,the company profile of Luzhou Laojiao is introduced,the specific measures of Luzhou Laojiao’s OPM strategy are analyzed based on channel theory,and the effects of Luzhou Laojiao’s OPM strategy on working capital management are evaluated based on the factor and channel perspectives,and it is found that Luzhou Laojiao’s OPM strategy on working capital management has accelerated the turnover of accounts receivable,improved the working capital management capacity of marketing channels,and overall Luzhou Laojiao has improved its working capital management level.Again,the problems of Luzhou Laojiao’s OPM strategy are analyzed,including excessive idle capital,the need to strengthen inventory management capabilities,the deterioration of the relationship between suppliers due to over-utilization of their funds,and the focus on expanding the scale of the industry to the neglect of working capital management capabilities in the procurement and production channels.Finally,targeted recommendations are made to address the problems in Luzhou Laojiao’s use of OPM strategy.In implementing the OPM strategy,liquor companies should pay attention to(1)improving the efficiency of idle capital use;(2)strengthening training for inventory managers;(3)optimizing supplier relationships;(4)establishing a marketing budget system;(5)promoting an intelligent and accurate production model;and(6)building a full financial sharing center and strengthening the link between supply,production and marketing channels.For other companies in the liquor industry,Luzhou Laojiao’s working capital management after applying the OPM strategy has some reference value,but it should be emphasized that each company has its own uniqueness,and companies should choose a working capital management method more suitable for their own situation rather than blindly following the trend.It is hoped that this paper will provide a theoretical basis and reference for future research on working capital management in liquor companies using OPM strategies and enrich the literature in this field.In practical terms,it will provide reference for the case company Luzhou Laojiao and other enterprises in the liquor industry to improve their working capital management,which will improve the overall working capital management level of liquor enterprises and promote the healthy and long-term development of liquor enterprises.