Research On Financial Strategy Of Latecomer Firms In Beyond Catch-up

"Surpassing catch up" refers to the mode that enterprises rhythmically get rid of the constraints of the existing technology trajectory,surpass the existing catch up trajectory,and seek revolutionary innovation and development with a higher,wider and more forward-looking technology vision and layout,that is,the whole process of enterprises from following,running parallel and then leading.With the suppression of China’s science and technology field abroad,it is urgent for China’s high-tech enterprises to catch up with foreign enterprises.Faced with the complex development environment at home and abroad,a number of latecomers have risen rapidly to surpass and catch up,and even become explorers in the field of "no man’s land".Among them,.The process of enterprises surpassing and catching up is a process of continuous technological breakthroughs and iterations,but also inseparable from the financial strategy of enterprises,which provides important support for their realization of surpassing and catching up.This paper selects Hangzhou Hikvision Digital Technology Co.,Ltd.(hereinafter referred to as Hikvision),a latecomer enterprise with a leading position in the security industry,as a case study to analyze the supporting mechanism for the financial strategy of latecomer enterprises to surpass and catch up.Taking literature analysis and single case analysis as research methods,and mainly based on the key events in the development process,this paper divides Hikvision’s surpassing and catching up process into three stages: catching up stage(2001-2009),domestic leading stage,domestic leading stage(2010-2015)and industry leading stage(2016 present).Next,the financial strategy of Hikvision in the above three stages is analyzed,and three findings are drawn:(1)the strategic goal of the catch up stage is to catch up with and become a leading video surveillance equipment R & D and manufacturer in China,so the expansionary financial strategy is adopted,which is manifested in the direct financing mainly through bank loans and capital markets.;The investment strategy is mainly to support the investment strategy construction of video surveillance video equipment and digital surveillance camera industrialization projects.;Dividend distribution remains stable-a stable dividend distribution strategy in which the annual cash dividend is not less than 10% of the distributable profits of the year.(2)The strategic goal of the leading stage in China is to surpass catching up with foreign enterprises and become the leading supplier of overall security solutions in the gradual upgrading industry,so it adopts a robust financial strategy,which is mainly manifested in internal profit financing and external debt financing strategy;We will continue to support the construction of industrialization projects of video surveillance and video equipment and digital surveillance cameras,attach importance to the investment in innovative business of R & D centers,and pay attention to the continuous investment in the construction of global marketing systems,whose financing is mainly based on external commercial credit.Investment strategy;In addition to investing in existing business,the medium with an average annual dividend distribution rate of 32% also expands its investment scale by investing in intelligent innovation business.Dividend distribution strategy.Mainly high stock dividends.(3)The strategic goal of the industry leading stage is to maintain the leading position in the industry and become an intelligent Internet of things provider and big data service provider,so it adopts an expansionary financial strategy,which is embodied in internal financing and external short-term and medium-term debt financing;Supporting the investment and construction of security industrial base,opening the investment plan in the central and western regions and the intelligent business of R & D centers,its financing strategy is mainly a combination of internal profit retention and external financing,investment strategy;The average annual dividend distribution rate is 50%,which remains stable and the dividend distribution strategy.Mainly high cash dividends.This paper reveals the role chain of financial strategy,surpassing catch up and enterprise performance,and finds that financial strategy supports enterprises to surpass catch up,and enterprises to surpass catch up bring enterprise performance.Based on this,the performance of Hikvision in the three development stages is evaluated from the two aspects of target achievement and financial performance.The study found that in the catch up stage,Hikvision adopted an expansionary financial strategy to develop rapidly,supporting enterprises to complete the catch up with domestic enterprises.In the leading stage in China,Hikvision has adopted a steady financial strategy of steady innovation,on the one hand,it has steadily developed its traditional video surveillance business,on the other hand,it has actively sought new profit points to catch up with foreign enterprises.In the leading stage of the industry,Hikvision has adopted an expansionary financial strategy,actively explored cutting-edge technologies in the industry,and maintained its leading position in the industry.Finally,by using the financial strategy matrix to analyze the leading stage of the industry,it is found that Hikvision’s financial strategy also has some problems,such as lagging performance of innovative business and risk of capital gap.Therefore,it is suggested that Hikvision should do a good job in pressure regulation and early warning of business investment at the current stage,and maintain an appropriate scale of expansion and investment,which is conducive to the sustainable development of enterprises.Based on the above findings,countermeasures and suggestions are put forward for Hikvision’s "no man’s land exploration" and other late developing enterprises to catch up with the development.