The Financial Strategies Analysis Of Wal-Mart Under The Financial Crisis

Strategic management attracts more and more attention because the operating environment is becoming more complicated and more variable. From the eighties, people started to rise the financial research to the level of strategic. As an important component of business strategy, financial strategy will help enterprises solve the financial management efficiency, allocation of the financial resources rationally, to maximize sustainable profitability of the enterprises. Wal-Mart's success is closely related to the support of the financial strategies.The evolution of corporate strategy, mainly passed through the four processes of the strategic planning theory, environmental adaptation theory, industrial organization theory and core competencies theory; the financial strategy and corporate strategy is closely related. and analyzes the meaning and classification of the financial strategy. The financial strategy is a series of strategic events that the enterprises took to achieve the goal of sustainable value-added business value. This paper argues that the success of the financial strategy can be achieved not only with the value-added business value, but also in the financial strain that can enhance the capacity and ability of the enterprise to cope with economic fluctuations, so that the value-added can be sustainable. Financial strategy is divided into funding strategy, investment strategy, dividend distribution strategy and working capital management strategies from the content, and into expansionary financial strategy, sound financial strategy and defensive type of contraction type financial strategy from the aspects of risk preference. Previous research of the financial strategy were mainly concentrated in the field of theory, this paper chose a typical case to analysis the financial strategy the field of practice. Wal-Mart's success has aroused the concern of the majority of experts and scholars, but its financial strategy has not been given due attention. This paper argues that Wal-Mart's financial strategy should be learned by China's enterprisesWal-Mart is in the stage of growth of the business life cycle. Its own capital has been increasing, its assets have been expanding, and the profit margins of total assets has been low. For financial strategy, Wal-Mart has taken the expansion financial strategy which is fit for the corporate in the stages of growth. For the strategy of fund raising, Wal-Mart mains to maintain the target capital structure, it uses the internal funds, while actively using the external debt capital and extensively uses the business credit and short-term liabilities; for investment strategies, Wal-Mart mainly applies integrated investment strategy, expanding business horizontally, vertically building partnerships with the suppliers, and maintain long-term growth and sustainable growth of investment less the same; for the dividend distribution, Wal-Mart selects he residual dividend policy which is the best choice for the corporate in the stage of growth, to the way of dividend, because of the high profitability's support, Wal-Mart selects high cash dividend and stock buy-back combination of dividend distribution; for working capital management strategies, Wal-Mart selects tight working capital management strategies and OPM strategy, reducing the cost of working capital while fully enhance their liquidity.Based on the analysis the Wal-Mart's financial strategy, bring forward the recommendations to the formulation and implementation of the financial strategy of the corporation of the retail industry in China:a. financial strategy should have long-term strategic goals, and consist with the corporate strategy; b. during the implementation process, companies should maintain flexibility; c. for the long term, the actual growth rate of enterprises should consist with the sustainable growth rate of enterprises as far as possible; d. enterprises should be cautious with diversified investment strategy, and focus more resources on its core business in order to obtain the core competitiveness.