Analysis For Express Company's Credit Policy And Case Under Competition In The Market

Since the credit sale takes a large proportion of volume of total sale, credit control management is definitely undertaking a key role in daily management of express company. Furthermore, credit policy is the core of entire credit control system which influences the risk of financial, market share rate and profit rate etc.Network building plays a key role on the daily operations of express company, which undermines the development of express company. Thus, this dissertation is based on the case of FD express that is extending her business into Chinese domestic express business. To grasp the case, this dissertation introduces the background of Chinese express industry, FD express's background and FD express's credit control system.Firstly, at the aspect of tactic, this dissertation demonstrates how to apply the traditional four quadrant method to analyze the credit policy of FD express under the competitive environment. Secondly, at the first phase, FD express made decision on credit policy regarding the risk of financial. Under this hypothesis, marginal effectiveness on averaged collection days model is adopted on analyzing and assessing the decision made, as well as concludes advice during this course. However, this kind of credit policy is proven as a short term policy, because it causes the decrease on both of profit and sale volume. Third, at the second phase, FD express shifted her management objective from reducing the risk of financial to maximize the profit. The relevant net cash flow model was applicable on computing the optimal service price. To achieve an equilibrium state, the current service price should be moved toward the optimal service price. Therefore, the credit policy in pursuit of maximum on profit will be in consistent with the top objective of company, which is concluded as a long term credit policy.