The Financial Strategy Choice Of Poly Real State

Enterprise life cycle theory describes the cyclical process of enterprise from generation to death. Scholars generally agree that enterprise life cycle is mainly divided into four stages, which respectively is initial stage, growth stage, maturity stage and decline stage. At every stage of the enterprise life cycle, the risks of enterprise are different. At the same time, there are changes in the overall strategy,organizational structure, external policies and economic environment. Enterprise needs to adjust financial strategy according to the features of each stage, and to make it adapt to the fierce competition in the market for more profit.For initial-stage companies, there are few sales channels, much money pressure,and both financial and business risks, enterprises should take prudent financial strategy during this period, which makes a place in the market as the main target and relies on sound financial strategy to ensure the capital turnover. In growth period, the enterprises have broadened the channels of access to resources, so they should take expansionary financial strategy, which actively expands the market share and enhances the core competitiveness. In the mature period, the enterprises have lots of money through the early struggle, but the profit margins of the main products are losing momentum. The enterprises should adopt diversified financial strategy,which increases the investment portfolio and changes financing tools to find new economic growth point while reducing the cost of capital. Into recession, all kinds of business in the enterprises began to shrink. The bank lending capacity is going to decline. At this time the companies should adopt defensive financial strategy,which strips non-value added activities and adjusts the industrial structure and human resources to ensure the viability of the enterprise.The real estate industry has long production cycle and the big construction cost.In recent years, the government has continued tightening macroeconomic policy in the real estate sector. Also, the uncertainty of the market environment has increase. Many smaller real estate enterprises whose capital access to the plight is poor are on the brink of bankruptcy. Thus, there is not only the unique nature of the real estate industry, but also the obvious sensitivity on the change of policy environment. The managers need to be careful with every strategic decision.Based on the background above, this article attempts to study the choice of enterprise financial strategy from the perspective of enterprise life cycle theory and chooses Poly Real Estate as the object. This paper analyses its influence factors,specific content and implementation effect of financial strategy choice in different life cycle stages to expect to provide some suggestion for the sustainable development of real estate enterprises from successful cases of Poly Real Estate’ financial strategy choice.First, through the collection and interpretation of the literature, this article is fully aware of the Chinese and foreign scholars studies about financial strategy from ancient to now,which lead to "periodic" as the important research perspectives.What’s more, it mainly analyzes the relationship between the content of enterprise life cycle theory and the financial strategy. Second, this article elects out the representative - Poly Real Estate whose development process is long, comprehensive strength is strong and brand is senior from the real estate industry as the research object. Combined with the discussion of theoretical part before and the operating effect reflected by company data, it thoroughly analyzes the selection of its financial strategy, and concludes some successful experiences for other enterprises to learn.This dissertation is divided into five parts.The first part elaborates the background of the thesis and the significance for other scholars and enterprises. Then, by extensive collection and interpretation of literature, it concludes that the analysis of financial strategy is roughly divided into three categories, and pointed out the idea of this article, methods, and the whole framework.The second part introduces the concept of financial strategy choice, clear the strategic position of financial strategy, summery up the main content of financial strategy, and lastly introduces enterprise life cycle theory and its influence on enterprise financial strategy choice to lay a theoretical foundation for follow-up study of Poly Real Estate case.The third part briefly introduces the company’s profile and development course,and then the main factors influencing the Poly Real Estate financial strategy choice are analyzed. Finally it sums up the Poly Real Estate in the growth period is adopted to accelerate the expansion of financial strategy, in the mature period is adopted to diversified financial strategy.The fourth part analyses the effect of Poly Real Estate financial strategy, mainly from the company’s growth and maturation stages in the enterprise performance level,market performance and development ability analysis of Poly Real Estate financial success of the strategic choice.The fifth part is the conclusion and enlightenment of this case study. Poly Real Estate financial strategy choice, on the whole, fits the development of the industry in the economic cycle, based on the risk characteristics in different stages of the life cycle,to achieve the economic growth in different stages of the life cycle. This case gives a lot of inspiration for the real estate enterprises’ managers.