Research On S Corporation Working Capital Management Based On The Channel Theory

Working capital is known as the "blood of corporate mobility" and is a fund for the continued operation of an enterprise.It is extremely liquid,volatile,and revolving,and is vital to maintaining the normal operation of the enterprise.Working capital management is complex but necessary for any business that wants sustainable development while expanding steadily.The current process of economic globalization is accelerating,and traditional working capital management methods are no longer sufficient for companies in a fiercely competitive market.Channel working capital management theory can be enriched and developed,and then widely used by enterprises.The footwear industry is one of China's traditional pillar industries and plays an important role in the national economy.As a highly market-oriented free competition industry,with the gradual narrowing of China's demographic dividend advantage,the overall capacity supply exceeds demand,and market competition is fierce.On the other hand,the rapid development of new technologies and the rapid rise of emerging channels(e-commerce platforms and shopping malls)have forced traditional shoe companies to re-arrange the sales network and adjust the channel structure to adapt to the new business model.Under the tide of reform,to win development opportunities and not be eliminated by the times,enterprises must strengthen working capital management and improve operating efficiency while enhancing core competitiveness.Company S was the earliest women's shoe company listed on the A-share market in China,but the company's working capital management effect has been poor in recent years,which can be seen from its high inventory.This article starts from the management theory of channel theory,and uses literature research method,case study method,qualitative and quantitative analysis method and comparative analysis method;based on related theories such as channel relationship,supply chain management and customer relationship.By combing the company's operating financial status and channel working capital management,it is found through data that the company's financial status is not ideal,and there may be problems in some aspects of the company's working capital management.This article summarizes the working capital management strategies of S company based on channel theory,which implements a flat management method and a vertically integrated business model,optimizes supply chain management,and actively builds a new retail platform to transition to light assets.: Procurement channels make heavy use of commercial credit,production channels use OEMs to reduce channel capital occupation,and sales channels establish multi-channel models.Based on the analysis of the current situation of the company's working capital management based on channel theory,this paper finds that the company's working capital management has the following three main problems: one is the long-term occupation of upstream channel funds;the other is the serious backlog of inventory goods;three It is the weak collection ability of marketing channels.And believe that the main reasons for the existence of these problems of S Company are: First,it ignores the establishment of a win-win relationship with suppliers of procurement channels.In order to reduce the working capital cost of the procurement channel,relying on the power advantage in the channel relationship,extensive use of commercial credit,neglecting the construction of a “win-win” alliance relationship;the second is the failure of scale expansion to close a large number of stores,poor sales inventory backlog.After listing on September 3,2014,the store expansion of terminal retail outlets was accelerated.It is hoped that through large-scale sales channel expansion,brands can penetrate into consumers' hearts as soon as possible,and realize the company's large-scale development and rapid profit growth.Due to store expansion,product inventory increased significantly.Because of neglecting marketing or brand building and lack of market competitiveness,sales volume has shown a downward trend in the face of fierce market competition.Although the store has been continuously closed,it has had little effect;Shop “dependence.From 2014 to 2017,the sales revenue of S Company from store to store accounted for more than 60% of total operating income.Sales receivables were continuously occupied by downstream customers,and gradually became difficult to collect.In the end,this article proposes improvement countermeasures to find out the reasons.It is suggested that S companies can strengthen cooperation with channel members in terms of strengthening information sharing with purchasing channel members,establishing a “win-win” incentive mechanism for suppliers,and rational use of credit terms.Win-win relationship construction;Improve the information network,use big data analysis to scientifically guide store expansion;Improve brand effects and enhance product market competitiveness;Optimize marketing strategies,improve product marketing capabilities,etc.to optimize channel design;Expand brand collection stores,reduce Proportion of “shop-in-shop” in self-operated department stores;adjusting the sales structure and increasing the direct sales of e-commerce to optimize the structure of sales channels.This article conducts a case study through S Company,which is known as “China's First Women's Shoes”,analyzes the working capital management status of the company's various channels,finds out the factors that affect the efficiency of S Company's working capital management,and proposes suggestions for improvement.It is hoped that the research on this enterprise can give reference and inspiration to more similar enterprises.