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Research on the Implementation Effect of Financial Strategy in The Transformation of Shanxi Coking Co., Ltd

Project Title: Research on the Implementation Effect of Financial Strategy in The Transformation of Shanxi Coking Co., Ltd
Author: Ms. Hao Manyu
Advisor: Associate Professor Dr. Chiaoming Li
Degree: Master of Business Administration (International Program)
Major: International Business Management
Faculty: Graduate Schools
Academic year: 2020
Url:

Published:

Conference
Conference Proceedings
2nd National and International Academic Conference “Innovation and Management for Sustainability” 15-16 December 2020

Citation

Hao, Manyu. (2020). Research on the implementation effect of financial strategy in the transformation of Shanxi Coking Co., Ltd. (Independent study, Master of Business Administration). Bangkok: Siam University.


Abstract

Over the past 40 years of reform and opening-up, China’s economy has achieved rapid growth, but the ecological environment has also paid a price. Our country is facing huge pressure of resources and environment. It is of top priority to speed up the transformation and development of energy management system and mechanism. According to the report of the 19th National Congress, “China’s economy has shifted from a stage of high-speed growth to a stage of high-quality development.” In order to adapt to the new requirements of development and the formation of long-term competitiveness, resource-based enterprises have carried out transformation. Financial support is indispensable to enterprise transformation. As an important part of enterprise strategy, financial strategy plays a supporting role in enterprise strategy. A reasonable financial strategy is conducive to the realization of enterprise strategy.

Regarding Shanxi Coking Co., Ltd. (hereinafter referred to as Shanxi Coking), a large-scale metallurgical coke production and export enterprise in China, as an example, this paper studied the implementation effect of financial strategy under the corporate transformation, explored whether the financial strategy of corporate transformation was appropriate to the stage environment, and whether the implementation of financial strategy played a supporting role in corporate strategy, as well as the problems existing in the implementation of financial strategy and puts forward the corresponding countermeasures. Firstly, it introduced the development strategy of Shanxi Coking, and analyzed the external environment and internal environment of the implementation of the financial strategy in the transformation. Secondly, it studies the current situation of financing, investment and dividend distribution strategy in the transformation of Shanxi Coking. Thirdly, it constructed a financial strategy matrix and coupling coordination model to evaluate the effect of the financial strategy implementation in the transformation. It was found that the actual financial strategy of enterprises was not consistent with the principle of financial strategy matrix. There were such problems as capital structure imbalance, excessive investment scale, low investment benefit, unreasonable dividend distribution, etc. From the evaluation result of coupling coordination degree model, it was concluded that the coupling coordination degree of financial strategy and enterprise strategy during the period of enterprise transformation was not high. They were in the antagonistic running-in stage as a whole, and the financial strategy couldn’t support the enterprise strategy. Finally, the countermeasures to improve the implementation effect of the financial strategy in the transformation of Shanxi Coking company were put forward, including controlling the scale of investment, changing the investment direction, improving the capital operation ability, adopting diversified financing, reasonably distributing dividends, and enhancing coupling coordination, etc. This would enhance the financial advantages of enterprises, and create competitive advantages of enterprises, realize the transformation smoothly, and promote the long-term development of enterprises. Meanwhile, it also provided references for the implementation of financial strategy in the transformation of resource-based Chinese enterprises.

Keywords: Financial strategy, Enterprise transformation, Financial strategy matrix, Coupling coordination degree.


Research on the Implementation Effect of Financial Strategy in The Transformation of Shanxi Coking Co., Ltd

Master of Business Administration (International Program), Siam University, Bangkok, Thailand

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