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Capital Operation: Important Role of Capital Operations

Updated:2018-1-4 14:42:26    Source:www.tannet-group.comViews:256

Capital operation can be understood as industrial capital, financial capital, technical capital and human capital operations, in which intellectual property can be included in the technical capital. Today, there are many problems existed in the development of SMEs, which urges the businesses to strengthen the capital operation of their internal resources, form a complete internal operation system meeting the requirement of business' development, thus promoting the expansion and development acceleration.

The Important Role of Capital Operation in SMEs Development
In the production management of business, the operation of capital is at a high level, which can improve the product structure, expand the scale of enterprise, optimize resource allocation, enhance the management level, these major roles can be seen from the following aspects:

1. Help enterprises achieve the optimal allocation of resources.
Corporations compete with each other to survive the high-quality and eliminate the bad-quality depending on the flow and reorganization of capital, a high-level enterprise can acquire low-level enterprises companies to improve and develop, making the best use of the resources of low-level enterprises to realize the best combination of capital, technology and resources and improve the operation scale, meanwhile bring more tax revenue to the state, and bring more benefits to the enterprise.

2. Expand the business scale, and optimize the capital structure.
Capital operation should make full use of and control the capital, controlling most resources with the least cost. Normal and efficient capital operation can provide a solid guarantee for the rapid development of enterprises. Meanwhile, the company's capital operation further promote the capital structure to evolve from "deterioration" to "optimization".

3. Help enterprises to improve their management level
Capital operation belongs to the overall and fundamental mode of operation in the enterprise. This proposes a very high management requirement for business managers. Enterprise managers in the way of capital operation, consciously improve the knowledge structure, strengthen market and benefit concept, raise the risk consciousness, and eventually improve the management level and the abilities to solve the problems.

Relations Among Product, Brand and Capital Operations
Most successful companies have experienced three business phases: product, brand, and capital processes. The primary phase begins with the process of building up certain types of products. But if a company is content with a simple product operation and has no desire to develop a brand for itself, it will remain in a narrow corner, and will never embark on the road to expansion. Brand operation is commonly referred to as brand building.

The basis of brand operation is product operation. Products that are excellent in quality and reasonable in price are the root of a corporate brand. On top of this root, the brand is the fame of a company, developed through the qualities of that company, such as creditability, innovation, service, and responsibility. Products of a company serve as the carriers that bring this kind of fame to consumers, cultivating public trust, admiration, and reputation. Only then can the brand operation be counted as successful.

A successful corporate brand equips the company with stronger profit-earning capability and wide development room, therefore promising a high investment value. Capital operation introduces the high investment value of a company into the capital market at an appropriate time, realizes the potential value added contained in its brand, and turns corporate value, which is formed through years of investment and brand building, into real profit through price premium.

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