E3 Journal of Business Management and Economics
E3 Journal of Business Management and Economics Vol. 2 (1) pp. 022-027, January 2011; © E3 Journals; ISSN 2141-7482
An Evaluation of Financial Strategies Used by Companies in the Retail Sector During Recession Period (2000-2010)Nzaro Robert * , Njanike Kosmas
Business Studies at Bindura University, Zimbabwe
*Corresponding Author E-mail: firstname.lastname@example.org
Accepted 8 November 2010
This paper analyses financial strategies for Zimbabwean companies in the retail sector industry in an economy characterized by recession from 2000 to 2010. The paper sought to meet the following objectives among others; to identify the various operating financial strategies available for companies operating in recession; assess the applicability of various short and medium term financial strategies for Zimbabwean companies and; provide a prescription to various stakeholders in the retail sector on evidence based operating financial strategies. Research findings showed that many companies ceased operations voluntarily and in most cases involuntarily. Others adopted a variety of financial strategies ranging from scaling down operations, streamlining business operations, being selective in service delivery to putting plants and machinery under care and maintenance. There was liquidity crunch in the market and as a result, companies failed to get funding; banks failed to attract meaningful deposits to provide companies with funding. Lack of operating finance was the chief cause why companies failed to reach pre-2000 operating levels. The study recommended companies to taking advantage of priority option in making payments as well as adopting a thorough recession management approach. Ignoring the impact of recession and its repercussions with the view that it would go away proved to exacerbate the problem.
Keywords: Recession Management, Capacity Utilization, Depression, Multi-Currency, Working Capital[Download Article - PDF]