Risk Points In Various Industries-Consumer Service Industry
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Risk Points In Various Industries-Consumer Service Industry

Consumer service industry risk points (investor must have industry knowledge)


Catering industry, retail industry

2. Competitive advantage

Most companies in this industry have very narrow competitive advantages. The basic method of establishing a competitive advantage is to make low-cost leaders through scale advantage.

3. Catering industry

understand the life cycle of the company. The characteristics of successful catering companies: a. the concept of establishing success; b, successful replication is the key; c, the old chain stores must remain fresh, but do not need to completely remodel them.

4. Retail

Focus on the capital turnover cycle (the sooner the better).

Calculation: Capital turnover cycle

= Inventory turnover days+accounts receivable turnover days-accounts payable turnover days

=365/Inventory Turnover Rate+365/Accounts Receivable Turnover Rate-365/Accounts Payable Turnover Rate

=365/(Product Sales Expenses/Inventory/inventory)+365/(sales revenue/accounts receivable)-365/(commodity sales expenses/payables)

The characteristics of successful retailers: a. efforts to keep the store clean and fresh is the key to leaving the first impression on consumers; b, pay attention to the traffic conditions of the store; c, successful retailers have a positive corporate culture.

5. Summary

Low barriers to entry are not conducive to building a competitive advantage. The industry cycle is closely related to the economy, and the management of stores is crucial. The industry's low yields are cyclical and not worthy of long-term investment (even Wal-Mart McDonald's). Pay attention to off-balance sheet debt and look for opportunities to buy shares in a well-known retail company during the industry downturn.

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