Working Capital Management: Introduction
- Working capital management is a type of business strategy, essentially designed to monitor a company’s current liabilities or assets to maintain sufficient cash flows, in order to meet short-term debt obligations and short-term operating costs. Working capital management mainly involves tracking three main ratios that include the collection ratio, the working capital ratio, and the inventory turnover ratio.
- Furthermore, working capital management can improve a company’s profitability and earnings by making efficient use of its resources.
Global Working Capital Management Market: Dynamics
Global Working Capital Management Market: Key Drivers
- Surge in demand for working capital management among organizations to maintain sufficient cash flow is a key factor likely to accelerate the market in the next few years.
- Growing need for working capital management to maximize business operational efficiency, due to rising adoption of temporary working capital is projected to boost the growth of the working capital management market across the globe.
- Businesses or industries that deal in the manufacturing of products that have seasonal demand and need to maintain seasonal working capital is expected to fuel the working capital management market.
- Increase in adoption of working capital management for granting credit to customers, managing short-term investments, managing inventory, and managing payables to avoid over-borrowing, is expected to create new opportunities for the working capital management market during the forecast period.
Global Working Capital Management Market: Restraints
- Inadequate working capital is one of the major factors which can have a negative impact on the growth of the working capital management market. Besides, growing security and privacy concerns are likely to obstruct the growth of the global working capital management market during the forecast period.
Impact of COVID-19 on the Global Working Capital Management Market
The COVID-19 outbreak has been a major challenge for the post-pandemic business environment. Governments of different countries across the world have imposed lockdowns to curb the spread of the disease. Hence, increase in credit risk with more reported insolvencies, defaults, and bankruptcies during the pandemic outbreak (due to disrupting financial markets) is expected to enhance the growth of the working capital management market. In addition, the pandemic outbreak has increased the short-term, medium, and long-term cash needs of people for reducing financial disruptions in these challenging times and has raised the demand for working capital management extensively across both developed and developing countries during the pandemic outbreak to enhance trade receivables. This in turn is expected to drive the growth of the working capital management market during the COVID-19 outbreak.
North America to Hold Major Share of the Global Working Capital Management Market
- In terms of region, the global working capital management market can be divided into North America, Europe, Asia Pacific, Middle East & Africa, and South America
- North America dominated the global working capital management market in 2020. The U.S. is the key market in the region, to maintain sufficient cash flow to meet short term goals and obligations in multinational enterprises across the country. Additionally, presence of well-established players who offer working capital management is expected to boost the market in the North American region.
- The working capital management market in Asia Pacific is projected to expand at a rapid pace during the forecast period. This can be attributed to increasing adoption of working capital management among enterprises across China, Japan, Singapore, Australia, and India, to enhance return on assets and return on equity.
Global Working Capital Management Market: Competition Landscape
Several local, regional, and global players are active in the working capital management market with a strong presence. Rapid technological advancements have created significant opportunities in the global working capital management market. Providers are increasingly focusing on collaborations, mergers, and acquisition activities with technology partners to develop innovative and advanced solutions in order to improve their offerings and market reach.
Key Players Operating in the Global Working Capital Management Market Include:
- Citigroup Inc.
- Deutsche Bank AG
- HSBC Holdings plc
- JPMorgan Chase & Co.
- Raiffeisen Bank
- Standard Chartered
- The Bank of America Corporation
- The Bank Of New York Mellon Corporation
- UniCredit S.p.A
Global Working Capital Management Market: Research Scope
Global Working Capital Management Market, by Product Type
- Gross Working Capital (GWC)
- Net Working Capital (NWC)
- Temporary Working Capital
- Permanent Working Capital
Global Working Capital Management Market, by Application
- Inventory Management
- Accounts Receivable
- Accounts Payable
- Cash Management
Global Working Capital Management Market, by Region
- North America
- Rest of North America
- Rest of Europe
- Asia Pacific
- South Korea
- Rest of Asia Pacific
- Middle East & Africa
- South Africa
- Rest of Middle East & Africa
- South America
- Rest of South America
This study by TMR is all-encompassing framework of the dynamics of the market. It mainly comprises critical assessment of consumers' or customers' journeys, current and emerging avenues, and strategic framework to enable CXOs take effective decisions.
Our key underpinning is the 4-Quadrant Framework EIRS that offers detailed visualization of four elements:
- Customer Experience Maps
- Insights and Tools based on data-driven research
- Actionable Results to meet all the business priorities
- Strategic Frameworks to boost the growth journey
The study strives to evaluate the current and future growth prospects, untapped avenues, factors shaping their revenue potential, and demand and consumption patterns in the global market by breaking it into region-wise assessment.
The following regional segments are covered comprehensively:
- North America
- Asia Pacific
- Latin America
- The Middle East and Africa
The EIRS quadrant framework in the report sums up our wide spectrum of data-driven research and advisory for CXOs to help them make better decisions for their businesses and stay as leaders.
Below is a snapshot of these quadrants.
1. Customer Experience Map
The study offers an in-depth assessment of various customers’ journeys pertinent to the market and its segments. It offers various customer impressions about the products and service use. The analysis takes a closer look at their pain points and fears across various customer touchpoints. The consultation and business intelligence solutions will help interested stakeholders, including CXOs, define customer experience maps tailored to their needs. This will help them aim at boosting customer engagement with their brands.
2. Insights and Tools
The various insights in the study are based on elaborate cycles of primary and secondary research the analysts engage with during the course of research. The analysts and expert advisors at TMR adopt industry-wide, quantitative customer insights tools and market projection methodologies to arrive at results, which makes them reliable. The study not just offers estimations and projections, but also an uncluttered evaluation of these figures on the market dynamics. These insights merge data-driven research framework with qualitative consultations for business owners, CXOs, policy makers, and investors. The insights will also help their customers overcome their fears.
3. Actionable Results
The findings presented in this study by TMR are an indispensable guide for meeting all business priorities, including mission-critical ones. The results when implemented have shown tangible benefits to business stakeholders and industry entities to boost their performance. The results are tailored to fit the individual strategic framework. The study also illustrates some of the recent case studies on solving various problems by companies they faced in their consolidation journey.
4. Strategic Frameworks
The study equips businesses and anyone interested in the market to frame broad strategic frameworks. This has become more important than ever, given the current uncertainty due to COVID-19. The study deliberates on consultations to overcome various such past disruptions and foresees new ones to boost the preparedness. The frameworks help businesses plan their strategic alignments for recovery from such disruptive trends. Further, analysts at TMR helps you break down the complex scenario and bring resiliency in uncertain times.
The report sheds light on various aspects and answers pertinent questions on the market. Some of the important ones are:
1. What can be the best investment choices for venturing into new product and service lines?
2. What value propositions should businesses aim at while making new research and development funding?
3. Which regulations will be most helpful for stakeholders to boost their supply chain network?
4. Which regions might see the demand maturing in certain segments in near future?
5. What are the some of the best cost optimization strategies with vendors that some well-entrenched players have gained success with?
6. Which are the key perspectives that the C-suite are leveraging to move businesses to new growth trajectory?
7. Which government regulations might challenge the status of key regional markets?
8. How will the emerging political and economic scenario affect opportunities in key growth areas?
9. What are some of the value-grab opportunities in various segments?
10. What will be the barrier to entry for new players in the market?
Note: Although care has been taken to maintain the highest levels of accuracy in TMR’s reports, recent market/vendor-specific changes may take time to reflect in the analysis.