Study On Strategic Cost Management Based On Activity-based Cost

With the rapid progress of modern science and technology, enterprises have to face up fierce competitions from home and abroad. Therefore the accurate and punctual information provided by activity-based costing (ABC) is highly valued by enterprises in the field of cost control, business process reengineering (BPR), pricing, determining profit margin, customer value analysis and so on. Generally speaking, competitive advantage refers to the advantage gained by a certain enterprise in competition with other enterprises in the industry it involved. This advantage lies in the better performance than the average of the industry it involved.This paper puts forward the research Frame at first, and then explains the basic principle of ABC referred to this paper, and compares it with the traditional cost method to tell the advantage of ABC/M, and finally sums up the research achievements home and abroad that have existed, Establishing a basis for the next research. Next it introduces the analysis method referred: firstly we have a look on the analysis of basic cost driver of ABC, and then expand to the value chain analysis, introduce to the strategic cost analysis, analyzing layer upon layer till to the final competitive advantage analysis which accords with the deduction analysis law of the norm studies. It also introduces the appliance of the strategic cost management based on ABC in the two competitive advantage of cost leading and differentiation, as a brigade of ABM and competitive advantage and an important strategic cost analysis tool value, chain analysis plays an important role in how to lower the strategic cost,and explain how activity cost budget plays an role in lowing cost. Finally it summarizing all the viewpoints and putting forward some proposal as to how ABC can promote competitive advantage in our country, finally showing clear direction for future research.