The Southern Cap Company Low-cost Strategy

Cost leadership strategy is well-known American management expert, Harvard Business School professor Michael·Institute of well-known Porter (Michael E. Porter) made one of the three competitive strategies, is an effective way through, so that the full cost of less than the competition of enterprises opponent's costs, in order to obtain more than the industry average profits. Cost leadership is the most basic competitive strategies are based on the cost of any edge basis. In other words, no matter what business competitive strategies, cost advantage is its central issue to be paid attention.In recent years, due to arrester manufacturing industries more competitive, making the South's crown company had to focus development strategies and cost management strategies. Arrester power equipment industry is a sub-industry, arrester industry development and therefore the power industry in China's development. Power industry is the basic industry of the national economy, with the "Eleventh Five-Year Plan" of the full implementation of the electricity demand and installed capacity growth and sustained development of promising prospects for the power industry constitutes the external arrester industry marketing opportunities. However, due to institutional and traditional reasons, those with high-end products and technologies, and those with capital and scale of enterprises will withstand the increased costs, but those core business is still mainly producing Diya product primarily, but also in the capital, to bear the cost of capability to companies in the competitive environment in the future at a disadvantage.South crown in the external environment based on the analysis, but also on their own internal business environment analysis, especially analysis of the operation:the company's output, sales rise, but prices, profitability declined. Thinking in a comprehensive, rational analysis based on the industry and product characteristics, according to the characteristics of the enterprises themselves, scientific decision-making, the full implementation of cost leadership strategy:the pursuit of cost reduction based on experience, strict control of manufacturing costs and management costs, the pursuit of research and development, service, sales, advertising and other value-creating sector to minimize costs. South crown the strategic management of the company using innovative ideas, to locate low-cost strategy based on innovation and value, rather than the traditional sense of the cost and price wars. Through practice, come to this conclusion:innovation and low cost are not contradictory.This paper introduces the basic theory of low-cost strategy, including the concept of low-cost strategy has defined the strategy described is different from the differentiation strategy and low-cost centralized strategy, introduced the type of low-cost strategy, low-cost strategy for conditions and organizational requirements and the benefits and risks of low-coststrategies. Then the above theoretical research based on the crown of the South's low-cost strategy, external environment analysis: the international economic environment arrester industry analysis and the status of the industry in China. Then the South crown company's internal environment analysis, introduced the basic situation of the firm's South, South crown when the company's low cost strategy of operation, South crown's strengths, weaknesses, opportunities and threat analysis. Finally, the company's low-cost South crown design and implementation strategy for a detailed analysis.Innovation of this paper:1, use swot analysis to identify strategic cost, using the empirical model low cost strategy.2, arrester manufacturing industry with technological innovation of low-cost strategy.3, the low-cost strategic orientation based on the value of innovation, rather than the traditional sense of the cost and price wars.