A Estate Companies In Strategic Cost Management Based On Value Chain

After decades of development, the real estate industry has becomeChina’s economic hot spots of consumption and a new growth point, thestatus of the economic pillar has been established. Facing of the rapidrise of the real estate industry, competition between real estatecompanies has become increasingly more intense. In order to secure itscompetitive position, enterprises have to seek effective ways and meansto build the core competitiveness. With the increase in large-scale realestate business development projects in recent years, more and more realestate companies realized that if companies would like to obtainsustainable competitive advantage in real estate, business center ofgravity must be shifted to cost management, to expand market share throughlower costs, more profits. However, in the majority of our real estatebusiness, there are a lot of inadequacies on cost management which cannot save and avoid the cost in the long-term perspective. Therefore, itis necessary to build strategic cost management system in the enterprise.This paper referred to previous research on the theory of the valuechain and strategic cost management theory, made further study on thisbasis, to seek the improvement of strategic cost management system basedon the value chain and optimization of countermeasures. These responsesand effective implementation can help companies improve the existingsystem of cost management, to make up for the defects and deficienciesin the current cost management system, and help enterprises to implementeffective cost management, access to the core competitiveness, maintainand enhance the enterprises in the industry as a whole the competitiveposition.On the specific application of the method, I use induction, comparativeanalysis and case analysis. The paper introduced the domestic andinternational situation of value chain theory, the theory of strategiccost management，the value chain cost management theory，and the contents and characteristics of the value chain theory and strategic costmanagement theories. In the analysis of rival value chain, the papercompared the company with the competitors relating to the value chain.This article applied value chain analysis, strategic cost managementtools to specific real estate companies, analyzed the original costmanagement system, and finded the optimization and improvement measuresfor which the existence of defects and inadequacies.After introducing the strategic cost management and value chain theory,the article described the problem identification and cause analysisrelating to A real estate company’s current cost management system. Thecore part of the paper discussed from four aspects of the value chain:internal value chain, industry value chain, rival value chain and costdrivers. Cost management based on the internal value chain can eliminatenon-value-added internal operations and enhance the efficiency andbenefits of value-added operations by analyzing the effectiveness ofoperations to achieve the purpose of reducing costs. In the costmanagement based on the industry value chain, A real estate company canestablish a vendor management system to optimize the value chain ofsuppliers and create customer value to optimize the buyers value chainto enhance the company’s cost advantage. In the cost management based onrival value chain, by analyzing the relevant business competitors, we canuse benchmarking and other methods to improve the level of cost management.A real estate company can enhance the cost drivers control by identifyingthe company’s strategic cost drivers and appropriate strengtheningmeasures to ensure the persistence of the corporate cost advantage.