Research On Strategic Cost Management Of Hunan Construction Engineering Group

With the accelerating process of urbanization in China, the scale of investment ininfrastructure is increasing and the protection of housing construction is promoting.It’s the unprecedented opportunities for development of construction enterprises. Atthe same time, due to the increasingly fierce competition in the domestic constructionmarket, the construction enterprises face many challenges, including macroeconomicregulation and control, the real estate industry bubble, rising construction costs and soon. At present, most cost management concepts of our construction enterprises fallbehind and lack of strategic awareness, so the overall cost of the enterprise is in a highlevel, the cost control result is not satisfied. Therefore, China’s construction enterprisesneed an innovative cost management to reduce the overall cost level and improve thecore competitiveness of enterprises.Based on the theory of Strategic Cost Management, this thesis resolves manyproblems, such as ignoring overall cost management, not considering the joint costmanagement and the short-term behavior of the cost of the project management byanalyzing the strategic cost management system of Hunan Construction EngineeringGroup. First of all, this thesis provides the meaning of strategic cost management andthe system of strategic cost management, which provide the theoretical basis for thespecific application of strategic cost management system. Secondly, the thesis analyzesthe current cost management situation of Hunan Construction Engineering Group, andpoints out the problems. Finally, it describes the pracical application of strtegic costmanagement system in Hunan Construction Engineering Group on three aspects, suchas value chain analysis, strategic positioning analysis and cost driver analysis. Then itprovides some advices of the implementation of strategic cost management of HunanConstruction Engineering Group.Judging from the current situation, the study and practice of advanced costmanagement of construction enterprises in China is relatively lag behind. With thestrong foreign construction enterprises gradually entering the country and China’sconstruction enterprises going abroad, reducing business costs and enhancing the corecompetitiveness are becoming the most important tasks of each constructionenterprises in new environment and situation. As a new method of cost management,strategic cost management can help China’s construction enterprises change cost management, achieve combination of strategic management theory and costmanagement theory, therefor making the enterprise cost management morecomprehensive and the implementation of the strategy more effective.