The Study Of Strategic Cost Management Based On Value Chain Theory

In2500years ago, The importance of strategic planning was mentioned inthe "Art of War", which emphasizes fully understand in advance for themselvesand competitors, so as to "the outcome being known". Similarly, modernenterprises are facing a complex internal and external situation. The competitionbetween enterprises is increasingly fierce. In order to compete for survival anddevelopment space，enterprises must increase the management to strategic level.There is a huge potential in the cost management. How to gain benefit from costmanagement, is an important focus of enterprise management, is also the eternalsubject of the enterprise management. The traditional cost management put theoccurrence of various cost as an independent part to control. It seeks to reducethe absolute cost and lake of good contact between cost management andcompetitive advantage. Moreover its role is ignored in the value chain. Atpresent, value chain management has become an important direction ofdevelopment of enterprise management in the new era. This advancedmanagement model just to meet the contemporary competitive environmentfaced by the enterprises, and more in line with the enterprise value creationprocess than the traditional cost management has made significant advantage.Based on the situation, this paper introduces the value chain analysis tool ofstrategic management cost management. By adopting the method of value chainanalysis calculation and cost drivers, the article separately from internal and external cost analysis and strategic management. Breaking through the limit oftraditional cost management, it expands to the entire life cycle of enterprises andmakes the enterprise not only pay attention to production cost saving, also payattention to from the product research and development design, raw materialsprocurement, production and processing to the final waste disposal of the wholeprocess control. It prompts companies consider cost management from a widerrange of contexts.Through the study of strategic cost management model based on the valuechain, the following results obtained: First of all, compared with the traditionalcost management, found the strategic cost based on value chain managementstrengths, and build the basic ideas of the model; Second, through research andanalysis, strategic cost based value chain management model was constructed,respectively, based on longitudinal，lateral and internal value chain; Finally, theapplication of the model and respond to questions raised by the implementationof the program, and further on the value chain and cost management foundation.