Research On Cost - Leading Strategy Of XM Company

The cost leadership strategy is one of the successful strategies of XM company at the earlystage of the development, as well as a basic strategy must be adhered for the position andcontinue to consolidate development. But XM company’s type of business and the characteristicsof the service are different from the traditional industries and enterprises, it has somecharacteristics such as the fast changes in the market, the fast updated customer and oriented tocustomer needs but to the products, which leads the lack of methods to control the cost of trades,weaker cost control of logistics, lower level of cost control of stock and unexpected effect ofelectronic survey. The advantage of the cost leadership strategy is more and more smaller and theexisting research is more about the electronic commerce than XM company, therefore the costmanagement and control has become one of the most important issue which requires resolutionas soon as possible during the sustainable development of XM.The deductive method is applied in this paper based on the domestic and foreign research toanalyze the cost leadership strategy. The induction and deduction method is used to collectdomestic and foreign literatures. The PEST and the Five-Force model are utilized to analyze thecurrent status of XM from internal and external environment. The overall environment of thecompany is analyzed and summarized based on SWOT. This thesis elaborates the currentenvironment of cost leadership strategy and analyzes the problems, causes and presentmanagement status of cost leadership strategy. Aimed at the cause of problems of XM company’scost leadership strategy, this paper proposes that the company should improve product servicequality to reduce sale cost, establish the logistics management system of supply chain to reducelogistics cost, introduce the collaborative supply chain inventory control mode to reduce stockcost, improve information degree to propose the suggestion of development cost control, andfinally improve the value chain of company to enhance the cost leadership strategy.