The Application Research Of Strategic Cost Management In Yingkou Hongqi Valves Company

Red Valve Factory of Yingkou City is a privately-run enterprise reformed from a village-run enterprise. After reformation, it faces many cost management problems of a low starting point, lacking of technicians,shabby equipment and lacking of initiative product, which make it hard for the enterprise to adapt to the rapid development of marketing economy and which make it impossible for the enterprise to strengthen competence and increase economic profits. Strategic Cost Management (SCM) refers to the management staff help the administration make enterprise’s development cost strategy in the view of strategic management by means of comparing and analyzing the relevant information of the enterprise itself as well as its competitor, by using a series of strategic cost analyze tools and enforcing the strategic action in and out of the enterprise to achieve the goals of lower the product cost and gain an edge for the enterprise.The main content of Strategic Cost Management has three aspects that are value chain analysis, strategic positioning analysis, cost driver analysis and so on.The information that value chain analysis made can help making enterprise strategy in a large part, so as to eliminate the enterprise cost disadvantage and create cost advantage. Strategic positioning analysis is combining with enterprise strategy and cost management to determine the configuration mode of enterprise resource and the corresponding management operation mechanism on the premise of locating the enterprise strategy. Cost driver analysis is to find out the important influence factors on cost,so that the enterprise departments take corresponding measures to ensure the effective achievement of enterprise cost management strategy.This article clears the importance of strategic driving factor and cost management of Red Valve Factory of Yingkou City through comprehensive and systematic analysis in value chain, cost driver and strategic positioning, so it can make the enterprise’s cost under the control of setting goals range to make sure the efficiency of strategic cost management.In the end it will promote the achievement of strategic target of Red Valve Factory of Yingkou City.