Strategic Cost Management Based On Value Chain Theory Study Of Small And Medium Sized Enterprises

As China’s reform is steadily deepening and the society is making progress, the socialist market economy becomes more prosperous. The number of commodities in the market increases, leading to the homogenization of commodities and services. How to stand out has become the focus of many enterprises in a tough competition situation. Traditional cost management emphasize on the reduction of absolute cost in the internal production processes, which may bring about significant economic benefits in the short term, but for the long term, enterprises need to expand the scale of production constantly to maintain the situation of high-volume, low-margin business, which is clear that many small companies can not manage it. In order to achieve sustainable development of SMEs, companies should firstly know their own strengths of commodities and make strategies. Then they should raise the cost management to the strategic management level. In detail, that means enterprises should expand the simple cost management in the internal production line to the all links of the production to solve the problem in the weak links on the whole. These measures, can make enterprises to form the overall efficiency, having its long-term development.This thesis combine the method of literature analysis with case analysis to study. Under the premise of fully studying the existing relevant theories, the author selects HM Plastic Surgery Center as the research object, using theory to carry on the case analysis. Firstly, the author analyzes the current situation and particularity of the SMEs’ s cost management from the perspectives of the concept of cost management, cost management organization, the methods of cost management and cost management content. Secondly, introduces the general situation of HM Plastic Surgery Center including its current operational process, profit status and cost management status. Through this study, it is found that the existing cost management can not match with its competition strategy, and the management scope is narrow that needs to be widened. Finally, the author gives an overall analysis on the HM Plastic Surgery Center, including the strategic environment analysis, the internal value chain analysis, the external value chain analysis and the competitor value chain analysis. Taking the analysis result as the breakthrough point, And integrating the current situation with practice, the thesis will suggestions for constructing a suitable strategic cost management plan based on value chain. The study of HM Plastic Surgery Center’s strategic cost management in this thesis, provides a new way for the Centre to solve the plight of cost management. At the same time, it will provide some references for the same type of SMEs to cope with cost management bottlenecks in the development and to improve the existing management.