Research On Overall Cost Leadership In The Context Of Supply-side Reform A Case Study Of BW Iron And Steel Enterprise

With the China’s economy development into the New Normal,the growth increasing speed of high has turned to medium-low rate.Moreover,the current scale economy with the extensive pattern of growth needs to be shifting in a new model increasing which is quality-efficient with intensive growth.The significant ingredients investment was replaced by the new economic model that is innovation.According to the New Normal,the reform is not only the most powerful policy but also the way out of the economic transformation.The iron and steel industry was eager to a new direction that is economy structural on provided.It also illustrates the fresh policy of China economy.As one of mainstay national economy,the mount of steel demanded in dramatic increment rating leads to the iron and steel industry into bloom heyday at very beginning.The main reason is the urban construction,the national railway and the factory all in great demand of steel.In addition,the variety of organizations operation had been guaranteed by steel industry.However,there are many issues such as steel price drops down,overcapacity situation,the high level prime cost and so on caused by the malicious competition.It has stunted enterprise expand and also affect the whole trade industry.The supply-side structural reform has effectively eased the deterioration of the status quo in the steel industry.And the five major tasks of cutting overcapacity,destocking,deleveraging,lowering costs and strengthening weak areas” inspires the steel industry.Based on the "supply-side reform",this paper and conducts research on BW steel an enterprise,which is divided into six sections.The first part is the introduction,which briefly expounds the background,significance,literature review,writing methods,and innovation points.The second part is the definition of related concepts,which introduces the supply-side structural reform,the Activity-based Costing Method and the Cost Management Theory.The third part introduce the BW Steel’s background and financial status in recent five years to analysis the status quo especially the cost status of the enterprise in reference to the five major tasks of supply-side reform.The fourth part mainly discusses the requirements of the supply-side reform to reduce the cost of steel companies.According to the Cost Management Theory.I assume a cost reduction method for BW Group,including three different aspects: costaccounting,cost management,and cost composition.Based on the discussion of the third and fourth sections and the analysis of BW Steel’s the current situation,the fifth part proposes a brand new strategy for the entire steel industry to reduce costs.In the wave of supply-side reform,we must insist on the capacity replacement platforms to improve productivity improve the quality of inventory for destocking to high-end development,use debt-equity swap and multiple financing measures in de-leverage,reform cost management mode and accounting method on “cost reduction” and strengthen the use of new science and technology such as "Integration of Production,Study,and Research" and Internet+ to achieve industrial upgrading for weak area.The sixth part summarizes the full text and illustrates the inadequacies of the article.In short,accelerating the structural supply-side reform is a key prescription for adapting to and leading the New Normal of economic development,and it is of great strategic significance for breaking through the “historical juncture” of the future development of China’s steel industry.At the same time,cost management is also an eternal theme in corporate management.No matter under any circumstances,it plays an important supporting role in the survival and development of the company.Facing with a more severe market situation,China’s iron and steel enterprises must not only be good at applying advanced cost management methods,but also rely on management innovation and scientific and technological progress to strengthen refined cost management and improve their competitiveness.It is also necessary to innovate cost management models and methods,apply modern cost management methods,and continue to create low-cost competitive advantages,so that the company develops sustainably.