Research On Cost Management Of Value Chain Of China Southern Airlines

Aviation industry plays an important role in China’s market economic activities.Although with the rapid development of information technology reform,there are also domestic and foreign competition,financial risks,economic slowdown and other issues.How to maintain sustainable profitability has become a major problem that every aviation enterprise focuses on.Efficient and reasonable value chain cost management can start from the internal and external environment of the company,use the value chain analysis to reasonably allocate enterprise resources,identify and change the non-value-added operations in the production and operation of the enterprise,and carry out cost control with the goal of creating a continuous cost reduction environment for the enterprise,so as to greatly enhance the advantages of the cost competition of the company.In this paper,China Southern Airlines Company Limited(hereinafter referred to as China Southern Airlines)is selected as the research object to study the current situation of cost management and the sustainability of cost management mode.This paper combines the value chain model and the theory of value chain cost management to study the case of China Southern Airlines.First of all,as an air transport enterprise,China Southern needs different industries to participate in it,so as to carry out value chain analysis.Through deconstructing the internal and external value chains of China Southern,we can identify the value-added and non-value-added links and analyze them;Secondly,make reasonable analysis and use the annual reports of several airlines for 2014-2018,and conduct in-depth research to analyze the changes in financial indicators of Southern Airlines and their comparison with the industry average;Then,through external value chain cost management analysis,the cost of internal costs is reduced as much as possible,and internal value chain cost management is used to comprehensively analyze the process of value formation and value-added of the enterprise,which effectively reduces the cost of the enterprise and creates maximum benefits;Finally,it summarizes the problems existing in the application of value chain cost management and puts forward corresponding suggestions.Through research,it was found that when China Southern Airlines carried out internal value chain cost management,it identified and controlled cost drivers and gradually became standardized and contracted.When conducting cost management of external value chains,improve the efficiency of production and operation of the enterprise,and form a selfimplementation mechanism.At the same time,strengthen the upstream and downstream links of the enterprise value chain,increase the degree of customer participation in the value chain,further improve the strategic environment for cost leadership,and enhance the company’s cost competitiveness.