Research On Strategic Cost Management Of GD Oil Service Company Based On Shank Model

The oil service industry is located in the upstream of the oil and gas energy industry chain,directly providing services for oil and gas exploration and production.Therefore,the development of upstream oil and gas energy exploration and production directly determines the development of the oil service industry.In 2020,affected by the outbreak of COVID-19 and the double drop of international oil volume and price,the income and profit of state-owned oil and gas field enterprises fell to an unprecedented low.In order to alleviate their operating pressure,state-owned oil and gas field enterprises have taken measures to reduce service prices and open oil service market to ease the impact.As a state-owned oil service enterprise that relies on state-owned oil and gas field enterprises to carry out various activities,its production and operation are facing complex and severe tests such as the continuous decline of the main market price,the decline of the core market share year by year,the increasing difficulty of production guarantee,and the existence of its own weak links.Therefore,it is very important for the survival of the current state-owned oil service enterprises to excavate and make good use of the space for cost reduction and efficiency increase in the industry chain.As an important part of enterprise management,cost management is an effective way to improve the efficiency of enterprise management.As an extension and further development of traditional cost management,strategic cost management is an important means to improve the core competitiveness of enterprises.Strategic cost management not only pays attention to internal cost control,but also pays more attention to external environment analysis.While realizing all-round cost reduction,it creates value for enterprises,builds long-term competitive advantages,and makes up for the shortcomings of traditional cost management.As a model of strategic management,the introduction of Shank model not only raises cost management to the strategic level,but also provides a new perspective for enterprises to rethink the cost management system and comprehensively improve the cost management ability by combining various analytical tools such as strategic positioning analysis,value chain analysis and cost driver analysis.This paper takes GD Oil Service Company as an example.Firstly,the literature analysis method is used to sort out the research results of strategic cost management at home and abroad,and on this basis,the related concepts of strategic cost management and the analysis framework of the Shank model are introduced,which provides theoretical support for the follow-up research.Then,the case analysis method is used to analyze the current situation of cost management of GD Oil Service Company,which shows that it is necessary and feasible to carry out cost management of GD Oil Service Company based on Shank model.Then,the internal and external environment of GD Oil Service Company ’s cost management is analyzed from three aspects : strategic positioning,value chain and cost driver by using the analysis framework of Shank model.Through PEST analysis and SWOT analysis,it is established that GD Oil Service Company should implement the strategic positioning of cost leadership and differentiated integration.With the help of value chain analysis,the internal and external value activity factors that can be adjusted in the process of implementing cost leadership and differentiated integration strategy are found out.Then,according to the cost driver analysis,the main factors that determine the cost trend of the enterprise are analyzed,and finally the corresponding suggestions for reducing costs are put forward.It is hoped to provide theoretical support and practical guidance for the enterprise to achieve short-term cost reduction,efficiency increase and long-term sustainable development.At the same time,it is also expected to provide experience for the cost management practice of the same type of state-owned oil service enterprises and help the industry develop healthily and sustainably.