Strategic Cost Management Of Luoyang Glass Under The Shank Model

The global energy transition and the "double carbon" target have promoted the rapid development of new energy in China,and the photovoltaic industry,as an important new energy industry,has received multiple policies and support.As an important new energy industry,the photovoltaic industry has received multiple policies and support.As a material for photovoltaic components,photovoltaic glass has also seen rapid expansion in the industry.The rapid development of the industry and the emergence of new forces make the photovoltaic glass industry gradually reveal the trend of overcapacity,and therefore cost has become the key to win the competitive advantage of enterprises.Strategic cost management is the strategic planning of long-term cost control to achieve simultaneous improvement of economic efficiency and competitive strength.Based on the research results of strategic cost management at home and abroad,this paper selects the Shank model as an analytical tool,takes Luoyang Glass(recently renamed as Kaisheng New Energy)in the photovoltaic glass industry as the research object,analyzes the existing problems of its strategic cost management from the levels of strategic positioning,value chain management and strategic cost motivation,and proposes corresponding optimization measures to improve the strategic cost management of Luoyang Glass.This paper finds that Luoyang Glass has a single competitive strategy of total cost leadership,low R&D efficiency due to staff turnover,limited production scale without economic effects,high costs in the downstream value chain due to the lack of warehousing and logistics,and high costs in the external value chain due to limited strategic cooperation and linkages between upstream and downstream enterprises.The company is also recommended to adopt a diversified competitive strategy combining total cost leadership and differentiation,develop staff incentives and focus on the transformation of R&D results to improve R&D efficiency,expand production scale to achieve economies of scale,establish a comprehensive warehousing and logistics system to reduce transportation costs,reach strategic cooperation with upstream and downstream enterprises to achieve resource integration,and implement internal deepening and information-based strategic cost management.The Shank model used in this paper integrates and incorporates a variety of strategic cost analysis methods and provides a systematic analysis of the macro environment,industry development and competition as well as the current situation of the company,which helps Luoyang Glass to define a long-term cost management strategy and establish a long-term competitive cost advantage.