Study On The Effect Of Hikvision’s Value Chain Cost Management

With the rapid development of technology,cooperation between enterprises is becoming increasingly close and competition between enterprises has become more intense due to external factors such as globalisation and the new crown epidemic.In the long-term development of enterprises,traditional cost management methods that focus only on internal aspects can no longer meet the long-term development of enterprises.Applying the idea of value chain to cost management and extending the cost management of an enterprise from internal to external aspects from a global perspective can not only reduce costs,but also integrate the value added along the whole value chain,thus improving the cooperation and business model among enterprises and enhancing their competitive advantages in the market.This paper firstly compares and summarises the relevant literature at home and abroad,discusses the relevant theories of value chain cost management,and provides a theoretical basis for the case study.Secondly,this paper selects Hikvision,a well-known enterprise in the domestic security industry,as a case study to analyse the application of its value chain cost management: introducing the current situation of the enterprise’s value chain and analysing its strategic positioning through SWOT,then dividing the enterprise’s value chain into four perspectives: internal,supplier,customer and competitor,and conducting a specific analysis of its value chain cost management application measures and implementation effects.Afterwards,the DEA model is applied to evaluate the implementation effect.Finally,the successful experience of Hikvision is summarised to provide a reference for other security companies in the industry to carry out value chain cost management.Hikvision has optimised its internal value chain by optimising its R&D system,developing flexible production capabilities and establishing a global marketing centre;optimised its external value chain by establishing a supplier certification management platform,diversifying supplier selection and seeking common progress through win-win partnerships;optimised its customer value chain by establishing a two-wheeled platform of interconnection and cloud business and focusing on customer needs;and optimised its customer value chain by establishing a two-wheeled platform of interconnection and cloud business.Hikvision has effectively integrated its resources internally and externally by optimizing the customer value chain,transforming its business structure and developing innovative businesses to improve its competitiveness.Hikvision’s value chain cost management has achieved certain results,which are manifested as follows: from the internal perspective,it has obvious technological advantages,formed large-scale production to reduce unit production costs,shortened the sales process to increase sales;from the external perspective,it has improved the quality of raw materials from the source,diluted the risk of raw material disconnection,improved customer loyalty,formed brand advantages,and expanded the market share to expand sustainable development space.From the external perspective,the quality of raw materials is improved at source,diluting the risk of raw material supply,improving customer loyalty,forming brand advantages,and expanding market share and sustainable development.Overall,Hikvision’s operational efficiency has been improved and input-output efficiency is effective.The successful value chain cost management of Hikvision shows that value chain cost management can play an important role in the production and operation process of an enterprise.