The Analysis And Application Of Strategic Cost Management In Company D

Cost management plays more and more important role in the market competition, in the other words, the quality of cost management for a company determines its competitive position. With the development of cost management theories, Strategic Cost Management (SCM), one of the newly developed theories of cost management, become a key management-tool in enterprise administration. It is necessary for a company to keep track of and apply SCM theory for win the heated competition. Therefore, in this article we try to study the theory and analyze company D using the theory of SCM; give detail methods on SCM to help company D establishing their own SCM structure and promoting their capacity of cost management, finally building their competitive advantages.In the first part of this article, we begin with three steps of Strategic Cost Analysis, include strategic positioning, value chain analysis and cost driver analysis. Then we focus on using Balanced Scorecard Method (BSM) to estimate SCM achievement and explain why SCM can help the company reduce its cost. In the second part of this article, we first analysis the problem of cost management in company D, bring forward the basic way of the SCM in company D, direct company D execute SCM so that it can effectively reduce its cost and shape its competitive advantage. In the third part of this article, we analysis how to carry out remark outstanding, devise an index system of BSM based on company D's practice. The index system of BSM can intend to lead the all of company D understand SCM and take part in it, so promote the capacity of SCM of thecompany.In this article we dissert the whole process of SCM in company D, from establishment to execution of it. Therefore, the research in the article is meaningful. Firstly, the discussion of SCM in the article could give a model for relative industry if they are going to use SCM. Secondly, We put Cost Driver Analysis as a tool in to the purchase and marketing management in company D, change the traditional costing methods for help the company reduce cost greatly and operate effectively. Finally, we find out appropriate way to apply BCM in company D and help it achieve its SCM goal. These are the innovative point of the article.