Study On How To Facilitate Enterprises With ABC Concept To Build Up Own Competitive Advantage

With the rapid progress of modern science and technology, enterprises have to face up fierce competitions from home and abroad. Therefore the accurate and punctual information provided by activity-based costing (ABC) is highly valued by enterprises in the field of cost control, business process reengineering (BPR), pricing, determining profit margin, customer value analysis and so on. Generally speaking, competitive advantage refers to the advantage gained by a certain enterprise in competition with other enterprises in the industry it involved. This advantage lies in the better performance than the average of the industry it involved. This paper is trying to combine ABC with Competitive advantage, to facilitate enterprises with ABC to conduct BPR, select and evaluate suppliers, determine profit margin , in expecting to help enterprises build up their own competitive advantage. This paper could be divided into 3 parts mainly. In the first part, this paper will put emphasis on the theoretical relationship between ABC, value chain and competitive advantage in order to lay a solid foundation to the attempt to combine the above three. The second part is the core part of this paper. This parts starts with the introduction of 2 primary sources of competitive advantage, then followed by employing ABC to conduct BPR, select and evaluate supplier, determine profit margin in order to help enterprises gain their comparative advantage. In the third part, some suggestions will be given on how to facilitate China's enterprises with ABC to build up own competitive advantage.