Study On Strategic Cost Management Of China Yangtze Power Co., Ltd

Since the end of the 1980's,the primary developed countries such as Egland, france, German, America, Japan have proceeded to the electricity system reform, setting its tenet as to eliminate monopoly, establish competitive production framework, increase efficiency and enhance social fairness. The basic aspects of strategic cost management which attract most attention from the electricity enterprises in developed countries are as followings: adjust energy structure, decrease personnel expenditure, carry out comprehensive budget management, strengthen cost planning, implement state maintenance, attach importance to technology development. China YangzeRiver Power Co. Ltd. Has for a long time overlooked the theory research and practice exploration.Strategic cost management is a modern cost management theory that sets it fundamental goal as to acquire successive competition advantage. It possesses the following characteristics :Firstly, it is a kind of preventative cost management ;Secondly, it is a kind of long-term cost management; Thirdly, it is a kind of competitive cost management; Finally, it is a kind of open cost management that is being all-sided, having multi-angles, breaking through the boundaries between enterprises and running through the enterprise value chain. The back basic analysis methods of strategic cost management are value chain analysis and cost driver analysis. Strategic environment analysis, strategic plan, strategic implement, strategic assess and control are important steps included in the implementary procedure. In knowledge-based economy era, great changes have taken place in enterprise strategic cost management environment.Research indicates that in order to establish and maintain its long-run advantage, China YangzeRiver Power Co.Ltd. should enhance its strategic cost management from the perspectives such as cost management consciousness, cost management authoritativeness, cost management regulation system and control, etc. When analysized from the aspect of system, the company's cost driver includes system and regulation cost driver, organizing and personnel cost driver, method cost driver and process cost driver, among which it is the system cost driver that worths close observance, has the most powerful influence on the company's cost management level and possesses the greatest potential for improvement. It is the focus of China YangzeRiver Power Co.Ltd.'s strategic cost management to ease or eliminate the systemized cost driver. The cost management system modes of our electricity enterprises are the types ofcentralization, decentralization and in-between, which all have their own advantages and disadvantages. The production cost management system mode of China YangzeRiver Power Co.Ltd. Should fit in with the needs of its own development, which means the necessity to change its centralization mode to an opposite one.Establishing clear cost management proceeding regulation system, setting up executive restriction, economic control, technology norm and social supervision system of the whole cost proceeding .founding its sound responsibility system, assessing system, stimulating system of cost management objective; all the above-mentioned are significant element to ease or eliminate the systemized cost driver of China YangzeRiver Power Co.Ltd.Therefore, on the basis of analysizing the general mode of the cost management system of electricity enterprise in our country, to scientifically design its cost management system mode and optimize it in due time, on the basis of which to establish its sound cost management regulation system, to reform and perfect its cost management method are crucial ways to improve the cost management and to further enhance the competitiveness of China YangzeRiver Power Co.Ltd.