The Strategic Cost Management Of The Digital China's Distribution Business Based On Value Innovation

Under the circumstances of global economic depression and living environment of fierce completion, IT distributors will have to face such pressures and challenges as the diversification of customer needs, plenty of homogenous products, channel delayering, and preferential policies from vendors etc. They are anxious to strategic transformations, making customer-oriented marketing strategies and establish strategic marketing model and cost control system which could be well applied to the reality of market economic environment. Therefore, based on the concept of value innovation, this paper does a thorough analysis on Digital China's distribution business in accordance with strategic cost control theories, pushes forward specific strategic cost control measures, aiming to help Digital China establish low-cost management system and thus improve its level of management and strengthen its competitiveness.Chapter 1 and 2 introduce the strategic cost control theory with regard to value innovation, history development and the state of the field. Since Chapter 3, it deploys analysis regarding to the status quo of Digital China's business and its strategic cost control. By introducing SWOT Analysis and Value Curve Analysis, Chapter 4 develops an in-depth research on the macro-economic environment, the competition environment and the internal conditions of Digital China'distribution business. It contains three steps to strategic cost analysis, discussing the strategic positioning, value chain and the cost causation of Digital China's distribution business, and builds up the cost factor analysis model of distribution business'value chain, With the application of multiple linear regression method.Finally,we pointing out the problems within its strategic cost control system. Chapter 5 restructures its business model and cost management system and frames the corresponding strategic development plan to guide the effective strategic cost control plan of the company and to develop into a competitive edge. Thereafter, this chapter also works out a performance evaluation system based on balanced scorecard to accelerate the execution of the strategic cost control of the company.This paper discourses upon the entire process of strategic cost control from analysis to plan-making, from execution to evaluation. With the thorough research in this paper, value growth points of each link in the internal value chain of Digital China are dug out, which could be applied to the transformation of business or the execution of strategic cost control as a guidance or reference. The introduction of cost causation analysis to product purchasing, solution designing and sales management changes the traditional accounting method for cost and most importantly, guides the development of corporate strategy as well as its operation.