The Research Of Strategic Cost Management Of Heilongjiang Gamma Telecom Engineering Co.,Ltd

With global economic integration and ever-increasing complication of market competitions comes the era of meager corporate profits, coupled with higher and higher demands from enterprises for cost management. The nature of competition of modern enterprises is the competition of costs. Traditional cost management methods can no longer meet the requirements of corporate strategic management, so, the introduction of strategic cost management theories into corporate cost management is not only an important transformation in cost management ideas but also a must in the long-term development of enterprises.Strategic cost management can enable enterprises to stand on the strategic height, combine cost management and strategic management, integrate corporate cost management into the value chains of the entire trade, seek ways to lower costs from both inside and outside of the enterprise, and form higher-level strategic cost management. Strategic cost management can help enterprises win sustainable advantages in competition, score outstanding operation achievements, and attain the dual purposes of sharpening corporate core competitive edges and controlling costs. So it is of great realistic significance to research on and implement strategic cost management.Since the 1980s, when foreign countries put forward the idea of strategic cost management and conducted researches on it, the research key points have gradually shifted from theories to actual applications with the expansion of application scope of strategic cost management. Now our domestic research is still limited within the theoretical analyses. This paper makes studies by means of combining theoretical analyses and practice applications. It establishes the overall idea of strategic cost management, places importance on cost motives, makes use of value chain analysis tools, identify the functionary position of cost management in corporate strategies, and advocate applications in the Guomai Company by means of four steps of strategic cost management analyses, strategic cost management application methods improvement of strategic cost management guarantee measures and establishment of achievement appraisals.The paper focuses on the applications of strategic cost management in the Guomai Company. First of all, it makes analyses of the cost management status quo of the Guomai Company and identifies such problems as neglectfulness of strategic cost motives, narrow scope of cost management, too much emphasis on economic profit goals, imperfection of cost management systems, etc., which are detrimental to corporate strategy implementation. In order to have long-term development, foster and sharpen corporate core competitive edges, an enterprise must redouble its efforts to solve the above-mentioned cost management problems. In light of the existing malpractices of the traditional cost management, it should adopt theories and approaches of strategic cost management, use the three analytical instruments of strategic cost management to analyze and identify major existing problems of the company in an overall and systematic manner.Value chain analyses can develop opportunities to lower costs in internal and external value chains and raise values. The paper identifies major existing problems in the five operation activities, four auxiliary activities and various value chain activities along the corporate internal value chains, recognizes the value-addition operations and non-value-addition operations along the corporate value chains, understands the enterprise's position along the trade value chains and the gaps between the enterprise's internal value chain and its competitors' value chains, and probes into the possibilities of further lowering costs by making use of the upper-reach and lower-reach of the value chains. Through raising value-addition operation efficiency and vigorous elimination of non-value-addition operation, etc. to restructure the internal value chains, it proposes reconstruction of the Guomai Company's value chains through such methods as restructuring business operation flows, restructuring organizations, establishment of information systems, strategic partnerships, outsourcing strategies, etc.Through cost motive analyses, the paper discovers that the cost motives that have rather big impacts on the corporate costs are basic economic structures and operation procedures, so it pays strategic attention to the structure cost motives that have rather in-depth impacts on corporate costs and the implementing cost motives. Only through structure cost motives like controlling scale economy, integrating degrees, learning and overflowing (溢出), technicality, etc., and through implementing cost motives like productivity application models, liaison, overall quality control, staff dedication to the enterprise, etc., can we really control costs to guarantee the attainment of strategic cost management goals.Through analyses of strategic positioning and analyses of the internal and external environment with which the enterprise is encountered, the paper identifies the enterprise's advantages, disadvantages, opportunities and threats, clarifies the enterprise's position in the trade, in market and in product supply, and makes comparisons among and appraisals of the three competition strategies proposed by the enterprise. It selects and positions the enterprise's competition strategy as cost-priority strategy. It regards cost, quality and service as the key factors for the enterprise to win sustainable competition advantages and raises them to the corporate strategic level for the purpose of planning.Making use of the conclusion of cost-priority strategy, it advocates restructuring value chains, controlling cost motives, applying strategic cost management for objective cost management, and using foresight and market-driven objective cost management as effective measures to lower costs. The purpose is to turn customers' demands into compulsory competitive restrictions in all the relevant flows for optimized benefits with minimized inputs. It introduces engineering information management systems as backups to guarantee digital flows and information flows. It intensifies internal control management systems as the basics to set up corporate internal control system to prevent risks in operations. It improves the company's overall budgetary management systems to scientifically allocate the enterprise's internal human resources, material resources and financial resources, which can facilitate the company's cash flows, raise profits, help monitoring the implementation progress of strategic cost management, and ensure effective implementation of strategic cost management. Finally, through achievement appraisals of strategic cost management, it makes dynamic measures of various achievements of the strategic cost management, assess the goal attainment degree and offers timely feedback information to provide the company with strong support in strategic decision making to ensure attainment of the company's strategic cost management goals.Conclusion: The analyses of the Guomai Engineering Company's strategic cost management have clearly identified the cost-priority strategy as the company's competition strategy. During implementing strategic cost management, the Guomai engineering Company, taking account of its features and adopting the multi-factor analysis methods, should be engaged in value chain restructure to transform its cost structures to lower costs. It should adopt objective cost management and constantly improve its cost situations. It should control cost motives to ensure sustainable cost advantages. It should resolve the bottleneck problem of "high costs and fees but low profiting capacity", which has been bothering the enterprise all the time, realize the core strategic goal of "cost competition advantage and scale benefits, to further raise corporate core competitiveness and form the company's sustainable cost competition advantages.This paper applies the theories of strategic cost management in our country's telecom engineering construction enterprises and enlarges the application scope of strategic cost management theories, so it is of great practical importance to the Guomai Company to form its competitiveness strength and increase its efficacy.