Research On Strategic Cost Management Application

With the change of world's economic environment, today's economy is becoming more and more competitive. To some extent competitive means cost management for modem enterprises. Cost management and cost control have experienced long and evolving procedure in the cost history. Especially over the past decades, along with development knowledge-oriented economy, Enterprises should stand in the height of strategy in order to adapt to the constantly changeable competitive environment, Foster the advantage of competition for a long time, Decision Support System as business administration, Cost management should carry on strategic expansion. Then strategic management arises at the historic moment. Strategic cost management (SCM) is cost management that considers organization competitive advantage and makes the company adapt itself to external environment. SCM includes the analysis of value chain, strategic position and cost drive. Domestic researches on Strategic Cost Management theory and practice begin later than foreign researches. With China's entering into WTO, domestic enterprise will face fiercely competitive. In the situation, research on Strategic Cost Management Practice is absolutely significative. The paper pays more attention on relevant problems of Strategic Cost Management Practice, especially on process of Strategic Cost Management Practice. I analyze involved cases, and put forward my advice of domestic enterprise's Strategic Cost Management Practice. The paper is comprised of four parts.The first part introduces the commencement and development of SCM. On the basis of which, it discusses further the process of Strategic Cost Management Practice. I think the strategic analysis methods should be detached from Strategic Cost Management Practice and the basic process should be stressed. Then I put forward my advice, constitute, practice, evaluate and control.The second part first introduces three analysis methods of SCM, value chain,strategic position and cost drive. To insure the realization of SCM I think, three methods should be expanded in two sides, enterprise strategic choice, cost management in confirmed strategic. I also analyze correlative cases, and describe relevant problems in enterprise Strategic Cost Management Practice.The third part debates Strategic Cost Management performance evaluation, namely the third stage of Strategic Cost Management Process. I discuss further the strategic performance evaluation system, and think enterprise must establish its system on the basis of its competitive environment and strategic require.The last part describes the situation of domestic enterprise practice of SCM, and discusses further about conditions which domestic enterprise should have when practicing. In the end, I advance my advice to domestic enterprise.