The Study Of Cost Control For CR13G Company Based On Value Chain Theory

This essay was directly motivated by failure of cost control for the constructionenterprise. Along with the adjustment of the national industrial policy,market-oriented economy has been being completed. Capital intensive and laborintensive for the product has became the main part of market-oriented economy.Therefore, cost control has become the key for the core competence among all theenterprises. From there, we know that the transformation of the concept of costcontrol and the enhancement of the level of cost control are meaningful and urgent.Also this essay was specifically motivated by the application of value chain incost control and in cost control for the construction enterprise. Among internationalcompetence, relationships between target enterprise and all the suppliers, all thesellers and customers are getting closer. They have formed a close relationship by thewhole value chain. This value chain was based on the unity of final products andservices. If the target enterprise wants to create, keep, extend and enhance their corecompetence, they must analyze their whole value chain and improve the mind ofcompetence landscape which is the competence among the enterprises has beentransformed to the competence among the value chain.At the very beginning, this essay tells backgrounds and meanings of thisresearch. The domestic and overseas research have been sorted and reviewed as well.It introduces theory of value chain specifically. Under the knowledge of value chain,value chain management and value chain cost control; this essay clarifies the contextand analytical framework of cost control. After the analysis, I found that this structureagrees with concept of value chain management. Then according to the analyticalframework of value chain, it clarifies the cost driver of value chain further. The costdriver of value chain has been divided into strategy cost driver and activity cost driver.But this essay has divided strategy cost driver into structural cost driver and executory cost driver. This essay also emphasized on the study of strategy cost driver.At the part of demonstration, I combined feature of construction enterprise andmanufacturing enterprise. I also analyze the inner and outer value chains of CR13Gwhich is a construction company. For the inner value chain, base on the theory ofvalue chain which is given by Porter; I categorized it into basic value activity andassistant value activity. For the outer value chain, according to the five-force modelwhich is given by Porter and extension of value chain theory; absorbing some viewsof Hynes; using virtual value chain for reference; I divided it into suppliers(machinery suppliers, labor suppliers, material suppliers and subcontractor), CR13Gcompany, design(it should be part of the CR13G company as a functional department),owner and supervisor. I divided the value chain’s cost driver of CR13G Company intostrategy cost driver and activity cost driver. Also the strategy cost driver was dividedinto structural cost driver and executory cost driver. After the analysis of value chain’scost driver of CR13G Company, it gives the solution of how to control the cost. Atthat part, I analyze from two perspectives: strategy cost control and management costcontrol. For the part of strategy cost control, I started with following threeperspectives: the cost for information technology, the cost for the structure, the costfor the relationships. For the part of project cost control, after analysis of every part ofconstruction, I found the most valuable and most value-added part. To achieved theunity between technology and economy of construction organization design,...