Research On Enterprises Cost Strategy Decision-Making

In recent years, China’s economic performance has been suffering a widening downward pressure. One of the important reasons is that China is experiencing a critical period of transformation of the economic growth pattern, and previous economic growth factors, for example low-cost, absorption of technology, market space, are gradually changing. The factor costs are raising rapidly, especially the cost of environmental protection and labor force. This situation means that China’s economic growth pattern which depends on low-cost strategy are facing unparalleled crisis, even some enterprises and industries have shifted to lower-cost producing countries. However, the emergence of such a crisis is not accidental, but the trend results in changes in the economic environment. Therefore, Chinese enterprises should meet the challenges of the crisis on their own initiative by changing the traditional low-cost strategy, and reshape the foundation of Chinese enterprises’core competitiveness. So it has been a problem demanding prompt solution to make enterprises cost strategy decision and to shape a cost strategy which could meet the competitive strategy.As an important part of functional level strategy, cost strategy plays a key role in achieving the goal of competitive strategy. Since the research on strategic cost management’s theory and method is continuing, it has been formed some advanced implementation concept of cost strategy. However, when enterprises meet multi-level decision-making influence factors, there is lack of a clear evaluation index system to guide the decision-making.First of all, this research defined the concept of cost strategy and cost strategy decision-making based on collected and summarized the past literature in domestic and overseas, and introduced strategic choice theory, competitive advantage theory, value chain management theory and the life cycle theory as the theoretical basis of the research. Then, this research analyzed the cost strategy decision-making influence factors respectively from the micro, meso and macro levels, to form the foundation of establishing cost strategy influence factors evaluation index system. According to the analysis of cost strategy influence factors and the survey result of their importance rank, this research established a cost strategy decision-making influence factors evaluation index system, and calculated the weight of the index system by AHP. Finally, this research offered a couple of suggestions to improve the quality of cost strategy decision-making, and look forward to help Chinese enterprises make effective cost strategy decision.