SH Electric Strategic Cost Management Research Based On The Value Chain

Cost management is the main safeguard that the enterprise to resist the pressure ofcompetition. Traditional cost management mode which lack of forward-looking is quitedifficult to meet modern enterprises long-term development needs. Will increase cost to astrategic height, integration of the value chain, coordination of external environment andother means to bring enterprise competitive advantage has become increasingly obvious.Strategic cost management is the enterprise cost management to adaptive change of thecompetitive environment changes made. The value chain to analyze the internal andexternal business activities and identify the key strategic cost factor analysis provides anefficient and convenient path. Strategic cost management based on value chain helpenterprises to better build up cost advantages, to better adapt to the change of competitiveenvironment, to better realize the strategic target for business development.SH electric is an enterprise specializing in production of electronic components whichhave the characteristics of a typical manufacturing enterprise. Firstly, it introduces thevalue chain, strategic cost management, and other related theories. Then the papercombined with the actual situation of the company, analyze the problems existing in thecost management, and then points out that the current cost management model haslimitations, as well as the necessity of the implementation of strategic cost management.Starting from value chain. The paper analyzes the enterprise in three dimension of valuechain, such as the competitors to each business unit and the link between are analyzed inthis paper. On this basis, the author try to identify strategic cost driver analysis andstrategic positioning analysis, clear the focus and direction of the strategic costmanagement. Finally, the paper puts forward related Suggestions including fullparticipation, the value chain optimization, performance evaluation, personalized, ordermanagement, cost early warning. Through analyzing SH electric company, the researchcombines value chain and strategic cost management, in order to obtain strategiccompetitive advantage for modern enterprises.