A Case Study Strategic Cost Management Of M Company

With the development of economy, management is more important. And the cost management is the enterprises’ foundation, even in an invincible position. The traditional cost management had played an important role for enterprises to reduce the cost of the mileage, but if the management method is not advanced, only for a low production cost, will make enterprises in an invincible position. Under this background, the strategic cost management is collaborative, sustainable, dynamic, comprehensive, conducive to cost management, and conducive to the construction and implementation of enterprise strategy.Cost is the lifeblood of enterprise development, but also the core of the enterprise continued to grow. The cost decides the profit, the profit decides the enterprise’s position in the industry. Strategic cost management converted to cost drivers, focus on operating procedures and understand the enterprise cost structure fully to control cost and make continuous improvement. At the same time, making full use of cost information in the whole process of production and management to propose a dynamic and adapt strategic planning of enterprise’s cost.This paper reviews the academic achievements in the research of strategic cost management, and also discusses the five dimensions of strategic cost management theory: connotation, orientation, characteristics, necessity and main mode. Then the basic framework of strategic cost management is analyzed from three aspects—value chain, cost driver and strategic location, taking the value chain as the logical starting point, taking the cost move as the driving factor and taking the strategic position as the foothold.At the same time, with M company as the research object, from the company’s development situation, organizational structure, business conditions, cost structure, cost management framework and other aspects of the M company, we make a brief introduction to M company. Through the analysis of the current cost management status and problems of M company. This paper attempts to explore the logical starting point of the strategic cost management from the source of the value chain, cost driver and the strategic orientation, we believe that M company can continue to promote value chain optimization, grasp the core of cost driver, for differences in cost management, in order to obtain sustainable competitive advantage. Finally, this paper proposes corresponding suggestions of strategic cost management of M company. Still taking theoretical analysis of second chapter——cost driver, value chain, strategic positioning as the research basis, we suggest to strengthen the value chain analysis, strengthen profit center performance evaluation and the upstream and downstream customer order management, implement precision positioning strategy, reduce hidden costs, promote product differentiation business, promote cost driver analysis, enhance the awareness of strategic cost management, to further optimize the allocation of resources, which is a perfect and effective strategic cost management system for M company.