Case Studies Of Cost Leadership Strategy Of HQ Co.

The demographic window era has passed, the traditional manufacturing industry is to the era of small profit. Manufacturing enterprises in particular of those OEM enterprises, how they could struggle to survive? How to get the profit, especially how to get much more profit?Sales price-Cost= Profit, under such a fiercely competitive market, enterprises could only reduce cost initiatively, and even reduce to a low level to guarantee the profits. Taking HQ company for example (as the study topic), they achieve the goal of competitive strategy by research the approach of cost leadership. Under the guidance of competitive strategy theory (1985), value chain theory (1985), lean management which was put forward by professor Michael Porter, the HQ company, Touchpanel cover glass manufacturing industry make investigation of their internal and external operating situation, and recognize that though overall the internal situation is generally good, however; the external situation is very severe. Meanwhile, they further analyze their advantage and disadvantage, opportunities and challenge, and they made the conclusion that their advantage outweighed the disadvantages, and the coming opportunities are more than challenges, as long as they manage well. On this basis, the company re-sort the value stream to identify the root causes of poor management in recent years. And they found that too many activities in the value chain are not value-added and also serious waste. So they HQ Company implemented lean management, abolished the backward mode of production structure......A year later, HQ Company has a great change, each production in the value chain is close to the level of lean management gradually, total operating costs dropped significantly. From the financial point of view, in 2014, the turnover was 165% higher than 2013, and gross profit increased 637%. They achieved the strategic goal of cost leadership...Taking a case study approach, this article shared the process of selection, planning, implementation, and inspection of cost leadership strategy. Also this article summarized some advanced experience that the HQ Company gained during the implementation cost leadership strategy process in order to play a positive role in the Touchpanel cover glass manufacturing industries or even the whole manufacturing industries.