Trategic Cost Management Of China Southern Airlines Co.Ltd. Within Value Chain Theory

In recent years,the state has introduced many policies favorable to civil aviation.On the one hand,it sees the support of foreign tourism development.On the other hand,it shows that the arrival of the era of big data means that the aviation industry must constantly improve its own ability of network technology development to conform to the development of the times.Although from the perspective of this series of policies,for various aviation industry in China,the opportunities are increasing,but at the same time,the pressure of competition is also increasing.On the other hand,the aviation industry has always been a high-cost,low-income industry,which means that if you can control costs well,you will have more opportunities to take the lead in the industry.China Southern Airlines is one of China’s three largest state-owned airlines,and it has continued to expand recently.In 2017,it has signed cooperation agreements with United Airlines to prepare for a strong alliance and to build bright future.If the company is a representative,whether it can maintain its lead in the increasingly fierce competition in the industry.Based on the value chain analysis,the essay draws on domestic and foreign relevant research results which combines the characteristics and status of the current domestic aviation industry,Used the comparison analysis methods in the financial statement analysis method and combine qualitative and quantitative analysis,then select the financial data in the annual report of Southern Airlines and peer competitors to organize and analyze the internal and external Value chain,and then find out its strategic position according to the SWOT analysis method.Finally,it analyzes and controls the cost drivers based on strategic positioning.The purpose of the article is to analyze how China Southern Airlines maintains its own competitive advantage in the face of competitive pressures,and proposes deficiencies and suggestions for its strategic cost management.It also hopes to provide reference for the entire aviation industry.The research conclusions are as follows: On the one hand,as with other domestic airlines,China Southern Airlines has a limited space for aircraft use costs,fuel costs,and landing and take-off costs。China Southern Airlines continues to expand in recent years.The introduction of a large number of models and the expansion of aircraft routes are aimed atbecoming an internationally competitive airline.However,through continuous optimization of sales channels and continuous increase in the R&D of information technology,China Southern Airlines has continuously reduced its sales expenses in recent years.At the same time,China Southern Airlines has increased its bargaining power with its suppliers and reduced its financial expenses by using its own scale;It has also established its own catering company,maintenance company,and personnel training company,it can not only reduce its own expenses,but also obtain revenues by providing upstream and downstream services for other small airlines.On the other hand,China Southern Airlines should pay attention to the realization of the goal of internationalization of enterprises,and should consider whether the benefits of entering the international market can offset the increased costs of the company.