Research On Strategic Cost Management Of SDSW Company

Cost is an important factor that affects enterprise competition and development potential.It is necessary to effectively solve the problems in cost control method for the development of modern enterprises.It is difficult for traditional cost management to adapt to the needs of strategic management due to its own deficiencies under the new management environment.The opportunity of cost improvement is impossible to be obtained by management personnel,resulting in weakening of cost control.The most effective approach to change this status is to understand cost from the strategic perspective,and adopt strategic cost management method to improve cost management level of Chinese companies,increase their competitiveness,and seek for enterprise lasting competitive advantage.Strategic cost management refers to formulation of different cost management plans based on enterprise different strategies.Thus,it is important to firstly analyze and develop enterprise competition strategy according to strategic positioning.The elements forming the cost of enterprise in business activities are decomposed and sorted through analysis of value chain to figure out the operational links that can be improved and optimized.The uncertainties that affect cost are identified by means of cost driver analysis.At last,the three analyses are combined together to formulate the cost management plan in conformity with enterprise competitive strategy.The following essay,with the changes of SDSW company's competitive environment as its logical starting point,is based on some basic theories of cost management,including its meaning,characteristics,analysis methods and meanwhile introduces the present situation of cost management of SDSW.The essay mainly analyzes some problems existing in SDSW as a sample which still uses traditional cost management,finds out the reasons why the application of strategic cost management is needed and explores the ways to apply the strategic cost management system.To make a basic analysis of SDSW's strategic cost management,there are three major tools,namely,strategic positioning analysis,value chain analysis and cost driver analysis.Considering the constraints of the internal and external environment,the wastewater treatment system in the paper-making industry prefers the cost leadership strategy while the wastewater treatment system in the chemical fiber industry applies a differentiation strategy.Taking the requirements of the two strategies,value chain analysis and cost driver analysis into consideration,we're trying to make the best plan for cost management and take some protective measures to ensure the best result.Here we take SDSW as an example,analyzes how it make use of the strategic cost management scheme in the process of its waste water management to attain more feasibility and superiority than the traditional cost management.This study can effectively help improve the cost management of SDSW company and at the same time offers other enterprises an example to learn from on how to control an enterprise's cost while protecting the environment.