Study On Digital Transformation And Enterprise Value Chain Cost Management

The rapid development of China’s digital economy has opened up new markets not only for new companies but also for traditional industries.In the current challenging environment,China has promoted the digital transformation of the real economy and created a new digital economy.In developing a strategic strategy for information technology and industrialisation in the new era,all major enterprises are committed to R&D,to using big data and to improving their competitiveness through digital technologies.In a context of limited resources,the benefits of value chain cost management are paramount.Therefore,the focus of this paper is on how to implement business cost control through digital technologies.This work innovatively combines digital transformation and value chain cost management to explore the impact of digital transformation on the cost management of enterprises,to enhance business agility and improve the production efficiency of enterprises.Combining a literature review and a case study,this thesis chooses Yili Group as the case study,refers to relevant literature,documents and reports,examines the drivers,processes and measures of digital transformation and draws conclusions.The selection of dairy managers makes the study more representative.This paper brings together digital transformation and value chain cost management studies.The impact of digital transformation on value chain cost management in the enterprise is explored in depth through the digital transformation.Using Yili Group as a case study,relevant literature,books and reports are reviewed to explore the causes,processes and impacts of this digital transformation.Yili Dairy,a leading dairy company,has been selected as the case study to make the study more representative,with the expectation that universal findings will be uncovered through an analysis of the Yili Group case.First,the digital transformation and value chain characteristics of the dairy industry are analysed,identifying uneven digital penetration,weak digital architecture of marketing models and concerns about raw milk quality at the beginning of the value chain,small differences between production and processing products in the middle of the value chain,and low marketing efforts at the end of the dairy value chain.In the following,the digital transformation of Yili Group is analysed,starting from the baseline situation and management of Yili Group and describing the motivation,process and value chain cost management characteristics of Yili Group’s digital transformation.The analysis also compares financial data from 2011 to 2021 with other companies in the same industry to analyse the benefits of Yili Group’s digital transformation from both an internal and external value chain perspective,followed by the challenges that digital transformation has brought to Yili,such as high short-term borrowing,debt servicing pressures and high advertising costs.In response to these questions and taking into account the current state of digital development at Yili Group,recommendations for managing value chain costs are provided.For the internal value chain,the company should use digital technology to rationalise the allocation of marketing costs,strengthen cost control and prevent risks.For the external value chain,the company should use digitalisation to innovate sales channels,deepen consumer demand and realise synergies between the internal and external value chains,so that Yili can further optimise its value chain cost management through digitalisation.Some general conclusions and insights can be drawn from the case of Yili.Digital transformation can lead to win-win benefits,cost optimisation,etc.while the results of digital transformation also require a certain period of time.