The idea of strategic cost management (SCM), which studies the formation and control of costs from a strategic perspective, was gradually formed in the 1980s under the advocacy of British and American management accounting scholars. Since 1990s, the discussion about this idea and related methods has been deepened day by day, and the enterprise management practices in Japan and Europe and America have also proved that this is an effective way to gain long-term competitive advantage.
Enterprise strategic management is to manage the whole enterprise by using strategy, and it is a series of business management business formed by combining daily business decisions with long-term planning decisions. Enterprises must strengthen strategic awareness, strategic thinking and strategic management.
In order to adapt to the changing external market environment and obtain sustainable competitive advantage, enterprises must focus on formulating competitive strategies, while traditional cost management often focuses on simply reducing costs. Undeniably, there is no doubt that economy is a means in cost management, but in fact, when enterprises adopt different competitive strategies and pay attention to ensuring the differentiation of their products (such as after-sales service), they can appropriately increase costs and achieve the purpose of gaining competitive advantage.
Strategic cost management is a new cost management system based on the traditional cost management system and according to the requirements of strategic management. Through the provision, analysis and utilization of strategic cost information, it helps enterprise managers to form and evaluate enterprise strategy, promote the formation of competitive advantage and establish a continuous cost reduction environment, so as to effectively adapt to the changing environment outside the enterprise.
From the goal, it is mainly through the formulation and implementation of cost management strategy to form the competitive advantage of enterprises and build the core competitiveness of enterprises.
From the object point of view, through the dynamic analysis of the management elements before and at each stage of production, the whole process of enterprise production and operation and the whole life cycle cost of products are controlled and managed from the strategic point of view.
From the perspective of methodology system, a methodology system of strategic cost management consisting of cost driver analysis, value chain management and activity-based costing is formed, which is mainly based on strategic decision-making methods and draws lessons from analytical tools of related disciplines such as strategic management.
From the perspective of providing information, the system it forms is a collection of financial information and non-financial information, including financial information about key non-financial information that affects the success of enterprises, such as cost and income, productivity and quality.