Construction enterprise cost management via value chain analysis

Intense competition, lower tender and bid price, the owner's nonstandard behaviors etc. have lowered the economic benefit of construction enterprises nowadays. Therefore, construction enterprises have to reinforce cost management and improve competitiveness to survive and develop. With the overall improvement of level of management of safety, quality and technology of construction industry, cost management has become the most important factor for assessing the competitiveness, viability and development potential of construction enterprises. Cost management by value chain analysis focuses on the essence of cost and provides a new concept for solving problems of cost management of construction enterprises. Value chain of construction industry and internal value chain, longitudinal value chain and transverse value chain of construction enterprises were analyzed by value chain theories and methods-and based on the review of the status quo of cost management of construction enterprises in China. Value chain cost management methods were proposed for construction enterprises. Acquirement of cost advantage by value chain analysis and its significance were discussed, which is helpful for construction enterprises to realize strategic cost management and enhance competitiveness.