Study on Cost Control in the Construction Industry Based on Value Chain Theory—Take Chang’ an Construction Company As An Example

Abstract

In the face of scarce resources and the law of competition for survival of the fittest, cost control is an eternal topic for enterprises. In traditional accounting, people tend to pay too much attention to the cost of product production, the control of cost is concentrated on the manufacturing cost within the enterprise, and only a single driving factor is the cause of the cost, which causes the traditional cost control to be more and more unable to adapt to the development of modern enterprises. The research objectives of this study were: 1) To analyze current situation of Chang’an Construction Company, 2). To develop the cost control strategy of construction industry when doing a project in different phases based on its value chain structure.

This study adopted the documentary research method, starting from the theoretical foundation of value chain cost control, to study the cost control system based on the value chain of Chang’an Construction Company, and to get relevant insights and draw conclusions from the analysis. This is because Chang’an, as one of the better companies in the construction industry in terms of business and profitability now, has done a good job of controlling his costs. Through the in-depth study of value chain cost control in Chang’an Construction Company, we have drawn several important conclusions. A professional bidding process lays the foundation for cost-effectiveness and project profitability. The region-specific strategy adopted by Chang’an Construction makes bid preparation relevant and effective. The division of cost management into preparation and construction phases is critical. Careful cost planning, based on comprehensive site analysis, guides spending during the construction phase. A total of three construction phases can have a significant impact on cost control during implementation: the contracting phase, the implementation phase, and the completion phase. Ongoing monitoring and timely adjustments are critical to align with that plan. Post-completion is not only an endpoint but also a phase of reflection and optimization of strategy: Efficient resource allocation and regular stakeholder engagement at the end of a project not only reduce future costs but also enhance a company’s reputation.

Keywords: value chain, cost control, construction industry

Study on Cost Control in the Construction Industry Based on Value Chain Theory—Take Chang’ an Construction Company As An Example

Master of Business Administration (International Program), Siam University, Bangkok, Thailand