Strategic cost management calculation and evaluation from the view of activity-based costing method

In today´s highly competitive environment, cost management has become a critical survival skill for many firms. Many firms place their cost into a long-term and external competitive advantage building process, and this phenomenon suggests the need to reposition the management of costs as strategic cost management instead of simply reducing costs. Strategic cost measurement and evaluation are two important factors of strategic cost management, but they have been almost ignored from the discussion. The purpose of this paper is to establish a better measurement system and a more efficient evaluation system of strategic cost management. So there are two main parts of this paper: finding a way to measure the strategic cost accurately and then putting it into further use. The third part is a supplementary discussion: how to make the measurement work; how to use the information to assist strategic decision-makers; and have a short version of further discussion.