Home  Journals  Financial Analytics: Science and Experience  30(216) - 2014 August

Development of strategic management model of an enterprise production expenses

Available online: 6 August 2014

Subject Heading: ISSUES ON ECONOMICS

JEL Classification: 

Pages: 2-13

The article considers that the possibility of model building is substantiated for the implementation of the strategic management of production expenses of an enterprise. The model building application allows describing the sequence of actions that ensure the formation and implementation of functional strategy management of production costs. The paper points out that the main characteristics of a model of strategic management of production expenses of an enterprise are as follows: the stages of the implementation of a process; integration of an enterprise management in the overall process; determination of the impact of the external environment of an entity; definition of the specifics of the internal environment of an enterprise; an availability of feedback. The authors point out that taking into account of the basic characteristics permitted to present the process of the strategic management of an enterprise production expenses in the form of a linear model with feedback, which comprises four main phases: strategic analysis of the external and internal environment for evaluation of basic conditions of production expenses; strategic planning of the process of management production expenses of an enterprise; implementation of functional strategy of management of an enterprise production expenses; strategic control and introduction of corrective changes in the functional strategy of production expenses management. Taking into account the variation of production expanses established in the particular time range, which form their specific structure according to the dominant type of competitive advantage of an enterprise, the paper proposes an analytical model that is used for the implementation of the strategic monitoring of the level of production costs. The analytical model of the strategic control of the production expenses envisages execution of the several conditions, which failure to observe leads to the need for corrective changes in the strategic management of an enterprise production expenses. The application of the model of the strategic management of an enterprise ensures achieving of the competitive advantages of an entity as a result of production costs management in the long-term period based on the foreseeing of possible changes in the external environment, as well as organizational capacity, which depends on an enterprise resources.

Keywords: model, strategic management, strategic control, production expenses, development intensity, commodity market, specific structure, working expenses, enterprise competitive advantage

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