REAL ESTATE VALUE CHAIN COST MANAGEMENT IN CHINA

Abstract

As one of the most important economic industries in China, the real estate industry has a vital influence on the country's economic development. In recent years, China's real estate market is becoming more complex with the continuous speculation of the property market and the constant regulation of state policies. The current major problems in China's real estate market mainly come from three aspects. Firstly, there is a serious polarization problem. In developed cities, the real estate price is too high to meet the rigid demand, while in less developed cities, the inventory is too large. Secondly, the macro-environment is very complicated due to the intervention of national policies. The real estate market has huge capital reserves. In order to ensure
the steady development of the real estate industry, the introduction of various policies makes real estate enterprises face greater challenges. Finally, fierce industrial competition. The high returns of the real estate industry lead to the emergence of a large number of investors, which intensifies the competition in the industry, which directly leads to the fact that real estate enterprises must constantly optimize cost control to improve their competitiveness. As a real estate enterprise, if it wants to survive in the complex macro environment, it must constantly optimize its industrial chain to control costs, so as to improve its profitability. The main purpose of this study is to analyze the factors that constitute the cost system of the real estate industry, and optimize the operation process of enterprises through the value chain theory, so as to reduce the cost of enterprises and improve their competitiveness. In this paper, based on porter's value chain theory, the main factors that constitute the cost expenditure of real estate enterprises are analyzed from the two aspects of primary activity and support activity. In addition, Life Cycle Costing management and Objective cost management have been adopted to optimize the operation process and reduce costs for different links.