3.Using an extended example critically discuss the view that a sector Essay - 1

3.Using an extended example critically discuss the view that a sector matrix gives a better strategic understanding of product markets than the concepts of product or commodity chains - Essay Example Some have limiting capabilities while one or two may be considered appropriate for a specific industry. Such is the case of sector matrix framework. It is perceived that this analysis tool gives a better strategic understanding of product market than global commodity chain, and value chain (Haslam, Neale & Johal, 2000). The aim of this essay is to critically analyze whether sector matrix framework is better in strategic understanding of product markets than the concept of commodity chains. Sector matrix has been proved to be most appropriate for analysis of markets especially considering demand and supply. It incorporates ideas from both commodity chain, and Porter’s value chain. Sector matrix is a framework with the capability of working with far much complex products and processes, unlike commodity chains and value chains. For strategic reasons, it is important to know the market demand of a product. Information about demand guides production considering consumer tastes, level of demand, and so on. Different industries and firms have different operations, production systems, and different sectors involved for the final product to be out in the market. These differences determine the level of complexity in a product market, hence the type of analysis tool to understand it better (Haslam, Neale & Johal, 2000). This essay shows why value chain and commodity chain frameworks, cannot be used in a complex industry like the automobile industry, and provide valid rea sons for sector matrix preference instead. The automobile industry is characterised by complex distribution channels, complex products, and high commodity price (Haaslam, Neale & Johal, 2000). This framework is established on the idea that every firm is a collection of activities that are performed to produce, design, deliver, market, and support its products. Within this chain of activities, each firm has to have a successful generic strategy which it