Use an Example to Critically Examine Whether the ‘Sector Matrix' Framework Is Useful for Analyzing Demand and Supply Linkages in All Industries.

1133 Words Apr 18th, 2013 5 Pages
The business model and environment is changing with the times. The scholars like Michael Porter and Gereffi have tried to use their theories - The Chain Concept, to explain the concept and connection between the supply side and the demand side of the market. Therefore, in order to examine every industry can be well analyzed by using ‘Sector Matrix' concept; we have to understand the Chain concept as well. So in the following paragraphs, I'm going to explain the structure of ‘Chain concept' and ‘Sector Matrix', comparing their difference, and the idea of how ‘Sector Matrix' approached to help understanding the production and consumption side in each industry, with applied the motoring industry as an critical example.
‘The chain concept' is
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Therefore, as maintaining the highest value of its products has become the main management strategy of the firms. The ‘Value chain' helped to analysis both primary and supported activities in order to figure out how to lower down the cost of the product, and turned the product differentiated compare with other competitors.
However, the ‘Value Chain' approach also had some limitation on it. It is very easy to be imitated by the competitors if the end products is easy and didn't require any high technology to produce. As the result, the firm will lose its competitive advantage. Also, the ‘Value chain' approach is easy to be out of date as it only applied to the supply side of the firm, and directly distributed to the end customers that it won't have any additional services added to the product.
Due to the concern of Porter's Value chain approach. Gereffi stated ‘Global commodity chain' that he has attempted not only concerned the production and distribution method, it should have to analysis the supply and demand side in the Global market. He believed that globalization of economy has become the general trend to business economy nowadays. Economic activities have been spread across different countries as a further developing way of their business. We can say that ‘Global commodity chain' is a complicated of processes, or networks that the output of commodity or products. This network organized the interconnection of the

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