Sector Matrix

In: Business and Management

Submitted By abzzz
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Essay 3) Use an extended example to discuss how ‘the sector matrix’ framework is useful for analysing demand and supply linkages in an industry.

The end of the 20th century has experienced rapid changes in the way of trading, due to the expansion of capitalism. The Oxford dictionary defines capitalism as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state”. Due to high competition, firms have desperately been trying to reduce costs of production in order to maximise profits. Published in “Competitive Advantage” in 1985, Porter’s value chain is a great example to show how much importance firms gave to the supply side of the market in this period. Porter described the value chain as “a set of products and services linked together in a sequence of value adding economic activities”. In other words, it analyses the stages in which a product is created from raw material until it’s finished, each stage adding value to the product. Gereffi’s ‘Global Commodity chains’ uses the old strategy chains and links them with their political and geographical context, adding a spatial and territorial dimension to the demand and supply in a market.________________________________________
In 1998 in their article “Breaking the Chains? A sector Matrix for Motoring”, Julie Froud, Colin Haslam, Sukhdev Johal and Karel Williams tackled the settled chain concepts by showing its limits regarding complex industries such as motoring or healthcare. They then came out with an alternative approach which focused on “the two webs of demand and supply relations” (Froud, 1998). The sector matrix looks at the firm not as a business operating in an industry but more widely looks at it in a sector perspective.
This essay will attempt to discuss critically how the ‘sector matrix’ is useful for analysing demand…...

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