Critically Examine How Useful the ‘Sector Matrix’...

Critically examine how useful the ‘sector matrix’ framework is for analysing demand and supply linkages in all industries. Use two contrasting examples In recent years several frameworks have been developed for analyzing product markets and competitive advantages of companies. Many academic authors have tried to explain what gives competitive advantage in certain industries and how companies inside these industries should restructure in order to achieve greater profitability. This essay is firstly going to discuss the advantages of Porter Value Chain concept and its similarities to the Commodity Chain frameworks developed by Gereffi. Secondly the essay will contrast their concepts with the sector matrix frame work of Froud and†¦show more content†¦However at national context there are many small companies producing apparel and other simple technology products .There are also many apparel retailers who supply the market and create unregulated competition and supply determined by customer’s taste and preference. As a whole this industry is very flexible because of the big number of small manufacturers and retailers who sell simple relatively cheap products. On the other hand the car industry is more capital intensive and inflexible, driven by the big manufacturers like Mercedes, Toyota and BMW and other industry suppliers. An important feature in the Gereffi’s Commodity Chain is that, it explains the power concentration and interdependence between suppliers and customer. His theory opens new horizons for analyzing supply and demand linkages and competitive advantage factors, not only in one country but in global context .Gereffi argues that competitive pressure is concentrated in the peripheral countries because there are no well established companies there. Commodity Chain analysis is very appropriate for analyzing companies like Nike, which work in the apparel industry because they source their products mainly from poor countries and sells them in developed countries. However these companies like Nike do not produce their own goods, but just create the marketing, branding and distrib ution of products. Nike hires manufactures from different countries with cheap labour market to produce itsShow MoreRelatedCritically Examine How a ‘Sector Matrix’ Framework Is Useful for Analysing Demand and Supply Linkages2247 Words   |  9 PagesCritically examine how a ‘sector matrix’ framework is useful for analysing demand and supply linkages. 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