Critically Examine How a ‘Sector Matrix’ Framework Is Useful for Analysing Demand and Supply Linkages
Critically examine how a ‘sector matrix’ framework is useful for analysing demand and supply linkages. Use two contrasting examples.
From Industry Value Chain to Sector Matrix
Introduction
Deviating from the industry value chain first introduced by Porter (1985) and later adapted by Gereffi (1996), a fairly recent alternative has been established by Froud, Haslam, Johal & Williams (1998) called the ‘sector matrix’. Until about a decade ago competitive focus was on the production process, the steps taken to develop a product being the ‘primary’ activities and company strategies outlined as ‘support’ activities. With continually increasing complexity within corporations, new and more innovative means of analysis are required. A sector matrix approach “de-emphasizes the organization of production and instead separately analyses the two webs of demand and supply relations” (Froud et al, 1998). What we are examining is whether or not a value chain approach is sufficient for certain firms and how useful a sector matrix can be to a company involved in a more complex infrastructure.
“Connecting the way in which firms migrate into other activities the social and institutional context in which they operate allows us to understand why migration is possible in some sectors and not others” (Haslam et al, 2000). Respectively, we will be studying the British bread company Kingsmill in relation to Porter’s industry value chain, and the British mobile phone company and service provider Orange in relation to Froud et al’s sector matrix.
Figure 1: Limitations of different analysis systems (McDonald, 2012)
Part I: Analysis of Value Chain and Sector Matrix In Breaking the Chains, Froud et al site not so much the flaws of Porter’s value chain, but its limitations. The group states that it “is not [the chain] that is wrong but [the users who] fail to recognize its limits of application” (1998).
Value Chain
Porter introduced his ‘value chain’ as a basic tool
From Industry Value Chain to Sector Matrix
Introduction
Deviating from the industry value chain first introduced by Porter (1985) and later adapted by Gereffi (1996), a fairly recent alternative has been established by Froud, Haslam, Johal & Williams (1998) called the ‘sector matrix’. Until about a decade ago competitive focus was on the production process, the steps taken to develop a product being the ‘primary’ activities and company strategies outlined as ‘support’ activities. With continually increasing complexity within corporations, new and more innovative means of analysis are required. A sector matrix approach “de-emphasizes the organization of production and instead separately analyses the two webs of demand and supply relations” (Froud et al, 1998). What we are examining is whether or not a value chain approach is sufficient for certain firms and how useful a sector matrix can be to a company involved in a more complex infrastructure.
“Connecting the way in which firms migrate into other activities the social and institutional context in which they operate allows us to understand why migration is possible in some sectors and not others” (Haslam et al, 2000). Respectively, we will be studying the British bread company Kingsmill in relation to Porter’s industry value chain, and the British mobile phone company and service provider Orange in relation to Froud et al’s sector matrix.
Figure 1: Limitations of different analysis systems (McDonald, 2012)
Part I: Analysis of Value Chain and Sector Matrix In Breaking the Chains, Froud et al site not so much the flaws of Porter’s value chain, but its limitations. The group states that it “is not [the chain] that is wrong but [the users who] fail to recognize its limits of application” (1998).
Value Chain
Porter introduced his ‘value chain’ as a basic tool
Bibliography: Allied Bakeries. (2012). Kingsmill and the environment. Retrieved 2012, from Kingsmill Bread: http://www.kingsmillbread.com/fresh-thinking/environment/carbon-footprint/ Allied Bakeries Allied Bakeries. (2012). What 's in Bread? Retrieved 2012, from Allied Bakeries: http://www.alliedbakeries.co.uk/what-we-do/the-baking-process.aspx Associated British Foods plc Gereffi, G. (1999, August 23). A Commodity Chains Framework for Analyzing Global Industries. Durham, NC: Duke University. Gereffi, G. (2011, Spring). Global value chains and international competition. The Antitrust Bulletin . Haslam, C., Neale, A., & Johal, S. (2000). Economics in a Business Context (3rd ed.). London: Thomson Learning. Kay, J. (1993). Foundations of Corporate Success. Guildford: Oxford University Press. Kotler, P., Armstrong, G., Wong, V., & Saunders, J. (2008). Principles of Marketing (5th European ed.). London: Pearson Education Ltd. Orange. (2012). changing our ways. Retrieved 2012, from Orange: http://www1.orange.co.uk/about/corporateresponsibility/changing_our_ways.html Orange Orange. (2012). reconditioned explained. Retrieved 2012, from Orange: http://www.orangeaccessories.co.uk/whatrecon.html Porter, M [ 4 ]. A body which “consolidates income from those who are economically active,” specifically “in the labour market” (Haslam et al, 2000)