Free Essay On Strategic Management

Better Strategic Understanding Of Product Markets via “Sector Matrix” Compared to the Concepts of “Product” or “Commodity” Chain.

Organization performance can be improved by means of application of three extremely popular and analytical concepts, namely Value Chain set by Michael Porter, which states that for success in the market the company must offer the consumer a product that has value for him, Global Commodities Chain (GCC) Framework suggested by by Gary Gereffi and Miguel Korzeniewicz, which considers the system of labor and manufacture processes whose finale outcome is a completed good, and the Sector Matrix Model theorized by Julie Froud, which offers an extensive diversity of financial study that is moderately simply to observe because it is capable to find pros and cons of general sources and offers massive statistics that can be linked contrary to one another.

Introduction

The purpose of the essay is to crucially investigate the role of sector matrix concept in the strategic consideration of product markets in comparison with the product or commodity chain approach. For the assignment completion Ford Motor Company was chosen as the best example because it is one of the greatest automobile manufacturers of all time. According to the information from company’s website (2015) Ford is a strong company No. 4. The company is focused on building a strong business, producing products that improve the world. Its pathetic statement Ford Motor reinforces by quite specific cases. The company is active in the field of environmental protection; in the field of environmental technologies it can be called a true pioneer. Therefore, the paper will also examine the impact of alternative to commodity chain method on the company’s activity (Ford Motor Company, 2015).

Concept of “Product” or “Commodity” Chain

Gereffi (1994) stated that commodity chain analysis is aimed at the identification of the public and ecological effects of manufacture and supply chain actions of different goods in order to simplify and set an ongoing control of commodity chain both locally and internationally. Using the method of sustainability effects, the commodity chain concept makes available a method that is important in its particular exclusive meaning (Gereffi, 1994). Internationally, GCC analysis is founded on the effects of legislations on the economy and the way governmental associations regulate and straight market consequences. Understanding commodity chains will help to research and clarify the way manufacture is planned, as well as business and consumption has been internationalized in the global environment. Socio-economic dealings between populations are the main focus for the approach, which depend on the description of commodity chain as producer- or customer-oriented. It typically consists of the analysis of four fundamental components of the chain, namely the input-output configuration, precise geographical locations, governmental and public dealings and numerous establishments external to the commodity chain.
The car business is considered as a distinctive sample of producer-driven chain that is described by complex manufacture structures and the participation of many companies. The industry is much split and includes many suppliers. Pietrobelli & Sverrisson (2004) considered that producer-oriented chains are focused mostly by brand vendors, and the identical situation is showed by Ford Motor, because such well-known car manufacturers as Volvo and Mazda are under its control (Pietrobelli & Sverrisson, 2004). As the company operates in the conditions of globalization with subsidiaries worldwide, its performance is highly influenced by the conditions in these countries.

Sector Matrix Analysis

According to Haslam, Neale & Johal (2000) the Sector Matrix is focused on demand replacement and harmonizing supply collaboration. It is additionally concentrated along with well-adjusted outline that benefits in proficiently perusing the industry surroundings and supporting crucial organizational operation in order to sustain development as well as productivity. Julie, et al (1998) concentrated their common statement on exploration of the Sector Matrix analysis’s benefits of the car industry and the commodity chain examination of the similar business as an automobile business.
In order to form ongoing dealings with consumers, Ford Motor started applying economic facilities to support and reinforce these dealings, recognized as matrix fusion. Moreover, with the intention of attracting / encouraging customers to purchase new autos instead of second hand autos and rise sales, the company decided to provide them with special loans (purchase currently recompense later systems) and coverage via Ford alternatives. It is about harmonizing services. The car industry has been under constant improvement since 1800 and consequently has turned into soaked from the larger volumes of rivalry creating it a developed market, where trades proceeds are generated from substitution sales. The sector matrix concept is extremely valuable, as besides growing perceptibility to exploit sales and revenue, it moreover emphasizes the overall significance of non-productive operation.

Conclusion

Automating everything that can be automated has become a competitive advantage for the company. In Ford enterprises no material is processed by hand, and no process is performed manually. The comparison between two concepts, sector matrix and commodity chain, allows making the conclusion that sector matrix approach is more efficient due to the fact that it offers an extensive opinion permitting it to keep on activity in the competitive market. The sector matrix concept suggests a well-organized and comprehensive examination of goods, which can piece together both harmonizing and rival products and services. It instead of offering a substitute to the commodity chain analysis offers for practices that supplement the restrictions of commodity chain analysis.

References

FORD MOTOR COMPANY (2015). [Online]. Available from: <http://corporate.ford.com/>
GEREFFI, G. (1994). The Organization of Buyer-Driven Global Commodity Chains: How US Retailers Shape Overseas Production Networks. In G. Gereffi and M. Korzeniewicz (eds.), Commodity Chains and Global Capitalism. Westport: Greenwood Press.
HASLAM, C., NEALE, A. & JOHAL, S. (2000). Economics in a Business Context. Boston: Cengage Learning EMEA.
JULIE, F., et al (1998). Breaking the Chains? A Sector Matrix for Motoring. Amsterdam: Overseas Publishers Association.
PIETROBELLI, C. & SVERRISSON, A. (2004). LINKING LOCAL AND GLOBAL ECONOMIES The Ties that Bind. London: Routledge.