Using an extended example critically examine whether the sector matrix Essay - 2

Using an extended example critically examine whether the sector matrix framework gives a better strategic understanding of product markets than the concepts of product or commodity chains - Essay Example ing, franchising and other similar concepts gave rise to the largely held belief that they are the result of the market oriented strategies however on much larger scale they were the result of larger shift into the overall perception in the market regarding how to achieve and sustain the competitive advantage. Many believed that strategic decisions like outsourcing was an attempt to focus one’s attention to core competencies of the firm however, what was not realized is the fact that the resulting chain effects were largely directed at creating linkages between the demand as well as supply dynamics of the respective industries. The evidence from Japan and other East Asian countries suggested that the inter-organizational cooperation between the different players in the market indicated towards a much larger picture of how the inter-relatedness between the industries as well as companies can lead to the creation of chains. The emergence of subsequent ideas on the value chain as well as commodity chains attempted to define such relationships and linkages however, they lacked the theoretical as well as empirical validity and as such a more unique and innovative method of sector matrix was introduced to overcome the deficiencies of the above two concepts. Michael Porter was one of the earliest proponents of the value chain concept as he considered it as something through which firms can achieve and sustain their competitive advantage. By focusing on the primary as well as secondary activities, firms can effectively achieve the competitive advantage as both the activities are considered as mutually reinforcing each other to achieve the desired strategic objectives. What is also however, critical to note that the value chain, for the first time presented a concept which linked different activities of the firm together and as such the overall success and failure of organizations largely depended upon how successfully the organization managers all these