Critically Examine How a ‘Sector Matrix’ Framework Is Useful for Analysing Demand and Supply Linkages

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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

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
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One will see differences in value chains of firms within the same industry sometimes, as the variance from company to company depends on differences in strategic approach and whether or not the firms have the same breed of vertical supply linkages. Analysis, being constrained by the aspects mentioned above, means the strategic options of a company are limited. Additionally, the value chain can only provide valid analyses to firms which operate within a single industry, defined by common technology (Haslam et al, 2000) (see Figure 1, p. 1). Further, if the company at hand is pertinent to this form of analysis, only the processes from acquiring any raw material to finished manufacture are involved.

Sector Matrix
The matrix Froud et al introduced in response to these short chains is a more complex system which adapts to more intricate networks of manufacturing and production. This new scheme succeeds Gereffi’s studies on global commodity chains, which contributed to the initial development of additional chain analysis types but still followed an overly simple linear concept (Froud et al, 1998). Sector matrix focuses specifically on the extension of linear production chains. In developing a sector matrix, Froud et al “choose to start from demand,” and they believe “it is logical to suggest, therefore, that the limits of the sector should be defined by patterns of
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