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

In order to conduct internal analysis of John Lewis Partnership, value chain analysis appears to be the most useful, it was used by Michael porter (1985). It is used to analyse activities performed by the business. It helps to maximise value

A value chain analysis is a strategic analysis of an organization that uses value creating activities (Dess, McNamara, & Eisner, 2016, p. 76). The value chain analysis describes a company’s activities and relates them to an analysis of the competitive strength of the company

The basic principle in defining the value chain, according to Michael Porter (Porter, 1985), is that the activities include a variety of disaggregations from the below three perspectives. First, they have different economics, implying that these activities are functioning in different segments of the market. Second, even though the economics differentiation is not that evident, isolated activities should have a potential impact for it. Third, value-adding activities have significant input scale.

A company’s success in developing and sustaining its competitive advantage does not depend on its own value chain but on its ability to manage the value system on which it is a part. An example would be an automobile manufacturer that may have its suppliers set up facilities in close proximity in order to minimize transport costs and reduce parts inventories.

Using a supply and demand framework, I will examine the impact on the equilibrium price and quantity of a product (or service) of an increase in the number of consumers in the market. This is due to my basic knowledge of the fact that when consumers demand for a good or service increases, the supplier has to increase their output to match requirements of the consumer. Overall this means as demand increases, so does supply to meet the need of consumers in those specific markets.

When comparing supply and demand on different types of products there are a few things that are looked at. Price is something that can cause the demand on one good to change to a demand on another. For example when I was looking at different laptops the price ranges for laptops were anywhere from $300 to up and over a $1000 depending. Some are even more. Automatically I knew my budget and knew anything over $500 was out; therefore dropping the demand on the more expensive ones while increasing the demand on the lower priced items. This is pretty much how I

“Competitive Advantage introduces the concept of the value chain, a general Framework for thinking strategically about the activities involved in any business and assessing their relative cost and role in differentiation”. Michael Porter, (1985).

The value chain analysis (shown in appendix) was also generated by Michael Porter. This model is referred to “identifying ways to increase the efficiency of the chain” (Investopedia, n.d.). Furthermore, the overall objective is to produce maximum value with minimum total cost and establish a competitive advantage.

Value chain analysis looks at every step a business goes through, from raw materials to the eventual end-user. The goal is to deliver maximum value for the least possible total cost. It is a systematic approach to examining the development of competitive advantage. The most basic breakdown of primary functions includes inbound logistics, operations, outbound logistics, sales and marketing and service. People should use the other models and frameworks within this software to further differentiate between, and add to, these domains. Product Innovation is one area that is not normally included in the de jure model but is often included in the de facto model. Value Chain Analysis describes the activities that take place in

The value chain, made by Michael Porter, is really important to see how a company structure is created. The value chain is constituted by two parts: support activities (firm infrastructure, human resource management, technology development, procurement) and primary activities (inbound logistic, operations, outbound logistic, marketing and sales, service). (Johnson et al. 2011, p.97-99)

The industry value chain is the process from the suppliers of the raw material to the end customers who demand the service of transportation.

A value chain is the range of activities required to bring a raw product to market. It is in a vertical sequence and is often described as pond to plate, plough to plate, or farm to fork in an agri-business value chain. (Sturgeon, 2001)

The business model and environment is changing with the times. The scholars like Michael Porter and Gereffi have tried to use their theories - The Chain Concept, to explain the concept and connection between the supply side and the demand side of the market. Therefore, in order to examine every industry can be well analyzed by using ‘Sector Matrix' concept; we have to understand the Chain concept as well. So in the following paragraphs, I'm going to explain the structure of ‘Chain concept' and ‘Sector Matrix', comparing their difference, and the idea of how ‘Sector Matrix' approached to help understanding the production and consumption side in each industry, with applied the motoring industry as an critical example.

The value chain is understood as a series of activities linked vertically to create and increase value for our customers (Leiponen and Helfat, 2009). Understanding these issues is important because the firm earn above-average returns only when the value it creates is greater than the cost incurred to create that value (Kasper, Mühlbacher and Müller, 2008). Today’s competitive landscape demands that firms examine their value chains in a global rather than a domestic-only context (Haworth, 2013). When using their unique core competencies to create unique value for customers that competitors cannot duplicate, firms have established one or more competitive advantages (Saliola and Zanfei, 2009). Competitive Advantages (strengths) of the business comes from many separate activities in the design, manufacture, marketing, distribution, so on. Each of these activities contributes to reduce the relative cost of enterprise or create a basis differentiation, thereby can creating competitive advantages for

According to Walters & Rainbird (2007), companies create additional value for their customers by building value chains that identify, produce, deliver, and service customer needs (p. 164). Michael Porter identified the value chain concept in his 1985 book “Competitive Advantage” (Manktelow, n.d.). He proposed a general-purpose value chain that companies can use to analyze their activities and see how they connect. The chain is comprised of five primary activities: Inbound logistics, Operations, Outbound logistics, Marketing and sales, and Service.