Strategic Management - Essay Example

Download file to see previous pages Conclusion 11 References 13 1. Introduction The evaluation of an industry’s performance is commonly developed using a series of criteria. The conditions in the industry’s environment, in all its aspects, have a key role in understanding the industry’s perspectives for a long terms growth. The use of theoretical frameworks and models can also help to check the status of an industry, either in the short or the long term. Current paper focuses on the evaluation of global automotive industry in regard to a particular aspect: the industry’s supply and demand chain. The sector matrix framework has been used for exploring the issue under examination. Two well known theoretical frameworks, the Value Chain Analysis model of Porter and the Product-Commodity Chain of Gereffi have been used for developing an effective sector matrix framework, as aligned with the needs and the challenges of the particular industry. It is proved that the current performance of automotive industry in terms of supply/demand could be improved by controlling rapid expansion so that time is available for responding effectively to the needs of each market. 2. The ‘sector matrix’ framework – description and characteristics The sector matrix framework used for the evaluation of the automotive industry would be based on the following fact: economies worldwide are not equally developed. More specifically, there are economies that have been able to promote technological advances and commerce, achieving an important growth (Cohen 2012). Reference should be also made to countries with quite low economic and commercial performance; these countries have not managed to follow global technological advances (Cohen 2012). The evaluation of the performance of the automotive industry globally would be based on the perception that economic growth around the world is not equally; therefore, the findings of the sector matrix analysis would be related primarily to developed and emerging economies that have the potential to support the development of automotive industry. Another issue that should be taken into consideration when developing the sector matrix related to the automotive industry is the following one: the specific matrix is based on different market and organizational elements; these elements are also included in other theoretical frameworks, such as the Porter’s Value Chain analysis (Graph 1) and the Gereffi’s Product/ Commodity chain. The use of these frameworks when developing the sector matrix analysis of the automotive industry would increase the credibility of findings. The elements of these two frameworks are briefly discussed below. Graph 1 – Porter’s Value Chain analysis framework (source: Bachelor of International Management) The Value Chain Analysis of Porter is presented in Graph 1, above. According to this framework, ‘each company can be represented by a Value Chain’ (Overbeck 2009, p.26). This Value-Chain is consisted by a series of activities that can be characterized either as primary or support activities (Overbeck 2009). The activities that are of critical importance for the supply chain of an organization are the primary ones (Overbeck 2009); still, the support activities are necessary for the effective development of primary activities (Overbeck 2009), meaning that primary activities may face problems and delays in case that they are not combined by the support activities, as included in the Porter’s framework. Among the activities included in the ...Download file to see next pagesRead More