'Sector Matrix' Gives the Best Strategic Understanding of Product Markets - Assignment Example

Using an extended example critical discussion of the view that a sector matrix gives a better strategic understanding of product markets than the concepts of product or commodity chains Table of Contents Table of Contents 2 Introduction 3 Discussion 3 Different ways of conceptualising motoring 3 Value Chain or Industry Concept 3 Commodity chain of Gereffi 4 Porter’s value chain and Commodity chain in terms of Ford Motor Company 4 Sector Matrix Concept 6 Sector Matrix concept in terms of Ford Motor Company 7 Conclusion 9 References 10 Introduction In this age of competitiveness, sustainability and loyalty are the prime requirements of any organization. This is because; these act as the driving wheels of an organization that may improve its reputation and image in the market as compared to many other rival brands. However, these aspects might improve the performance and reliability of the organization thereby amplifying its position and equity in the market. But in order to attain such type of improvement in the performance of an organization, operating in automobile segment, three curative techniques or tools need to be used. These are value chains, global commodities chain (GCC) framework and sector matrix theory. On the basis of these three remedies, the performance of an organization may be improved that may enhance its portfolio and distinctiveness in the market as compared to many other rival brands. This essay mainly aims to evaluate and analyse, whether value chain concept or sector matrix theory enhances the performance of the organization. Discussion Different ways of conceptualising motoring Value Chain or Industry Concept Value chain includes a specific set of activities that an organization or firm executes, while operating in a particular industry in order to offer a value-added product or service to its customers. The concept of value-chain includes both primary as well as secondary activities such as inbound logistics, operations, outbound logistics services and many others in order to develop an effective product or service as shown in the below figure. So that the organization might enhance its image and dominance in the market, that may improve its profitability among others. Moreover, value chain is also extremely essential for an industry as it helps utilises the raw materials so as to develop the end-products. So, it is also recognised as supply chain. For example: the organization of Ford Motor Company is one of the recognised players that utilises the concept of value-chain in order to improve its efficiency and performance in the market as compared to many other rival brands (Luo & R, 2007, pp. 116-123). (Source: Luo & R, 2007). Commodity chain of Gereffi It is the process that may be used by the organizations in order to gather the raw materials and convert them to products or goods so as to distribute to the customers. Thus, it might be described that it is a procedure that may be used to be used to transfers the products from the producers to the consumers. By doing so, the image and popularity of the organization gets enhanced significantly in the market as compared to other rival players. Porter’s value chain and Commodity chain in terms of Ford Motor Company The value chain of Michel Porter comprises of five main activities such as inbound logistics, operations, outbound logistics, marketing and sales, and after-sales service. Along with this, it also includes some types of secondary activities as well such as procurement, human resource management, technological development and infrastructure. However, porter’s value chain offers a significant impact over its business activities of Ford Motor Company. As a result of which, the performance and reputation of the organization of Ford Motors improved as compared to many other rival players. Apart from this, the management of Ford Motor Company utilises Porter’s value chain concept in order to enhance its manufacturing effectiveness that may improve its sustainability and competitive advantages in the market in long run. The management also utilises this strategy or theory of value chain in order to reduce the emissions (Kotler, 1998, pp. 278-289). Furthermore, the organization of Ford Motor Company utilises the concept of value chain in order to enhance the utilisation of recycled materials so as to improve the corporate social responsibilities (CSR). Thus, by improving all these operations, the profitability and brand value of the organization might get enhanced that may increase its reputation and supremacy in the market among many other existing rival players. Other than porter’s value chain, commodity chain includes a wide range of activities such as design, production and marketing or selling of the product. In order to improve the performance and identity of the brand, the management of Ford Motors Company tried to offer more concentration over the technologies utilised at the time of manufacturing. Moreover, the input and output structure of the organization also includes a diverse range of activities so as to improve its efficiency and reliability in the market among others. Therefore, due to the implementation of these activities, the brand value and market share of the organization of Ford Motor Company might get enhanced. Thus, it might be stated from the above mentioned points, that porter’s value chain and commodity chain proved extremely effective for the organization of Ford Motor Company that enhanced its performance and position in the market. However, in order to improve its sustainability in the market, the organization might enhance its core competencies by implementing varied strategies (Froud & Sukhdev, 2006, pp. 567-578). This might be done by enhancing the inner skills and talents of the employees by offering varied types of training and developmental programs. By doing so, the level of performance and devotion of the employees over the assigned tasks might get enhanced that may improve the performance of the products and services. Moreover, if the level of knowledge might get improved, the employees might offer varied types of ideas so as to develop inventive products that may retain the reliability and loyalty of the customers. Apart from this, the organization might try to implement advanced machines and techniques in order to improve the production system and reduce the defaults. By doing so, the operating system of the organization of Ford Motors company might get enhanced that may improve its effectiveness and mass production systems in the market. Sector Matrix Concept Sector matrix concept is used in order to understand the complex and complicated business activities of an organization or an industry as presented in the figure. By doing so, the organization may evaluate the complexity of distribution channel, demand, supply and many others. Thus, by analysing and evaluating the complexities, the organization may implement or recommend policies or strategies accordingly so as to enhance or retain its image and portfolio in the significant extent as compared to others (Kotler & Keller, 2012, pp. 378-389). For example: the organization of Ford Motor Company utilises sector matrix concept in order to improve its excellence and dominance in the market in terms of operations, marketing and sales activities human resource services, technologies and many others (Guillén & García-Canal, 2012, pp. 278-289). Sector Matrix (Source: Guillén & García-Canal, 2012). Sector Matrix concept in terms of Ford Motor Company The organization of Ford Motor Company utilises the concept of sector matrix in order to maintain a balance within their demand and supply (Grant, 2005, pp. 145-156). So that the organization might come up with the demand and requirements of the customers in an effective way by maintaining the supply chain activities in an effective way (Li, 2010, pp. 223-234). However, in order to maintain the durability of both new and used cars of the organization, the organization needs to offer high concentration over the production and operations system (Meyer, 2004, pp. 523-534). Besides, in order to do so, the organization tries to implement advanced machines and technologies in order to enhance the production of the products (Christensen, 2003, pp. 423-434). However, if the production of the products is maintained in an effective way then the demand may also be enhanced to a significant extent as compared to others. Along with this, in order to supply the manufactured goods to the customers, best sort of marketing activities are also implemented by the organization of Ford Motor Company. By doing so, the organization may balance the demand of its products in the market (Drummond & Ensor, 2006, pp. 565-576). On the other hand, in case of negative circumstances such as economic downturn, the management of the organization of Ford Motors Company became able o understand the complexities of the situation and then reduced the rate of production of the vehicles. This is done, in order to maintain a balance within the demand and supply of the products in the market as compared to many other rival players (ESOMAR, 2008, pp. 256-267). However, at that point of time, in order to retain its image and dependency in the market, the organization offered more attention over the services such as finance, fuel, tax and insurance facilities and many others. This helped the organization to retain its competitive advantage and sustainability in the market. Other than this, with the help of sector matrix concept, the organization became able to understand the importance of utilisation of advanced technologies and machines so as to improve the effectiveness. Besides, this concept might also be used to analyse the inner skills and talents of the human resources (Beatty & Schneier, 1997, pp. 234-245) of the organization that may increase its productivity and profitability in the market among other rival contenders. By doing so, not only the retention level of the employees (Boxall & Purcell, 2011, pp. 223-234) might get enhanced but also the brand portfolio of the organization gets increased significantly (Schneier, 1994, pp. 532-545). Hence, it might be stated that sector matrix concept looks over each and every aspect of the organization so as to improve its identity and reputation in the market among its rival contenders (Swart & et. al. 2012, pp. 678-689). Moreover, it also helps to improve the competitive advantage and opportunities of the organization of Ford Motor Company in this age of aggressiveness (Bradley, 2007, pp. 435-445). Thus, it might be clearly analysed that implementation of sector matrix concept is recognised as a prominent concept that may increase the effectiveness of the organization as compared to value chain and commodity chain (Beall, 2010, pp. 323-334). This is because, it might not only enhance the profitability but also the brand image and market value of the organization of Ford Motor Company in the market among other rival contenders. Conclusion Conclusively, it might be revealed that, sustainability is the prime matter of concentration in this age. However, in order to attain such type of sustainable image in the market, an organization needs to offer more concentration over sector matrix concept. This is because; implementation of this concept helps an organization to enhance not only its operations but also its production systems and human resources. Apart from this, it also offers concentration over its primary activities so as to improve its efficiency in the market among others. Such type of concept is used by the organization of Ford Motor Company that helped it to improve its image and reputation in the market. 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