Strategic Management

Using an extended example critically discuss the view that a ‘sector matrix’ gives a better strategic understanding of product markets than the concepts of ‘product’ or ‘commodity’ chains.

Competition among business has drawn for significant role in this modern business world. In order to sustain competitive advantage, have to ensure that have a clearer view of understanding of the market. This essay will discuss and analyse on how to improve an organisation performance and better understanding of the market trend through three different tools; Porter’s Value Chain, Gereffi and Korzeniewicz’s Global Commodities Chain framework and finally the Sector Matrix approach by Froud,et.al. This essay also aim at critically examining whether the sector matrix framework gives a better strategic understanding of product markets than the concept of value chain and commodity chain. The importance and limitations of these approaches will be discussed and analysed via specific example of Hyundai Motor Company as an automobile industry.

Porter’s Value Chain

The term “Value Chain” was introduced by Michael Porter at 1985, (pg.33-40), in his book “The Competitive Advantage” describe the process or activities that value is added in a product that are perform through design, produce, market, deliver and support to its products (cited in springer.com N.D.), and finally the value of the end products will be increased . According to Michael Porter, the basis of above average performance within an organisation is to sustain competitive advantage through Porter Generic strategic which is cost leadership, differentiation and focus strategy (cited in ValueBasedManagement 2014). Porter classifies these as either primary or support activities. Primary activities are: inbound logistics, operations, outbound logistics, marketing & sales and service. Whereas, support activities are: procurement, human resource management, technological development and infrastructure ( cited in...