Sector Matrix vs. Value Chain and Commodity Chain

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. Abstract This paper will investigate the relevance of three tools for analysing and prescribing remedies for improving company performance; Porter’s Value Chain, Gereffi and Korzeniewicz’s Global Commodities Chain framework and finally the Sector Matrix approach as described by Froud, et. al. Values and limitations of these approaches will be recognised and discussed via specific references to Ford Motor Company (hereafter to be referred to as Ford), the third largest corporation in the automotive industry. The Value Chain â€Å"Every firm is a†¦show more content†¦Well-executed, cohesive coordination of these nodes may furthermore result in competitive advantage, specifically if done in the global environment. â€Å"In todays global factory, the production of a single commodity often spans many countries, with each nation performing tasks in which it has a cost advantage.† (Gereffi and Korzeniewicz, 1994: pp. 1) Gereffi and Korzeniewicz argue that there are two distinct types of global commodity chains and ‘buyer-driven’ and ‘producer-driven’. In ‘buyer-driven’ commodity chains retailers, branded manufacturers and branded marketers which usually operate in labor-intensive consumer goods industries (e.g. footwear, toys, and consumer electronics) play key parts in ‘setting up decentralized production networks in a variety of exporting [and usually developing] countries’. 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