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. Essay

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Question: 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. Introduction This essay will provide a detailed analysis of the three most common tools used to analyze an industry; namely Porter’s Value Chain, Gereffi and Korzeniewicz’s Global Commodities Chain framework and Froud’s Sector Matrix approach. These analytical tools will be used to develop a better understanding of the aviation industry through the eyes of Airbus and Singapore Airlines, one of the top airlines in the world and the flag carrier of Singapore. A detailed analysis of all three analytical tools will allow a deeper understanding on the strengths and limitations of each concept by highlighting common misconceptions companies have about their current industry. Porter’s Value Chain The chain concept is not difficult to understand, it is basically the steps that need to be taken in order to transform raw materials into goods which can then be used by consumers (Kaplinsky and Morris, 2001). Porter (1985) believed that by applying his generic strategies; namely differentiation, cost leadership, and focus, to a business’s product chain, one would achieve competitive advantage. The term ‘Value Chain’ was used by Porter to describe the additional actions that companies performed in order to improve their product chain process in order to obtain competitive advantage. He mentioned that there were two types of processes in the value chain; primary and support, these processes would either add value to the product or save the company on expenses by optimizing or refining certain steps in the product manufacturing process based on customer requirements (Sweeney, 2011). A value chain and a supply chain are complementary views of an extended enterprise, with

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