Using an extended example critically discuss the view that a sector Essay - 2

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 Example The automobile industry is the best industry to examine when it comes to commodity value chains and the sector matrix, because it often produces complex products that have complex distribution channels (Plunkett, 2009). Further, it is also important to understand that the commodity price is very high in this industry. This paper through the use of Ford Company intends to show that a ‘sector matrix’ often gives better and strategic understanding of the product markets as compared to the concepts of product chains. It is important to note that the commodity chain has different value chain approaches. The value chain often describes that activities that usually take place in business and relates them to an analysis of the competitive strength of businesses (Bharati, 2012). The value chain analysis often identifies which activities should be undertaken by a big business and which one is best outsourced. The value chain is important as it gives a strategic understanding of the product markets (Carbaugh, 2013). The commodity chain is important as it also reveals a lot about the international configuration of production as well as the global economy. For this reason, it can be said to represent a distinguished field of study which helps in understanding the different products in the market (Nieman, 2006). Understanding significance of a commodity often represents a comprehensive approach as it includes an array of activities. For example, in the automotive industry, it often identifies the actors as well as the processes that often contribute to the inauguration of merchandise that is consumed by the market (Nieman, 2006). This includes raw resources, the assemblage of different parts and the distribution of the automobiles in the industry (Carbaugh, 2013). The automotive industry is very complex, for this reason there are several perspectives that are used to look at the industry and its products. The first