Sector Matrix Analysis Essay Example | Topics and Well Written Essays - 2000 words

Sector Matrix Analysis - Essay Example Center of discussion in this paper is sector matrix analysis as one of the frameworks that are useful in analyzing the demand and the supply linkages. To maintain the return on capital, most of the organizations usually struggle to reduce the cost of manufacturing process and to enhance the cost recovering technique. In sector matrix framework, the firm is usually viewed as one that consolidates al the income through a variety of activities that usually occur through the firm. The objective of a sector matrix framework is to analyze the business and actually understand how a complex structure of supply and demand side can actually interrelate and shape the policy of the businesses responses. The side of the demand is very different when compared to Porter’s value chain strategy. In the matrix framework analysis, the household demands for the products, which are finished, are the ones of interest. In addition to that, all the products and services that are usually complementary and are substitutable are added to the list so that they can become part of consumption for the buyer. This form of analysis usually creates a matrix that consists of vertical and horizontal relations unlike the industry chain analysis. In using sector matrix framework, if the manager is to increase the output of the organization, then the organization must be in a position to satisfy the consumer with their products or services and given at a low cost. In the value chain analysis of Porter (1985), the production function is used to determine the output and the input of the organization. The product process is the combination of inputs to provide a specific output. The output here is either in terms of a service offered or in terms of the product (Williams et al. 1994). A matrix framework analysis is created based on some assumptions. Firstly, on the side of the demand, rather than limiting the expenditure on a product that is new by an individual customer, the definition of the te rm is expanded to also include all the expenditure of the household that include all the expenditure of the household. The other assumption that is used to create the sector matrix of analysis is broadening the definition of the supply side. The concept that is used here is to broaden the definition so that the financial range can consist of a variety of activities that should cut across all the sectors of the industry. This is unlike the value chain approach where the definition of a business is limited and is defined by a common product that uses a similar technology. At a national or regional level, the space that is defined in the motoring matrix is usually controlled by the demand of the household and firms from the motoring sector. This sector maintains the cost recovery from a variety of supply side duties. On the side of the supply, the cost recovery that is usually obtained sustains the organizations surpluses that are often reapplied to merge the activities, which occur wi thin the industry sector and additionally across the industry sector. To explain sector matrix analysis, there are two examples that both used the sector matrix to sustain in the market. An instance is the