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This paper explains the importance of managers continuously thinking of new ways to make money and that failure to be innovate will eventually cause the business to stop making any profit. It then goes on to explain the meaning of sector analysis, describing it as one of the new innovations being used by corporations and managers. The paper provides two examples from industry to illustrate this as well as a diagram.
From the Paper:''Sector matrix defines the activity horizon of a company. As a result, it is sometimes also called "activity matrix". Sector matrix is nothing but a representation of overall finances or revenues of a company coming into the business from its various areas of operations. The matrix is based on modern business and financial thinking. The old way of thinking about the supply was to consider it the function of technology and product. The supply can only be increased if there are significant improvements in the production technology. This concept soon become obsolete and the new way of thinking was developed which stated that firm as a whole should be considered on the basis of its business model and various sources of income. A business usually makes money from diverse sources of profits and, hence, all of these sources should be taken into account before the supply and demand function of a business can be determined.
''Similarly, the old thinking about the demand was about winning the nameplate competition. It was all about improving or differentiating the brand from other competing brands in order to generate demand and make sales. However, the new way of thinking demand is about capturing the expenditure that consumers spend on substitutes and encouraging a complement product in order to increase the overall revenue of the firm. (Bowman & Singh 1993)''
Sample of Sources Used:
- Bowman, E. & Singh, H., 1993. Corporate Restructuring: Reconfiguring the Firm. Strategic Management Journal, vol 14, no. Special Issue, pp. 5-14.
- Brigham, E. Ehrhardt, M., 2010. Corporate Finance, 5th edn, South-Western College, Chicage.
- Brue, S. McConnell, C., 2006. Economics, McGraw-Hills, New York.
- Clement, J., A'unno, T. Poyzer, B.L., 1993. Hospital Corporate Restructuring and Financial Performance. Medical Care, vol 31, no. 3, pp. 971-990.
- Daft, R., 1994. Management, The Dryden Publishing, New York.
Cite this Term Paper:
Sector Anaylsis (2012, November 25) Retrieved July 06, 2020, from https://www.academon.com/term-paper/sector-anaylsis-152048/
"Sector Anaylsis" 25 November 2012. Web. 06 July. 2020. <https://www.academon.com/term-paper/sector-anaylsis-152048/>