ABSTRACT
This chapter contains upstream and downstream companies; the principles on which it is based; underlying assumptions; guidance on application, and relevant issues; and related models. An organization's position in the supply flow of a manufacturing industry should determine its strategy and structure. Performance is the product of many factors but mainly of matching strategy to industry structure and core skills and matching organizational structure to strategy. The centre of gravity is defined as the position between upstream and downstream organizations within an industry. To be successful, and to optimize competitive advantage, an organization should align structure with strategy. An organization may develop and move up or down the supply chain, but moving across the industry's centre of gravity is the most difficult strategy. For downstream organizations value is added by advertising, product positioning, distribution and research and development. The model may be applied to assess upstream and downstream business units within a diversified organization.
