VALUE CHAIN ANALYSIS

ABVM 222 (11 ECTS)

JULY, 2012
 Value Chain Analysis: Analyzing value chain

VALUE CHAIN ANALYSIS

ABVM 222 (11 ECTS)

LT1: ANALYZING VALUE CHAIN (4 ECTS)

LT2: DEVELOPING VALUE CHAIN (4 ECTS)

LT3: ANALYZING GENDER IN VALUE CHAINS (3 ECTS)

JULY, 2012

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 Value Chain Analysis: Analyzing value chain

VALUE CHAIN ANALYSIS

(ABVM 222)

LT1: ANALYZING VALUE CHAIN

(4 ECTS)

Compiled by:

Worku Tessema (PhD)

Yemisrach Getachew (MSc.)

JULY, 2012
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 Value Chain Analysis: Analyzing value chain

Table of contents
1. GENERAL INFORMATION 1
1.1. MODULE INTRODUCTION 1
1.2 . RELEVANCE TO THE CURRICULUM 1
2. MODULE OBJECTIVES 2
3. LEARNING TASKS 2
3.1. LEARNING TASK I: ANALYZING VALUE CHAIN 2
3.1.1 INTRODUCTION 2
3.1.2 OBJECTIVE 2
3.1.3 SECTION 1: CONCEPTS OF VALUE CHAIN 3
3.1.3.1 Pre-test 3
3.1.3.2 Section content 3
3.1.3.2.1 Concepts of Value chain 3
3.1.3.2.1.1 Definition of value chain 3
3.1.3.2.1.2 Dimensions of Value Chain 5
3.1.3.2.1.3 Traditional Marketing Systems versus Value Chain Marketing System 7
3.1.3.2.1.4 Value chain versus Supply chain 8
3.1.3.2.1.5 Importance of Value chain 10
3.1.3.2.1.6 Aspects of Value Chain 11
3.1.3.2.1.7 Value Chain Analysis 21
3.1.3.3 Learning activities 30
3.1.3.4 Continuous assessment 31
3.1.3.5 Summary 31
3.1.4 SECTION 2: APPROACHES TO VALUE CHAIN 31
3.1.4.1 Pre-test 31
3.1.4.2 Section Content 31
3.1.4.2.1 The Netherlands Development organization (SNV’s) Approach 31
3.1.4.2.2 German Technical Cooperation (GTZ’s) Approach 37
3.1.4.2.3 NIMPF approach to value chain 40
3.1.4.2.4 The ICEBERG approach to value chain 41
3.1.4.3 Learning Activity 42
3.1.4.5. Summary 42
3.1.5 SECTION 3: ANALYZING CHAIN GOVERNANCE 42
3.1.5.1 Pre-test 43
3.1.5.2 Section content 43
3.1.5.2.1 What is value chain governance? 43
3.1.5.2.2 Why does governance matter? 45
3.1.5.2.3 Why chain governance needed? 45
3.1.5.2.4 Trends in chain governance 46
3.1.5.3 Learning activities 47
3.1.5.4 Continuous assessment 47
3.1.5.5 Summary 48
3.1.5.6 Proof of Ability 49
REFERENCES 49

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1. General Information
1.1. Module Introduction

This module enables learners to have rich insight of the art, knowledge and skills required in
value chain analysis and development. It equips learners with ability to identify chain actors
at each stage and discern their functions and relationships, determine the chain governance,
facilitate chain formation and strengthening, identify value adding activities in the chain and
assign costs and added value to each of those activities, identifying value chain development
strategies and intervention, develop knowledge on different quality management systems and
global quality standards. Moreover, the module will provide clear insight to mainstream
gender across the whole value chain system. The learning tasks under this module include:
Analyzing Value chain, Value Chain Development and Gender and Value Chain.

1.2 . Relevance to the curriculum

The developed BSc curriculum in Agribusiness and Value Chain Management aims to create
competent, highly skilled and committed agribusiness and value chain professionals capable
of bringing difference in commercialization of agriculture in Ethiopia. Graduates of the
program are expected to manage agribusiness firms and industries, promote commercial
agriculture, develop sustainable value chain for major agricultural commodities and
undertake feasibility studies to advice investors, financial institutions, agriculture and allied
sectors.

To achieve the competencies mentioned above, learners should have an adequate knowledge
and skills in analyzing value chain, facilitating value chain development, and in realizing
gender mainstreaming across the value chain. Therefore, this module provides them about the
possible ways and strategies to internalize the concepts of analyzing value chain in a clear
and precise way.
 Value Chain Analysis: Analyzing value chain

2. Module Objectives

This module aims to introduce basic concepts and principles in value chain analysis, and
identify the best interventions for sustainable value chain development. It also aims at
discerning the functions and relationships among actors to build robust value chain systems.

At the end of this unit students will be able to:

• Analyze and map value chain systems
• Apply different value chain approaches and principles for the improvement of the chain
• Identify and strengthen value-adding activities in the chain.
• Determine chain governance to facilitate chain formation
• Facilitate and develop value chain on different commodities
• Analyze gender roles and mainstream gender in value chain

3. Learning tasks

3.1. Learning task I: Analyzing Value Chain

3.1.1 Introduction

This learning task will enable learners to have rich knowledge and skills required for value
chain analysis. It equips learners with the basic concept of value chain, components of value
chain that needs consideration during existing value chain analysis and steps and issues in
value chain analysis. Moreover, approaches for value chain development and chain
governance will be covered in this particular learning task.

3.1.2 Objectives

This learning task will enable learners to:

• Explain main concepts of value chain

• Distinguish the difference between the traditional and value chain marketing systems

• Identify the difference between value and supply chains

• Identify the components of value chain

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 Value Chain Analysis: Analyzing value chain

• Analyse and map commodity value chain

• Explain the basic steps in value chain analysis

• Apply different value chain approaches and principles for the improvement of the
chain

• Determine chain governance or leadership to facilitate chain formation

3.1.3 Section 1: Concepts of Value Chain

3.1.3.1 Pre-test
• Dear learner, what do you understand by value chains?

• Do you think supply chains have the same meaning with value chains?

• Is a value chain approach important for economic growth?

• Do have the knowledge and skill on how to analyze commodity value chains?

3.1.3.2 Section content

3.1.3.2.1 Concepts of Value chain

3.1.3.2.1.1 Definition of value chain

Dear learner before we define what a value chain is, let’s first define what value is?
Value is defined as:

• A fair return or equivalent in goods, services, or money for something exchanged.

• The monetary worth of something: market price.

• Relative worth, utility, or importance.

• A numerical quantity that is assigned or is determined by calculation or measurement.

• The relative duration of a musical note.

• A: relative lightness or darkness of a color: luminosity B: the relation of one part in a

picture to another with respect to lightness and darkness.

• Something (as a principle or quality) intrinsically valuable or desirable! Value is what

makes something desirable!

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 Value Chain Analysis: Analyzing value chain

What makes something desirable?

Things that make something desirable could be price, e.g. cheap or high value; Appearance,
e.g. looks; Experience, e.g. taste; Ease of use, e.g. fresh-cut and washed; Availability, e.g.
year round like Coca Cola. Above all consumers determine value.

The term ‘Value Chain’ was used by Michael Porter in his book "Competitive Advantage:
Creating and Sustaining superior Performance" (1985). “Value chain” refers to all the
activities and services that bring a product (or a service) from conception to end use in a
particular industry—from input supply to production, processing, wholesale and finally,
retail. It is so called because value is being added to the product or service at each step.

By definition: a value chain comprises of interlinked value-adding activities that convert

inputs into outputs which, in turn, add to the bottom line and help create competitive
advantage. This means that businesses within the value chain are involved in handling and
adding direct value or consuming the product and also the service network indirectly
involved in the production (eg. quality control, ICT, financial partners (banks, insurance, and
training and research).

A value chain is a connected string of companies, groups and other players working together
to satisfy market demands for a particular product or group of products.

A value chain links the steps a product takes from the farmer to the consumer. It includes
research and development, input suppliers and finance. The farmer combines these resources
with land, labor and capital to produce commodities.
The value chain describes the full range of activities which are required to bring a product or
service from conception, through the different phases of production (involving a combination
of physical transformation and the input of various producer services), delivery to final
consumers, and final disposal after use. Considered in its general form, it takes the shape as
described in Figure 1.

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 Value Chain Analysis: Analyzing value chain

Design and Production Marketing Consumption/

development -Inward logistics Recycling
-Transforming
of a product - Inputs
- Packaging
- Etc

Figure 1: Four links in a simple value chain

As can be seen from this, production per se is only one of a number of value added links.
Moreover, there are ranges of activities within each link of the chain. Although often
depicted as a vertical chain, intra-chain linkages are most often of a two-way nature – for
example, specialized design agencies not only influence the nature of the production process
and marketing, but are in turn influenced by the constraints in these downstream links in the
chain. In the real world, of course, value chains are much more complex than this. There tend
to be many more links in the chain.

In addition to the various links in a value chain, typically intermediary producers in a

particular value chain may feed into a number of different value chains. In some cases, these
alternative value chains may absorb only a small share of their output; in other cases, there
may be an equal spread of customers. But the share of sales at a particular point in time may
not capture the full story – the dynamics of a particular market or technology may mean that
a relatively small (or large) customer/supplier may become a relatively large (small)
customer/supplier in the future. Furthermore the share of sales may obscure the crucial role
that a particular supplier controlling a key core technology or input (which may be a
relatively small part of its output) has on the rest of the value chain.

A value chain is a network of strategic alliances between independent companies that

together manage the flow of goods and services along the entire value-added chain.
“Strategic” implies that the partnership is entered into deliberately by groups of people who
jointly undertake activities they could not undertake themselves. The result is “competitive
intelligence,” and win-win strategy whereby information that could not be accessed
independently is gathered and shared.

3.1.3.2.1.2 Dimensions of Value Chain

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 Value Chain Analysis: Analyzing value chain

The value chain concept has several dimensions. The first is its flow, also called its input-
output structure. In this sense, a chain is a set of products and services linked together in a
sequence of value-adding economic activities. At its simplest, we can think of a chain as
having five main sections. A product is first designed, then raw materials are purchased and
production takes place; the product is then distributed through wholesalers and retailers. At
each stage, services such as transport or finance may be needed to keep the process going. As
we will see when we start mapping real chains, some of these stages may be subdivided and
others combined or compressed. Nevertheless, the five stages - design, inputs, production,
wholesale, and retail - remain a handy device for understanding each step of the process.

A value chain has another, less visible structure. This is made up of the flow of knowledge
and expertise necessary for the physical input-output structure to function. The flow of
knowledge generally parallels the material flows, but its intensity may differ. For example,
the knowledge inputs at a product’s design stage may be much greater than the material
inputs; production, on the other hand, needs large quantities of materials, but in many cases
requires only standard or routine knowledge.

The second dimension of a value chain has to do with its geographic spread. Some chains
are truly global, with activities taking place in many countries on different continents. Others
are more limited, involving only a few locations in different parts of the world. A UK retailer
may, for example, contract with an Ethiopia fabric supplier to deliver cloth to a garment
producer in Sri Lanka. The finished goods will then be shipped directly to the UK retailer. It
is also possible to identify national, regional, or local value chains. These operate in the same
way as the global chains, but their geographic ‘reach’ is more limited.

The third dimension of the value chain is the control that different actors can exert over the
activities making up the chain. The actors in a chain directly control their own activities and
are directly or indirectly controlled by other actors. A retailer, for example, controls the way
he sells, but may be limited (indirectly controlled) by the range of goods available from
wholesalers and producers. A home worker may find that almost every aspect of her work is
controlled by a distant retailer who has specified the design, quantity, and quality of the
garments she is producing. The pattern of direct and indirect control in a value chain is called
its governance.

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3.1.3.2.1.3 Traditional Marketing Systems versus Value Chain Marketing System

Traditional Marketing Systems
In the traditional marketing system, farmers produce commodities that are "pushed" into the
marketplace. Farmers are generally isolated from a majority of end-consumer and have little
control over input costs or process received for their goods. The primary exception is where
local farmers sell produce in local markets and where there is a direct link from farmer to
consumer. In most traditional selling systems formers/producers tend to receive minimal
profit. Any integration up or down the value chain can help to increase the profit.

In this marketing system, marketing is market “Push”. This tends to be based on independent
transactions at each step, or between each node. Products may often be sold into a crowded
and competitive market. The farmers are largely isolated from the consumer, and from the
demands and preferences of consumers

Research and Development is focused on production and on reducing costs of production,

and may not take account of other steps, links, or dependencies in the chain (e.g.
environmental or social costs).

Value Chain Marketing Systems

In a Value Chain marketing system, farmers are linked to the needs of consumers, working
closely with suppliers and processors to produce the specific goods required by consumers.
Similarly, through flows of information and products, consumers are linked to the needs of farmers.
Using this approach, and through continuous innovation and feedback between different
stages along the value chain, the farmer's market power and profitability can be enhanced.

Rather than focusing profits on one or two links, players at all levels of the value chain will
benefit. Well functioning value chains are said to be more efficient in bringing products to
consumers and therefore all actors, including small-scale producers and poor consumers,
should benefit from value chain development.
Here the system is market “Pull”. This is based on integrated transactions and information.
Consumers purchase products that are produced according to their preferences. The farmer
becomes the core link in producing the products that the consumers desire.

Research and development, whilst including techniques targeted at increased production, is

also focused on consumer needs, and attempts to take account of all of the links, and
dependencies in the value chain, e.g. processing, environmental and social costs or
considerations, as well factors such as health impacts, education and learning.

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Communication is in both directions. It is important that both consumers and processors are
made aware of factors limiting production, just as much as farmers and other producers are
made aware of consumer requirements.
In order to generate improvements in the supply or quality of any product, one needs to
consider all aspects of the range of steps in the chain of events from production to
consumption, including both opportunities and constraints, and the demand and supply of
necessary products and services.
An integral component of the value chain is the agricultural supply chain, and in the literature
these terms value chain and supply chain may at times be used interchangeably, or are at
least closely related. However, there is difference in the two concepts. Let’s learn what the
difference is between value chain and supply chain.

3.1.3.2.1.4 Value chain versus Supply chain

Value chains are concerned with what the market will pay for. Hence, the focus is to make
what you can sell profitably (chain). The main objectives of value chain management is to
deliver quality as desired by the customers/consumers and the focus is on pie-growing,
coordination, and continuous improvement & innovation. Whereas, supply chains are
concerned with what it costs and how best we can utilize our capacity profitably (Individual
business profit). The main objectives of supply chain management are to maximize capacity
utilization and the focus is on pie-sharing, capacity and profit optimization, maintaining
status-quo.

Figure 2: Pictorial depiction of value chain and supply chain

Pie-sharing Vs. Pie-growing

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Manufacturer Manufacturer Retailer
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 Value Chain Analysis: Analyzing value chain

Figure 3: Profit condition of value chain and supply chain

Supply chain management is mainly product oriented while Value chain management is
mainly consumer oriented. Value chain managed when we have taken all relevant indicators
for value creation into account; when we have determined our long term strategy concerning:
in company production, outsourcing, market orientation and seller – buyer relationships.
Supply chain is a subset of Value chain.

Supply chain: one entity often has most power, short-term relationship and value chain is
partnership with shared power, long term relationship.

Elements of the value chain concept are also incorporated within the innovation systems
approach. This involves the use, adoption, uptake, or commercialization of existing
knowledge. Successful innovation not only requires appropriate research outputs, but also
relies on a supportive policy and institutional environment, the availability of credit and
technical support, and the existence of healthy markets and functioning infrastructure. It is
also likely to involve a wide range of key actors from farmers through to policy makers,
private-sector companies, entrepreneurs, as well as journalists. Success is likely to depend on
addressing all of these interrelated factors.

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3.1.3.2.1.5 Importance of Value chain

There is public interest in developing value chains since they involve activities not just of
smallholder farmers, but also of agribusinesses that must be promoted because of their role in
economic development. Economic growth—through the mobilization of industry participants, the
value chain approach can be used to increase the competitiveness of industries and the sustainability
of donor interventions in support of economic growth. This can be effected by:

• Increases market access for smallholder farmers and agribusinesses.

• Increases profitability of optimal-sized investments in agro-processing as markets

expand.

• Keeps jobs and agro-processing industries.

• Ensures dynamic efficiency of agricultural commodities and high-value exports.

• Financial services—value chain analysis can identify mechanisms for financial

service delivery embedded in market transactions and assist lending institutions with
expanding their definition of creditworthiness.

• Natural resources management—the value chain approach can be used to strengthen

the competitiveness of natural resource-based industries and to develop
competitiveness strategies that are beneficial both to the environment and to local
business development.

• Health—value chain tools can be used to mobilize industry participants to identify

and address health-related constraints to competitiveness and can be used to increase
the effectiveness of service delivery in the health industry itself.

• Conflict mitigation and management—value chain analysis can prioritize industry

constraints and opportunities in post-conflict situations and value chain tools can
bring together diverse, even antagonistic, stakeholders to work towards a common
economic vision.

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 Value Chain Analysis: Analyzing value chain

3.1.3.2.1.6 Aspects of Value Chain

The figure below depicts components of value chain for any commodity.

Figure 4: Aspects of value chain

3.1.3.2.1.6.1 Value chain strategy

The set of statements and guidelines at chain level with the purpose to guide the future
development of the chain and its links, and based on the shared ultimate goal of the chain.
Chain strategies cover domains as market coverage, co-ordinated investments, and extension
of the chain with new participants, innovation. Besides chain (oriented) strategies every link
in the chain has its own (supplementary) strategies.

There are three possibilities of chain strategy

I. Low cost strategy or Chain optimization

Due to increasing competition, producers and retailers are forced to minimize costs. Dealing
with individual parts in isolation may strengthen the economic efficiency of one part, but at
the expense of others. Therefore, the successive links must together minimize costs. This can
happen by employing ICT facilities, logistics and elimination linkages. Key issues in this
strategy are efficiency and effectiveness.
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II. Integral chain care

Consumer choices are increasingly being determined by requirements in the area of health
and safety. Care for the environment and animal-friendly production methods are becoming
more important. Striving for sustainability is the new goal set by the western society. All
companies in the chain must co-operate together in order to avoid loss of consumers
confidence. Here quality assurance is the key. Isssues that should get attantion in this
strategy are cconsumers’ concerns, quality, sustainability, safety & health and animal
welfare.

III. Market segmentation or Chain differentiation

Te other chain strategy option is market segmentation or differentiation. Market

segmentation or differentiation refers to providing product or service to the use by the
elasticity that a user have for the service or product. This enables producers to meet their
customer needs by different value creation and product differentiation.

Table 1: Stages in chain strategy development

Element 1st generation 2nd generation 3rd generation

1980-1995 (Europe) 1995-present Present- ….
Linkages 2 4 Several
Focus Product Service Experience
Approach Rationalize Organize Evolution
Driver Industry Consumer Society
Scope Cross border Mondial Londial
ICT EDI ECR Internet
Business Competition Cooperation Cocreation

Over time we see a development of chain strategies. Shift of the focus from product to
service to experience. We see also a shift in drivers, from industry to consumer to society;
technology shift and a shift in how to do business with each other.

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3.1.3.2.1.6.2 Chain Formation

Important points to consider in chain formation are: chain formation & organization, chain
design, chain behavior and chain culture.

Chain Formation is all the activities and conditions necessary to design as well as
implement collaborative relations between chain links with the purpose to support the
productive functioning of the chain efficiently.

Chain behavior refers to interaction of a chain with its environment at a cognitive, an

evaluative and an active level, as well as the interaction between the constituting links of the
chain.

Chain culture is the norms and values shared by the links of the chain with respect to mutual
interaction as well as interaction with the outside world. Outside the shared norms and values
there will be a set of individual norms and values within each link in the chain too. This fact
is the ground for subcultures within a chain.

3.1.3.2.1.6.3 Chain Structure

A. Chain marketing
In chain marketing two things are found to be important.

1. Understanding the consumer and client

In chain marketing it is instrumental to distinguish the difference in a customer and a

consumer. A customer is a business which is the next downstream link within the value
chain. Focus is on Reliability, stability etc. A consumer is the final point of the product flow
for which all the businesses within the value chain work for. Focus is on Product variety,
Variability, etc.

2. Category management & retail concepts

The second issue that needs concern in chain marketing is category management and retail
concepts. Here it is mandatory to understand key consumer trends. There are three key
components of consumer trends i.e. health, convenience and pleasure. Pertaining to health
consumers are conscious of their wellbeing in consuming a product or service. Hence, a
product or service to be delivered must be healthy. Health is explained in different manner at
different societies. In modern societies healthy foods are foods which are organic, and so on.
Regarding convenience there is time factor. The appropriateness of time which the product is
being delivered is related to the convenience that the consumer gets out of the consumption
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of a given product. The third consumer trend component is pleasure. Pleasure is related to the
sensory experience that our customers and/or consumers have to the product matters. Below
is the pictorial presentation of key consumer trends.

Key consumer trends

Figure 5: Key consumer trend

Why is demand driven important?

Why is demand driven important in value chain is because consumer is very often forgotten,
which is the very centre of any business. Innovation should also be demand driven (client,
consumer, and internal clients) and not technology driven because it is the consumer who
will use the product, not the technology, finally. In this respect fashion, design, life style are
very important but must be demand driven.

While adding value to a product or service one need to take in to consideration the following
points: primary function, user friendly, healthy to work with, design (taste and style), visual
relation with culture and values, communities, values of the brand, quality of life (social and
emotional), and the buyer needs uniqueness, he or she is special, status, social identity.

B. Chain logistics
Logistics is about the right amount at the right place, at the right time and at the right quality.
Agri food logistics is the art of moving agricultural and food products from farm to fork. As
a result, logistics management currently is embedded in close cooperation and
communication between companies.

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The simple idea of a nicely organized one-dimensional chain is just a simplified model of
reality. In reality one might better speak of a multi dimensional network.

Logistics originate from the military. When we speak of agri-logistics or agri-food logistics
we focus on the transport, handling and storage of agricultural goods and food products.
Somewhere halfway the last century, probably in the military, the term logistics was coined
to address the specialised control of these functions. Since then, logistics has grown into a
highly specialised profession, which outsiders may find difficult to access by its managerial
jargon and abbreviations. But as the old joke says: logistics is a combination of logic and
mystics. If one recognises both sides of the medal, and looks through the latest buzz-words, it
all makes better sense.

Agri-food logistics are the art of cooperation. The complexity of the business and the high
demands of clients lead to an increasing level of cooperation. Agri-food logistics are an
essential part of business strategy. The importance of agri-food logistics for agricultural
business can never be underestimated. The wrong logistics strategy, though operated
optimally, will kill your business, as was proven by the Dutch tomatoes case. The right
business strategy could be defined as the best strategy to capture the different values in the
value chain.
The rapid evolvement of technologies and skills enables the agricultural supply chains to
develop appropriate logistic concepts and deliver solutions. In the nineteen fifties, the most
important decision for transporters was to leave horse-traction for automobiles. Major
technological breakthroughs have shaped our world of today, allowing global sourcing,
cheap transport and communication. Road trains, roll-on/roll-off trucks, fully automated
warehouses, intelligent tags on containers and consumer packages, when fit into the right
logistic concepts, will dominate the future movement of our products.

C. Quality Assurance
Food quality versus food safety
Most of the time people understand food quality and safety as one concept but it has different
meaning. Food quality is related to what you (consumer or other chain partner/s) expect;
mostly observable by sensory elements(visible, smell, texture etc.); more easily controlled
by taking precautions and less controlled by government agencies. While food safety could
be measured objectively only after laboratory investigation, which takes time and money.
Realisation of food safety is a supply chain related issue and it is high concern for
government agencies.

Types of food hazards

Table 2: Types of food hazard

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Physical Chemical Physiological Microbiological

Stones Environmental and Fytotoxins produced by Mycotoxins in animal feed
industrial contaminants the plant (like cyanide in and food
Pesticides, PCB, heavy cassave) or alkaloid
metals (solanine) in potatoes
Metal pieces Veterinary drugs Toxins (saxitoxins) in Infectious agents
(antibiotics) shellfish (Salmonella, E.coli etc.)
Plastic parts Spore and toxin producing
micro organisms
Radioactive
contamination

Table 3: Special types of food hazards

Entomoeba histolytica Giardia lambia Toxoplasma gondii

Drinking water and raw Drinking water and raw vegetables Contaminated water and
vegetables meat
Dysentery Diarrhoea Severe illness in foetuses

Table 4: Heliments

Heliment type Taenia solium (tapeworm) Trichinella spiralis

Cause Raw or uncooked pork meat Raw or uncooked meat
Symptoms Anorexia , nervous disorders Gastrointestinal disorders, diarrhoea and fever

D. Information & communication Technology (ICT)

Now a day barcode & RFID (Radio Frequency Identification) are being used to give
information about the product for the consumers. This is due to developemnts and
innovations in information and communication technology (ICT) and also because there is
language difference around the world. Product data is put on some form of label (RFID-tag
or barcode sticker). By scanning this label by hand or automatic it will be possible to
recognize the content of the product. Tags are the labels that are put on products to carry the
information. The best known examples are barcodes, passive tags and smart tags. In the fruit
and vegetable value chain, the different partners in the chain have their own barcode.

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 Value Chain Analysis: Analyzing value chain

Figure 6: Barcode reader and barcode types

Figure 7 a: RFID scanner and Figure 7 b: Passive Tag

E. Value chain finance

Value chain finance is considered as financial products and services flowing to and/or
through a value chain to address the needs of those involved in that chain, be it a need for
finance, a need to secure sales, procure products, reduce risk and/or improve efficiency
within the chain

Value Chain Finance Relevance

1. The value chain finance is useful for expanding rural finance and for developing
enterprises.
2. Value chain finance builds on business relationships and transactions to screen &
monitor borrowers, enforce contracts and manage risks & costs.
3. Value chain finance is rooted in buyers' and suppliers' desire to expand markets, and
to secure or increase product quality and quantity.
4. Value chain finance takes a variety of forms in addition to cash lending, such as
advances and in-kind lending.
5. The success and limits of value chain finance are tied to the quality of cooperation
between actors.

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Figure 8: Finance along the value chain

During the early stages of the value chain life cycle finance is a critical bottleneck. Value
chain finance can facilitate smooth information flow and fair allocation of incentives and it is
the key to convert agriculture to agribusiness by promoting entrepreneurship. Value chain
approach with Innovation and market-driven approach can facilitate robust, competitive and
sustainable value chains.

Value chain finance is an intervention in the value chain organisation. And it needs: trust:
long standing relations, short-term small amounts of finance, transparency (market prices),
skills, training how it works, third trusted party (cash flow control).

18

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 Value Chain Analysis: Analyzing value chain

Demand side Needs of finance

Seeds, fertilizers, pesticides, livestock

Input suppliers feed, medicines, farm equipment

Growers Farmers, Dairy Units, fisheries and other

Processing plants, packaging facilities etc

Processors
Inventory, trading and marketing
Retailers & wholesalers
Pre & post-shipment commitments
Exporters
Figure 9: Demand side need of finance in the value chain

Supply side

1.Commercial banks 1.Input suppliers

2.Credit unions 2.Equipment suppliers
3.Co-op banks 3.Marketing companies
4.Agriculture & Dev. banks 4.Traders & wholesalers
5.Microfinance institutions 5.Exporters
6. Non-bank financial inst. 6.Lead farms/firms
7.Leasing companies 7.Corporations
8.Insurance companies 8.Farmers’ organizations
9.Venture capital investors 9.Producers’ companies
10.Private investor funds 10.Family & friends

Governmental subsidies on inputs and exports and tax incentives may also contribute as a source of finance
Figure 10: Finance suppliers for Value chain

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Value chain Analysis Module Analyzing value chain Learning task

F. Sustainability
Sustainability refers to social responsibility. A given value chain said to be sustainable when
it meets the needs of the present consumers without affecting the needs of the future
generation in terms of minimizing environmental, improve social impact and animal welfare
in the value chain in order to guarantee the needs of future consumers. Currently,
sustainability issues include: climate change, biodiversity, exploitation of land and/or water,
social aspects, animal welfare, product safety, waste- and packaging reduction. Issue of
sustainability has about seven core subjects under it. These core subjects are depicted in the
figure below.

Figure 11: Subjects of sustainability

G. Gender

What is Gender?

Social meaning given to being a man or a woman, characteristics used to define a man or
woman that do not stem from biological differences is what we mean gender. While sex is
the biological difference that man and woman has.

Gender as a social relation

Gender relations are specific to societies and time. Gender relations change in response to
wider changes -- they are not fixed for all time. There are differences among women (and
men) - class, caste, religious community, race etc. Gender influences division of tasks, access

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Value chain Analysis Module Analyzing value chain Learning task
to information, knowledge, networks etc and therefore upgrade opportunities exist in this
regard. Gender relations are social relations of power.

Meaning of being a woman or a man differs in every society and changes over time. In a
value chain all actors are related and these relations are relations of power. Gender is a cross
cutting power issue between these actors (which is also related to education, position in the
chain, access to information etc).

Power = for example access to information, knowledge, education wise, networks etc.
Women generally have less access to all these issues, which can be revealed in a gender
analysis.

A buzzing future for honey in Ethiopia - YouTube.flv

3.1.3.2.1.7 Value Chain Analysis

Value chain analysis describes the activities within and around an organization, and relates
them to the analysis of the competitive strength of the organization. Therefore, it evaluates
which value each particular activity adds to the organizations products or services. This idea
was built upon the insight that an organization is more than a random compilation of
machinery, equipment, people and money. Only if these things are arranged into systems and
systematic activates it will become possible to produce something for which customers are
willing to pay a price. Porter argues that the ability to perform particular activities and to
manage the linkages between these activities is a source of competitive advantage.

Value chain analysis facilitates an improved understanding of competitive challenges, helps

in the identification of relationships and coordination mechanisms, and assists in
understanding how chain actors deal with powers and who governs or influences the chain.
Developing value chains is often about improving access to markets and ensuring a more
efficient product flow while ensuring that all actors in that chain benefit. Changing
agricultural contexts, rural to urban migration, and resulting changes for rural employment,
the need for pro-poor development, as well as a changing international scene (not least the
increase in oil prices) all indicate the importance of value-chain analysis.

Value chain analysis plays a key role in understanding the need and scope for systemic
competitiveness. The analysis and identification of core competences will lead the firm to
outsource those functions where it has no distinctive competences.
Value chain analysis is useful for identifying constraints and opportunities for the provision
of financial services. Value chain analysis identifies demand for financial services within
value chains; recognizes that optimal levels of investment require a range of services from a
range of providers, including financial institutions and value chain actors; and prioritizes

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needs for donor intervention in financial services and limits of Value Chain Finance are tied
to the quality of cooperation between actors.

3.1.3.2.1.7.1 Basic concepts in agricultural value chain analysis

There are four major basic concepts in agricultural value chain analysis: value chain, stages
of production, vertical coordination and business development services. Since value chains
are composed of hierarchy of chain stages, the concept of stages of production is basic in
value chain analysis. Closely related to the stages of production is the concept of vertical
coordination. A value chain needs business support services to function. Hence, the fourth
basic concept is the concept of business development services.

3.1.3.2.1.7.2 Purposes of value chain analysis

Value chain analysis is conducted for a variety of purposes. The primary purpose of value
chain analysis, however, is to understand the reasons for inefficiencies in the chain, and
identify potential leverage points for improving the performance of the chain, using both
qualitative and quantitative data. In general, agricultural value chain analysis can be used to:
• understand how an agricultural value chain is organized (structure), operates (conduct) and
performs (performance). Performance analysis should concern not only the current
performance of the value chain, but also likely future performances, as well.
• identify leverage interventions to improve the performance of the value chain
• analyse agriculture–industry linkages
• analyse income distribution
• analyse employment issues
• assess economic and social impacts of interventions
• analyse environmental impacts of interventions
• guide collective action for marketing
• guide research priority setting
• conduct policy inventory and analysis
In sum, the concept of value chain provides a useful framework to understand the production,
transformation and distribution of a commodity or group of commodities. With its emphasis
on the coordination of the various stages of a value chain, value chain analysis attempts to
unravel the organization and performance of a commodity system.
The issues of coordination are especially important in agricultural value chains, where
coordination is affected by several factors that may influence product characteristics,

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Value chain Analysis Module Analyzing value chain Learning task
especially quality. The value chain framework also enables us to think about development
from a systems perspective.
Key issues in value chain analysis

• Share of benefits and costs from value chains and market development.

• Distribution of added value along the chain.

• Market share of the different actors and corresponding size of sub-sector.

• Institutional and legal framework, such as regional production and processing zones,
trade protocols, regulations on movement of people, agriculture marketing policies
and financial institutions.

• Growth potentials (nodes with market potential).

• Infrastructure development.

• Potential for poverty reduction and rural income generation.

• Potential for sustained food supply at affordable competitive prices for consumers.

• Potential for maximization of returns on capital investment at different levels of the

value chain strategy.

• Potential for strengthening sector and regional complementarities and

interdependence through implementation of horizontal and vertical integration
approaches in the commodity production value chains strategy.

3.1.3.2.1.7.3 Steps in Value Chain Analysis

Value chain analysis is a process that requires four interconnected steps: data collection and
research, value chain mapping, analysis of opportunities and constraints, and vetting of
findings with stakeholders and recommendations for future actions. These four steps are not
necessarily sequential and can be carried out simultaneously.

The value chain team collects data and information through secondary and primary sources
by way of research and interviews. Mapping helps to organize the data, and highlights the
market segments, participant/actors, their functions and linkages. The collected data is
analyzed using the value chain framework to reveal constraints within the chain that prevent
or limit the exploitation of end market opportunities. The resulting analysis of opportunities
and constraints should be vetted with stakeholders through events such as workshops, focus
groups or “reporting-out” days.

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Step One: Data Collection
Good value chain analysis begins with good data collection, from the initial desk research to
the targeted interviews. The value chain framework—that is, the structural and dynamic
factors affecting the chain—provides an effective way to organize the data, prioritize
opportunities and plan interventions.
The desk research consists of a rapid examination of readily available material. The aim is to
familiarize the team with the industry, its market and the business environment in which it
operates, as well as to identify sources for additional information. Information such as
statistics on exports/imports, consumption reports, global trade figures, etc., can be obtained
through the Internet, phone calls and documents from trade, commerce and industry
ministries, specialized industry journals, and professional and trade association newsletters.
Once the desk research is conducted, an initial value chain map can be drafted for refinement
during the primary research phase.
Interviews are conducted with 1) firms and individuals from all functional levels of the chain,
and 2) individuals outside the value chain such as writers, journalists or economists. In
addition to providing information about the movement of product and the distribution of
benefits, the interviews should inform on value chain actors’ current capacity to learn; how
information is exchanged among participants; from where they learn about new production
techniques, new markets and market trends; and the extent of trust that exists among actors.
Interviews can help to identify where chain participants see opportunities for and constraints
to upgrading. Missing or inadequate provision of services necessary to move the value chain
to the next level of competitiveness can be identified locally, regionally or nationally.

In addition to individual interviews, focus group discussions are a useful way to explore
concepts, generate ideas, determine differences in opinion between stakeholder groups and
triangulate with other data collection methods. The group may consist of 7-10 people who
perform the same or a similar function in the value chain. Guided discussion better captures
the social interaction and spontaneous thought processes that inform decision making, which
is often lost in structured interviews.

The qualitative data gathered by these methods will reveal dynamic factors of the value chain
such as trends, incentives and relationships. To complement this, quantitative analysis of the
chain is necessary to provide a picture of the current situation in terms of the distribution of
value-added, profitability, productivity, production capacity and benchmarking against
competitors. Analyzing these factors highlights inefficiencies and areas for reducing cost.

Step Two: Value Chain Mapping

Value chain mapping is the process of developing a visual depiction of the basic structure of
the value chain. A value chain map illustrates the way the product flows from raw material to
end markets and presents how the industry functions. It is a compressed visual diagram of the

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data collected at different stages of the value chain analysis and supports the narrative
description of the chain.

Porter distinguished two important elements of modern value chain analysis: The various
activities which were performed in particular links in the chain. Here he drew the distinction
between different stages of the process of supply (inbound logistics, operations, outbound
logistics, marketing and sales, and after sales service), the transformation of these inputs into
outputs (production, logistics, quality and continuous improvement processes), and the
support services the firm marshal to accomplish this task (strategic planning, human resource
management, technology development and procurement).
The importance of separating out these various functions is that it draws attention away from
an exclusive focus on physical transformation.
Porter distinguishes between primary activities and support activities. Primary activities are
directly concerned with the creation or delivery of a product or service. They can be grouped
into five main areas: inbound logistics, operations, outbound logistics, marketing and sales,
and service. Each of these primary activities is linked to support activities which help to
improve their effectiveness or efficiency. There are four main areas of support activities:
procurement, technology development (including R&D), human resource management, and
infrastructure (systems for planning, finance, quality, information management etc.).

Some thought about the linkages between activities: These linkages are crucial for corporate
success. The linkages are flows of information, goods and services, as well as systems and
processes for adjusting activities. A certain commodity value chain can be mapped as:

Figure 12: A comprehensive value chain map

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The purpose of a visual tool in the analysis process is to develop a shared understanding
among value chain stakeholders of the current situation of the industry. The mapping
exercise provides an opportunity for multi-stakeholder discussions to reveal opportunities
and bottlenecks to be addressed in subsequent stages of the chain development. Maps also
help to identify information gaps that require further research.
A two-phased process for developing the value chain map is recommended, as follows: a)
initial basic mapping and b) adjusted mapping. Initial mapping is based on the information
derived from desk research and knowledge at the outset of the analysis. The second phase
includes revisions based on interviews and feedback from firms and individuals brought into
the analysis process. As value chain maps are representations of a complex system, the
analysis must balance the need to generalize with the desire to charge the map with details.
Mapping is a dynamic process; therefore, adjustments should be made as needed.

Step Three: Analysis of Opportunities and Constraints Using the Value Chain
Framework
Step three uses the value chain framework as a lens through which the gathered data is
analyzed. The framework is a useful tool to identify systemic chain-level issues rather than
focus on firm-level problems. While interviews give the value chain team the chance to
gather information from individual firms, the value chain framework helps to organize this
information in such a way that the analysis moves from a firm-level to a chain-level
perspective. If the chain cannot be competitive, the success of individual firms is
compromised. Therefore, taking a systemic approach is key to sustaining the competitiveness
of the chain and the micro and small enterprises (MSEs) operating within it.

The factors affecting performance of the chain are further analyzed to characterize
opportunities and constraints to competitiveness. These factors are classified under structure
and dynamic components. The structure of the value chain influences the dynamics of firm
behavior and these dynamics influence how well the value chain performs in terms of two
critical outcomes: value chain competitiveness and MSE benefits.

Structure
The structure of a value chain includes all the firms in the chain and can be characterized in
terms of five elements:
1. End market opportunities at the local, national, regional and global levels—the
framework prioritizes this element because demand in end markets defines the
characteristics of a successful product or service.

2. Business and enabling environment at the local, national and international levels—
this includes laws, regulations, policies, international trade agreements and public

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infrastructure (roads, electricity, etc.) that enable the product or service to move
through the value chain.

3. Vertical linkages between firms at different levels of the value chain—these are
critical for moving a product or service to the end market and for transferring
benefits, learning and embedded services between firms up and down the chain.
4. Horizontal linkages between firms at the same level of the value chain—these can
reduce transaction costs, enable economies of scale, increase bargaining power, and
facilitate the creation of industry standards and marketing campaigns.

5. Supporting markets—these include financial services, cross-cutting services (e.g.,

business consulting, legal advice and telecommunications) and sector-specific
services (e.g., irrigation equipment, design services for handicrafts).

Dynamics
The participants in a value chain create the dynamic elements through the choices they make
in response to the value chain structure. These dynamic elements include:

1. Upgrading—increasing competitiveness at the firm level through product

development and improvements in production and marketing techniques or processes
2. Inter-firm cooperation—the extent to which firms work together to achieve increased
industry competitiveness

3. Transfer of information and learning between firms—this is key to competitiveness

since upgrading is dependent on knowledge of what the market requires and the
potential returns on investments in upgrading.

4. Power exercised by firms in their relationships with each other—this shapes the
incentives that drive behavior and determines which firms benefit from participation
in an industry and by how much
Each plays a role in influencing value chain competitiveness. Using a table format, these
factors of the value chain framework can be evaluated in terms of offering opportunities for
upgrading and the constraints to taking advantage of these opportunities.

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Value chain Framework

Figure 13: Value chain framework

Step Four: Vetting Findings of Chain Analysis through Stakeholder Workshops

Value chain analysis helps develop a private-sector vision to reflect stakeholders’ interest in
improving the efficiency and competitiveness of the chain. The fourth step, vetting findings,
uses value chain analysis through a structured event (or series of events) like a workshop or
reporting-out day to facilitate discussion with and among selected participants.

The objective of these events is to bring participants together who are responsible for critical
market functions, service provision, and the legal, regulatory and policy environment. The
goal is to have these participants—who have an incentive to drive investments in
upgrading—to develop and assist in implementing a private sector-led competitiveness
strategy. To develop this strategy, the stakeholders will need to prioritize the opportunities
and constraints identified during the value chain analysis. With an open format, such
structured events foster buy-in to the analysis process.

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Participants are selected based on the role they play in the value chain, or their responsibility
for critical market functions. There should also be MSE, medium and larger firm and
association representatives who, during the interview phase, exhibited an understanding of
the issues related to the value chain (especially the opportunities), a strong interest in the
types of questions posed during the interview, and leadership skills among peers or the
community.

Vetting events can take on several forms from simple one day reporting-out sessions to more
structured workshops that stretch to two or three days. The events are planned to reinforce
the importance of knowing and understanding the end market. In presenting the findings of
the value chain analysis, workshop leaders should stress that to remain competitive,
stakeholders and other participants must continuously learn what end markets demand in
terms of product specifications, quality, and other requirements.

It can be powerful to have a series of buyers present at the workshop. Where not possible, a
phone call or pre-recorded video interview can be an effective means for stakeholders to see
and hear directly from the buyer.
The event should include facilitated discussions, review and adjustments of value chain map
and a review of the analysis table mentioned above. For this exercise, it is recommended that
the completed table be projected on a screen, and additions and modifications made during
discussions inserted with the computer projecting the table. This assures a participatory
process and on-the-spot adjustment witnessed by attending participants. If changes are made,
the updated table can be rapidly printed and distributed to participants before they leave.
In environments characterized by a number of donor partners working with the same group
of firms, burn-out and skepticism particularly among the most important change drivers is
likely. In some instances, the firms most important to driving change may not attend a full-
day workshop even though they may be highly committed to the upgrading process and
strategy for making the industry more competitive. If time allows, the analysis team can meet
with these firms in advance of the workshop to convince them of the value of the competitive
planning process. If this is not possible, the analysis team should meet with these firms as
soon after the workshop as possible to vet findings and secure buy-in or commitment to the
industry competitiveness planning process.
In most industries, it is rather unusual that a single company performs all activities from
product design, production of components, and final assembly to delivery to the final user by
itself. Most often, organizations are elements of a value system or supply chain. Hence, value
chain analysis should cover the whole value system in which the organization operates.
Within the whole value system, there is only a certain value of profit margin available. This
is the difference of the final price the customer pays and the sum of all costs incurred with
the production and delivery of the product/service (e.g. raw material, energy etc.). It depends
on the structure of the value system, how this margin spreads across the suppliers, producers,

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distributors, customers, and other elements of the value system. Each member of the system
will use its market position and negotiating power to get a higher proportion of this margin.
Nevertheless, members of a value system can cooperate to improve their efficiency and to
reduce their costs in order to achieve a higher total margin to the benefit of all of them (e.g.
by reducing stocks in a Just-In-Time system).
Hierarchy Firms are vertically integrated, so that they can directly control all or most of the
activities of the chain
Some value chains can best be described as balanced networks. Firms form networks, but
because the power relations among them are fairly equal, no one firm or group of firms
dominates the network. In balanced networks supplier and buyer jointly define the product
and combine complementary competencies. An example might be collaboration between
producers of ‘eco-friendly’ knitted fabric and garment manufacturers who make this fabric
into fashion garments. Since both are involved in high value-added production, they can
work together more or less as equals.

Other value chains are governed by lead firms. We call these directed networks. The lead
firms do not merely buy goods in the market. Rather they specify what is to be produced by
whom, and they monitor the performance of the producing firms. In some cases, the
networks are directed, or “driven”, by large producers such as transnational corporations or
other large integrated industrial enterprises. The automobile industry is a good example of a
producer driven value chain. The large automobile companies dominate the chain by setting
the specifications that must be followed by firms joining their networks of component
suppliers.

Other chains are driven by the buyers of the products. In clothing and footwear, many
leading brand-name companies do no production themselves. Instead, they concentrate on
design and marketing. Their strength as buyers enables them to dominate certain value
chains. They determine what fabrics will be used, what styles will be produced, and in what
colors.
Finally, some chains are characterized by vertically integrated firms. In these cases, firms,
acting through their own decision-making hierarchy, can directly control chain activities.
Value Chain Analysis - YouTube.flv

3.1.3.3 Learning activities

Problem based learning tasks

Number Case Description

PBL 1.1 Learners will be expected to consider a given case to analyse and map a specific
commodity value chain.

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Value chain Analysis Module Analyzing value chain Learning task
Practical Activities

Number Title Hours

P1.1 Field visit will be arranged for Identification of key actors and 25
activities in value chain and present to the class

3.1.3.4 Continuous assessment

Assessment plan for continuous assessment <Value Chain Analysis>
Performance criteria Category /Method of assessment Relation with competencies
Identifying value adding Case study, observation, written To identify
activities in the chain exams, Assignment
Analysis of value chains Scenario analysis, written exam, To analyse
and strategies Assignment
Identifying key actors & Report, presentation To present
activities in value chain

3.1.3.5 Summary

Dear learners, in this section you have learnt that concept of value chain. Here, you have
acquainted yourself with the basics of value chain such as definitions, traditional and value
chain marketing systems, dimensions and aspects of value chain, and steps in value chain
analysis, its difference with supply chain and skill and knowledge of commodity value chain
analysis.

3.1.4 Section 2: Approaches to value chain

3.1.4.1 Pre-test
Dear Learner, what types of approaches do you know for value chain development? Do you
have any practical experience with one or more of these? What differences and similarities
do you see between the different approaches? Do you think we can use all of these
approaches in agricultural value chains in Ethiopia? How?

3.1.4.2 Section Content

We will present you with four different approaches to value chain. Some of these are based
on experiences in Ethiopia.

3.1.4.2.1 The Netherlands Development organization (SNV’s) Approach

The Netherlands Development Organization (SNV) is a non-governmental organization

(NGO) operating through funding mainly from the Netherlands Government. The SNV

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Business Organisations and their Access to Markets (BOAM) programme, financed by the
Embassy of the Kingdom of the Netherlands and the Irish Embassy, supports the delivery of
vital businesses and organisational development services in Ethiopia along the whole of the
following selected agricultural value chains: oil seeds and edible oils, milk and dairy
products, honey and beeswax, pineapple, apple and mango.

SNV’s BOAM programme considers that enhancing the inclusion of small farmers in local,
national and global value chains, is a good strategy to increase production, income and
employment opportunities for these small farmers. It follows a demand driven value chain
development approach which is characterized by the combination of strengthening whole
sectors as well as supporting individual businesses as traders/exporters, processors and
farmer organizations and their business to business value chain relationships. Sector
development provides for new opportunities to the actors in the sector, business-to-business
development assures that the opportunities are turned into concrete results. These results are
related to the increased number of business to business value chains, increased volumes,
value added, equitability of margins, efficiency and overall competitiveness of individual
businesses and the value chain(s). SNV and other service providers are providing services,
which will be increasingly market based and with increased volumes to match the up-scaling
requirements of the value chains. To achieve a sustainable up-scaling of the approach to new
sectors and value chain(s), SNV works on knowledge development and an increased service
provider capacity building.

Key interventions areas for this demand driven value chain approach are therefore: sector
development; business development; knowledge development and learning; and Service
capacity development (see figure 14).

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Value chain Analysis Module Analyzing value chain Learning task

Figure 14: SNV’s Value chain development approach

Source:

Now let us consider what SNV is doing in each intervention area in order to develop and
enhance demand driven value chain.

Sector development
Sector development is seen as providing opportunities for business development to turn these
opportunities into concrete results. A critical number of value chain actors and other
stakeholders are instrumental to steer the sector development. In particular prominent private
sector actors in trade and processing are important to make use of business opportunities.

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Value chain Analysis Module Analyzing value chain Learning task
Furthermore these private sector actors can develop good relationships with the public sector
and stimulate the interest of the public sector. Other relationships between direct value chain
actors, between actors and private and public service providers provide a multitude of
potential win-win relationships.

Associations and stakeholder events are important in defining critical and implementable
sector development interventions. The enabling environment can be supportive with, for
example favourable policies, intelligence, control and standardization, accreditation and
sector or value chain promotion, providing the necessary incentives for decreased transaction
costs. This will then result in increased efficiency and improved sector competitiveness.
However, small informal “spot” market transactions and monopolistic market arrangements
are dominant, creating limited opportunities for business development. This requires
financing critical sector projects as public good or as temporary interventions in particular in
the embryonic stages of value chain development.

To support sector or institutional development SNV provides the following products as

services:
(1) Multi Stakeholder Platforms (MSP) - Promoting efficient and equitable linkages for the
economically active poor along the value chain. Promote strategic partnerships with key
stakeholders using the Public Private Partnership (PPP) model. Promote “meaningful
dialogue” focusing on impacts and economic performances, strategic planning, cooperative
implementation or action, collective monitoring and mutual learning;
(2) Sector Association Strengthening (SAS) - Developing the capacities of associations so
that they are able to provide services to members in a sustainable way and are recognized
representatives by other stakeholders;
(3) Market Intelligence (MI) - Promoting access “to both” supply and market information in
an interactive manner along the segments of the value chain capturing market signals (trends,
requirements, standards, new technologies and new products) and fostering pro active
reactions about VC “resilience”;
(4) Effective Public Policy Management (EPPM) - Facilitating processes of design,
implementation, and evaluation of public policies under an analytical framework for
effectiveness and inclusion.
(5) Value Chain Financing (VCF) - Facilitate sustainable business linkages between service
providers and their clients along the segments of the value chain. Advocate for strategic and
digressive “grants”, “subsidies”, and “debt” and “equity” instruments to kick off and spur the
growth of value chain actors.
(6) Appropriate Technology Promotion (ATP) – Disseminating and propagating locally
developed and successfully tested appropriate technology innovations.

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Business development
Business development is seen as turning the opportunities created by sector development into
concrete results. These results are related to the increased number of business to business
value chains, increased volumes, value added, equitability of margins, efficiency and overall
competitiveness of individual businesses and the value chain(s).

Important are here the linking of businesses to new or existing markets in, for example new
processors to farmer organizations, new products for existing markets or new retail or export
markets. Different arrangements can be used like the usage of a joint venture, setting up trade
relations, development of a linkage (processing company), EU labelling for eco markets etc.
In many value chains there is a change from a transaction based relation towards a contract
based relation. Part of the formal or informal contracting is often all kinds of embedded
services provided by private service providers or own staff. So besides price per volume and
differentiated qualities, arrangements are made about logistical, technical and financial
service provision, quality control and measurement, market information and even
organizational services. These services can include the services provided by the public sector
and other development facilitators. New type of products and qualities means often different
input material, of which the commercial availability is very important to keep up with the
demand. Innovative business strategies and arrangements are needed for matching the
demand and supply of inputs. These strategies and arrangements contain substantial risks for
the individual business or the business to business value chain relationship, which justifies
testing in the form of subsidized pilots.

Value chain development means that farmer (organizational) development is coordinated by

the downstream private sector in the business to business value chain. Thus farmer
organizations are receiving technical, financial and organizational services however the
actual delivery is often the mandate of the public sector and other development organizations.
From the perspective of the value chain(s) increased market and business orientation is
however required as part of the services delivered to farmer organizations.

Access to capital for input suppliers, processors, traders and farmer organizations to finance
investments is important to make sure that tested business to business pilot innovations are
being copied or up-scaled by other value chain actors. Information on sector development,
key figures, risk profile etc. is therefore needed to give interested outsiders the right
information to make an investment decision.

To support business development SNV provides the following products as services:

(1) Producer Group Strengthening (PGS) - Facilitating the growth and graduation of informal
businesses, producers and natural resource users, to the formal sector. Strengthening
legitimacy, credibility and viability of the different forms of the economic group is required.

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Value chain Analysis Module Analyzing value chain Learning task
(2) Business-to-business support (B2B) – Facilitate the development of business relationships
and arrangements between downstream traders, processors and farmer organizations on one
side and small farmers and their organizations on the other side, to guarantee that a reliable
supply and market outlet is assured.
(3) Private Sector actor Strengthening (PSS) - Develop the capacities of private sector actors
like processors and traders so that they are able to improve business operations in terms of
market response, business partnerships and the accessibility to financial and other market
services.
(4) Value Chain Financing (VCF) - Facilitate sustainable business linkages between service
providers and their clients along the segments of the value chain. Advocate for strategic and
digressive “grants”, “subsidies”, “debt” and “equity” instruments to kick off and spur the
growth of value chain actors.

Knowledge development and learning

To achieve a sustainable up-scaling of the approach to new sectors and value chain(s),
knowledge development and learning is critical. Knowledge areas related to constraints from
embryonic to maturity stages of value chain development are however important. Learning in
the form of testing innovative business to business value chain pilots, exchanging sector
development experiences and overall program level documentation will have to assure that
critical knowledge is generated.

Replication is taken place in the form of up-scaling business to business value chains within
a specific sector, up-scaling sector development to other sectors and up-scaling the overall
value chain approach in new programs.

Business development service provider development

A strong service sector is critical to address the increasing demand for services in the up-
scaling of business to business value chains. It is expected that these services will have to
become increasingly market based, since customer confidence will improve with the
increasing volumes and use of the services in the up-scaling of the business to business value
chains. Therefore service providers are promoted in providing services from the start of any
value chain support intervention and are integrated in business to business value chain pilots.
On top of this specific capacity development programs are developed as the young
professional program and competency pool to assure a substantial increase of the supply of
quality services.

To achieve a sustainable up-scaling of the value chain approach to new sectors and value
chain(s), these service providers will increasingly take over SNV services or products. To
support service capacity development SNV provides the following services:

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Value chain Analysis Module Analyzing value chain Learning task
(1) Service Providers Strengthening (SPS) - Developing the capacities of services providers
so that they are able to capacitate both economic chain actors as well as non-economic actors.
(2) Local Capacity Development Facility (LCDF) - increase the access to funds for local
capacity development in a way that empowers local actors and allows them to acquire tailor-
made services, geared towards their needs.

For practical example of SNV’s value chain development approach, please read its
intervention in honey and beeswax value chain development (SNV report .... 2011). In short,
SNV, in collaboration with the Honey Exporters Organisation (EHBPEA), organised national
honey promotion events, connecting the Ethiopian Honey Sector with partners worldwide.
This resulted in new business relationships, among others for the export of honey to the EU.
In order to concretize these opportunities it was achieved that Ethiopia is listed for EU
accreditation for the imports of honey from Ethiopia. Four honey processors are now
operating, or are in the process of opening, company apiaries in the production areas. BOAM
facilitated the training of rural producers who are now entering into out-grower agreements
with processors: they produce honey according to market requirements.

3.1.4.2.2 German Technical Cooperation (GTZ’s) Approach

German Technical Cooperation (GTZ) is also a non-governmental organization engaged in
rural development activities through funding mainly from German government.

Following the definition by Kaplinski and Morris (2003) that ‘value chain describes the full
range of activities which are required to bring a product or service from conception, through
the different phases of production (involving a combination of physical transformation and
the input of various producer services), delivery to final consumers and final disposal after
use’, GTZ promoted value chain of honey in Nepal focusing on two areas: 1) market
orientation meaning the greater volume sold and/or better end price gained, 2) income
distribution- the poor benefit at least equally or above average from the income generated
(poor get their “share of the cake”). GTZ interventions are targeted to strengthening the
relationship between actors at different level of value chain (production, processing, trading).

GTZ used the following value chain integration map to explain its experience in value chain
development in SiriLanka.

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Value chain Analysis Module Analyzing value chain Learning task

Figure 15: GTZ Value chain integration

The following table shows key intervention areas of GTZ in value chains of two commodities
(spices and rubber products).

Table 5: GTZ Value Chain Analysis result matrix

As table xx shows GTZ has intervened to upgrade critical skills, in the process of
standardization, certification and quality improvement, and in organizational and linkage

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Value chain Analysis Module Analyzing value chain Learning task
development. This is an important gap filling intervention for a country with low level of
technical kow-how, when there is poor quality of produce and non-compliance to certain
(HACCP) standards, and when there are un-organized growers with market difficulty.
Generally, GTZ’s approach in value chain promotion in Nepal considered the following
steps: Selection of subsectors, Mapping and analysis of value chains, Development of
intervention strategies, Interventions and implementation of activities, and Monitoring and
evaluation.1

Figure 16: Value Links - GTZ‘s Value Chain Approach

Source: Christian Heneckes (2009).

1
For the details of each step, please read GTZ experience report by Surendra Raj Joshi (2008), on Honey in
Nepal: Approaches, Strategy and Intervention for Subsector Promotion.

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Value chain Analysis Module Analyzing value chain Learning task

3.1.4.2.3 NIMPF approach to value chain

NIMPF approach follows eleven steps in four phases for value chain development (see figure
17).

Figure 17: Phases of NIMPF approach to value chain

As we can see from figure 17, the first step at the diagnosis phase is to decide on the scope of
the value chain, in terms of what level to consider (sector or business to business), what
objectives (transitional or innovation objectives) and which linkages to consider, etc. Then,
as a second step, we carry out stakeholder analysis to identify key actors, their roles, driving
forces, internal and external relations, visions, values, power relations, dependencies, and
effect or role in the project. The third step is to undertake network analysis and identify
possible relationships such as dynamics in the network, transactions, transformations, value
flow or added value, transactions and coordination costs, risks and incentives. The fourth step
in this phase is very important step as it helps us to identify and prioritize bottlenecks and
opportunities in the value chain. We can use a multilevel SWOT analysis; identify incentive
structures, assess infrastructure, socio-cultural, natural, economic and political conditions.
TSRP and Iceberg models can be used here. These processes will lead us to the second
phase.

The second phase is known as device change phase. We follow three steps here. The first is
to invent improvement possibilities to be followed by value and effect analysis of each

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Value chain Analysis Module Analyzing value chain Learning task
improvement activity. Here, we will also identify decoupling points (the points where we can
make changes for improvement). Then, we will develop different scenarios from which we
will select to implement.

What follows after all these processes is to carry through change (phase three) by trying out
as a first step and thereby entering into full implementation. The third step in this phase is
consolidation. Phase four is all about evaluation: process and results evaluation. In most
conventional project evaluations, the focus is on the results/outputs. The value chain
approach gives emphasis to the process (who, how, etc.) equal to that of results.

3.1.4.2.4 The ICEBERG approach to value chain

The Iceberg approach is similar to the NIMPF approach that we discussed above. However,
the Iceberg principle is a model considering not only the visible, subject-logic level, but also
the invisible emotional level. According to the iceberg principle, the subject-logic level
(strategy, structures, processes and functions) amounts to 10% of the overall human capacity,
and the cultural level (relationship processes, social skills, attitude and motivation) to 90%.
This principle is valid for corporate entities, too. The following figure implies that each phase
is dependent on the process and results of its previous phase. For example, inventing
improvements in the second phase is nearly impossible or would be misleading without a
carefull identification of stakeholders, their roles and networks as well as carefull analysis of
bottlenecks and opportunities in the first phase.

Figure 18: The Iceberg approach to value chain

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Value chain Analysis Module Analyzing value chain Learning task
From the four approaches that we have seen above, we can identify four key dimensions of a
value chain: consumer and demand driven; based on collaboration between links; all partners
add vale and share value; and it is a complex network of actors.

3.1.4.3 Learning Activity

Problem based learning tasks

Number Case Description

PBL 1.1 Learners will be given a case to analyze stakeholder roles, constraints and
opportunities in value chain
PBL 1.2 Learners will be given with value chain scenario to compare different value chain
approaches

3.1.4.4 Continuous assessment

Assessment plan for continuous assessment <Approaches to Value Chains>
Performance criteria Category /Method of Relation with competencies
assessment
Analyzing role of Quiz, written exams, To Analyze
stakeholders, constraints & Assignment
opportunities
Comparing different Value Quiz, written exams, To compare
chain approaches Assignment

3.1.4.5. Summary

We have considered four approaches, namely SNV, GTZ, NIMPF and Iceberg approaches to
value chains. There are differences and similarities between the approaches. The SNV
approach focused on sector, B2B development through facilitating knowledge development
and learning and building capacity of service providers. Similarly, GTZ focused on
facilitating critical skill development, organizational development, and upgrading of
knowledge. NIMPF and Iceberg models are similarities, focusing on stakeholder and network
analysis, analysis of bottlenecks and opportunities, identifying improvement possibilities,
implementing and finally evaluating both results and the process. All focused on filling the
gap in knowledge and skills, financial resources and linking producers with consumers in a
way there is a value added in each stage of the value chain.

3.1.5 Section 3: Analyzing chain governance

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Value chain Analysis Module Analyzing value chain Learning task

3.1.5.1 Pre-test
Dear learner, what do you know about value chain governance? Why do you think value
chain governance is important?

3.1.5.2 Section content

3.1.5.2.1 What is value chain governance?

In short, governance refers to the inter-firm relationships and institutional mechanisms
through which non-market coordination of activities in the chain is achieved. Within global
value chains, for example, leading supermarkets in European country may exercise control
over their fresh vegetable supply chains. Not only do they specify the type of products they
wish to buy (including varieties, processing and packaging), but also processes such as the
quality systems that need to be in place. These requirements are enforced through a system of
auditing and inspection and, ultimately, through the decision to keep or discard a supplier.
Clearly, governance in value chains has something to do with the exercise of control along
the chain. At any point in the chain, the production process (in its widest sense, including
quality, logistics design, etc.) is defined by a set of parameters. The four key parameters
which define what is to be done are:
1. What is to be produced? We refer to this as product definition.
2. How it is to be produced. This involves the definition of production processes, which can
include elements such as the technology to be used, quality systems, labour standards and
environmental standards.
3. When it is to be produced.
4. How much is to be produced.

To these four basic parameters one might add a fifth parameter, price. Although prices are
usually treated as a variable determined in the market, it is frequently the case that major
customers (particularly those competing more on price than, for example, product quality)
insist that their suppliers design products and processes in order to meet a particular target
price.. From the point of view of the analysis of inter-firm linkages in the global economy,
the critical parameters for value chain governance are the first two: what is to be produced,
and how it is to be produced. These parameters are often set by buyers. In each case, the
level of detail at which the parameters are specified can vary. In the case of product
definition, the buyer can provide different levels of specification. It can set a design problem
for the producer, which the producer then solves by providing its technology and design. The
buyer might provide a particular design for the producer to work on, or the buyer might even
provide detailed drawings for the producer. Buyers can also specify process parameters. This
has been most evident through buyer involvement in their suppliers’ quality systems, but it is
also increasingly evident in specification of process parameters in relation to labour and
environmental standards. Once again, these can be specified at different levels of detail. In

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Value chain Analysis Module Analyzing value chain Learning task
some cases, the buyer may merely refer to the process standards to be attained. In other
cases, the buyer will specify precisely how particular standards should be attained by
requiring and perhaps helping to introduce particular production processes, monitoring
procedures, etc. When the buyer plays this role, we refer to it as the ‘lead firm’ in the chain.

The question of governance arises when some firms in the chain work according to
parameters set by others. When this happens, governance structures may be required to
transmit information about parameters and enforce compliance.

Product and process parameters can also be set by agents external to the chain. Government
agencies and international organisations regulate product design and manufacture, not only
with a view to consumer safety, but also in order to create transparent markets (for example,
by defining standard weights and sizes or technical norms). Examples of such parameter
setting by agents external to the chain include food safety standards, norms with regard to the
safety of products such as children’s toys, electrical equipment and motor vehicles and
control of hazardous substances in a wide range of products. Once again, these norms can
refer to the product (are its physical characteristics and design in conformance with
requirements?) or to the process (is it being produced in ways which conform to particular
standards?). In some cases, process norms are pursued as a means to achieving product
standards (for example, hygienic food preparation systems are designed to produced safe
food) and in others because of the intrinsic value of particular types of processes (for
example, animal welfare requirements). Governments may set standards which are
compulsory and have legal force. Standards may also be set by non-legal agreements (code
of conduct, etc.) and by a variety of unofficial agencies, such as NGOs, which pressure for
compliance with labour and environmental standards.

Parameters set from outside the chain lead to chain governance when one agent in the chain
enforces the compliance with parameters of other agents or translates the parameter into a set
of requirements which it then monitors and/or enforces. This situation usually arises when
agents at one point in the chain might be held responsible for actions by agents (or the
consequences of these actions) at other points in the chain.

Governance can be exercised in different ways, and different parts of the same chain can be
governed in different ways. Governance, in the sense of arrangements that make possible the
non-market coordination of activities, is not a necessary feature of value chains. Many goods
are traded in markets through a series of arm’s-length market relationships between firms.
The parameters are defined solely by each firm at its point in the chain. So, for example, a
firm might make a product according to its own estimations of market demand (‘make to
forecast’), using a design that has no reference to any particular customer (i.e. either a
completely standard product, or a product developed in-house) and using its own processes.

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Value chain Analysis Module Analyzing value chain Learning task
The buyer then encounters a ready-made and ready-to-buy product. There are various ways
in which inter-firm relationships can differ from this pattern. For example, the decisions
about ‘when’ and ‘how much’ will be made jointly by the producer and the buyer when
production is scheduled according to ‘make-to-order’ rather than ‘make-to-forecast’. This is
typical when products have many possible variants, which renders make-to-forecast
uneconomic.

Generally speaking, we can identify three governance regimes: Open spot market which is
based on price, quality standards and bargaining and negotiation (every batch); partnership
which is based on trust, network agents or family, quality differentiation, contracts,
coordination and co-operation; and fully vertical integrated based on ownership.

3.1.5.2.2 Why does governance matter?

The issue of governance in value chains is important for the following reasons:
a) Provide market access to small growers or producers in developing countries
b) Fast track to acquisition of production capabilities: lead firms transmit best practices
and provide hands-on advice on how to improve layout, production flows and raise
skills.
c) Distribution of gains: Understanding the governance of a chain helps to understand
the distribution of gains along the chain
d) Leverage points for policy initiatives: The fact that some chains are governed by lead
firms from developed countries provides leverage for influencing what happens in
supplier firms in developing countries. This leverage point has been recognised by
government and nongovernmental agencies concerned with raising labour and
environmental standards.
e) Funnel for technical assistance: The central idea is to combine technical assistance
with connectivity. The lead firms of chains become the entry point for reaching out to
a multitude of distant small and medium sized suppliers.

3.1.5.2.3 Why chain governance needed?

Governance by the buyer is costly, requiring asset-specific investments in relationships with
particular suppliers. Such investment also increases the rigidity of supply chains by raising
the costs of switching suppliers. Nevertheless, many instances of parameter setting and
enforcement along the chain are evident.

Buyer specification of product design is most likely to arise when the buyer has a better
understanding of the demands of the market than the supplier. The buyer then interprets the
needs of the market and informs the supplier of what is required. This information may range

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Value chain Analysis Module Analyzing value chain Learning task
from a statement of the ‘design problem’ to be met to detailed specifications of what is to be
produced. The supplier’s limited knowledge of market demands may arise in fast-moving
markets characterised by innovation and product differentiation. This also likely to arise
when developing country suppliers are integrated into global value chains and exposed to the
demands of more sophisticated markets. Suppliers may be confronted with markets that have
different quality requirements and also different and hard to interpret safety standards. In this
situation, the buyer may even have to supply basic information about product design. The
main reason for specification of process parameters along the chain is risk. Buyers specify
and enforce parameters when there are potential losses arising from a failure to meet
commitments (for example, delivering the right product on time) or a failure to ensure that
the product conforms to the necessary standards. These performance risks, relating to factors
such as quality, response time and reliability of delivery, become more important as firms
engage in non-price competition. As the suppliers become more experienced, and as they are
able to demonstrate their reliability to the customer, the latter may begin to indicate the
standards to be met, but leave it to the supplier to work out how to meet them.

3.1.5.2.4 Trends in chain governance

What trends in value chain governance do we anticipate with changing development aspects
in the globalized world?
a) The general increase in chain governance is connected to the big changes in retailing
in the advanced countries. There has been an enormous concentration in retailing, in
many developed countries. Concentration in retailing does not necessarily lead to
concentration in sourcing but the scenario which is emerging is increasingly clear: an
increasing number of developing country producers engage in contract manufacturing
for a decreasing number of global buyers.
b) Brands play an increasingly important role in enterprise strategy, particularly in
consumer products such as garments and footwear. The enormous investment
required to create (or maintain) brands is increasingly made by retailers or other
companies which have no (or only limited) production facilities of their own. Product
and process definition, however, is a strategic part of their operation. Because brands
stand for high quality or well-defined images, they need to define and enforce product
and process parameters. Branding and chain governance thus tend to go together.
Chain governance is not however limited to the sourcing of branded products.
c) Ii has been noted that the risk of supplier failure is a key driver of chain governance.
The risk of suppliers not being able to produce to the required specification is highest
in new producer countries. Over the last two decades, many new producer countries
have been able to export to advanced country markets under the tutelage of the global
buyers. As the competence of these suppliers increases, chain governance through the
buyers can be expected to loosen – provided that the increasing competence of

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Value chain Analysis Module Analyzing value chain Learning task
suppliers is accompanied by the emergence of local agents who can monitor and
enforce the compliance with general or buyer specific standards. Some of the
formerly new producers will become world leaders in producing promptly to the
specification of the foreign buyer.
d) There is however a counter-tendency. While non-price factors (quality, brand, speed)
have come to play an increasing role for competing in global markets, price
competition continues to be unrelenting, leading to a downward pressure on prices,
particularly in labour intensive products sourced from developing countries. The
resulting profit squeeze leads buyers to scout continuously for new producers who
offer lower labour costs.
e) Business-to-Business (B2B) electronic commerce is being promoted world-wide as a
means of enabling developing country producers to sell in advanced country markets
and transform the relationship between producer and buyer. For the producer, one of
the main advantages of ecommerce is thought to lie in side stepping the intermediary
or avoiding control by the buyer. Reality is unlikely to become this simple and the
governance mechanisms those are in use will probably continue to be most relevant
because: (i) B2B e-commerce is diffusing only very slowly in trade between
developing and developed countries; (ii) some of the established buyers are investing
in the application of e-procurement methods; (iii) where existing intermediaries are
circumvented, trade tends to be conducted through new ‘info-mediaries’ (portals);
(iv) all forms of e-procurement are likely to require mechanisms to contain buyer risk,
such a certification. Monitoring and accreditation agencies will be of increasing
importance.
f) On the other hand, there may be a shift to parameter setting and enforcement by
agents outside the chain. The more conformance/compliance with parameters can be
codified, generalised and credibly applied, the less need there is for governance from
within the chain.

3.1.5.3 Learning activities

Problem based learning tasks

Number Case Description

PBL Learners will be given with a case of a global value chain and asked to chain
3.3.1 governance issues in the case
PBL Learners will be given with a real value chain case in Ethiopia and asked to identify
3.3.2 lead firms, non-market coordination activities, and institutional mechanisms

3.1.5.4 Continuous assessment

Assessment plan for continuous assessment <Value Chain Governance>

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Value chain Analysis Module Analyzing value chain Learning task
Performance criteria Category/Method Relation with
of assessment competencies
Identifying types of governance structures and Written exams, To identify/
selecting appropriate interventions and leverage points Assignment To select
Identifying determinants of value chain governance Written exams, To identify
Assignment

3.1.5.5 Summary
The concept of value chain governance is used to refer to the inter-firm relationships and
institutional mechanisms through which non-market coordination of activities in the chain
takes place. This coordination is achieved through the setting and enforcement of product and
process parameters to be met by actors in the chain. In global value chains in which
developing country producers typically operate, buyers play an important role in setting and
enforcing these parameters. They set these parameters because of the (perceived) risk of
producer failure. Product and process parameters are also set by government agencies and
international organisations concerned with quality standards or labour and environmental
standards.

Understanding how a chain is governed allows local firms to strategically target the
activities and relationships that will provide them with the most benefits. When conducting
value chain analysis, one must first identify the type of governance structures that exist, and
then select appropriate interventions and leverage points for policy initiatives.

There are five generic ways that firms coordinate, or ‘govern’ the linkages between value
chain activities: 1) simple market linkages, governed by price; 2) modular linkages, where
complex information regarding the transaction is codified and often digitized before being
passed to highly competent suppliers; 3) relational linkages, where tacit information is
exchanged between buyers and highly competent suppliers; 4) captive linkages, where less
competent suppliers are provided with detailed instructions; and 5) linkages within the same
firm, governed by management hierarchy. These linkage patterns could be associated with
predictable combinations of three distinct variables: the complexity of information the
production of a good or service entails (design and process); the ability to codify or
systematize the transfer of knowledge along the chain; and the capabilities of existing
suppliers to produce efficiently and reliably, for which the dynamic nature of governance can
be largely accounted.

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Value chain Analysis Module Analyzing value chain Learning task

3.1.5.6 Proof of Ability

At the end of the learning task, the students will be assessed through summative exam.
Whenever possible, it can also be complemented with practical attachments.

Product: the student has Criteria Score

Explained concepts of value Explanation of basic concepts of value chin 15
chain (Written exam)
Been able to compare basic Use of points for the comparison of value chain 5
approaches to value chain approaches (Rubrics, written exam)
analysed chain systems and Application of chain analysis steps and 15
strategies approaches and design strategies for chain
improvement (Portfolio, written exam)
advised on chain Demonstration of chain governance (portfolio, 5
governance written exam)

References

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Fathi Elloumi, 2001. Value chain analysis: a strategic approach to online learning. Athabasca
University.

John Humphrey and Hubert Schmitz (2001). Governance in Global Value Chains. Institute of
Development Studies, IDS Bulletin 32.3, 2001.

John Humphrey, (2005). Shaping Value Chains for Development: Global Value Chains in
Agribusiness. German Technical Cooperation (GTZ), Eschborn. Micro report number167,
USAID, ACDI/VOCA.
Olaf Van Kooten, 2011. Value chain Management in Horticulture Lecture Note.
Paul van Hal, and Gert Jan Hofstede, 2004. Netchain IMProvement Framework:
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RTRS International Technical Group (ITG), 2010. RTRS Standard for Responsible Soy
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Ruerd Ruben, Aad van Tilburg, Jacques Trienekens and Martinus van Bokel (2009?? ).
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Value chain Analysis Module Analyzing value chain Learning task

Ruth Cambell, (2010). Implementation Best Practices for Value Chain Development
Projects.
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SNV, (2010). Private Sector Development in Ethiopia: SNV takes up the challenge in the
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SNV, (2011). SNV’s value chain development approach. The Netherlands Development
Organization (SNV): http://www.business-ethiopia.com.

Surendra Raj Joshi, (2008). Honey in Nepal: Approach, Strategy, and Intervention for
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Timothy J. Sturgeon (2008). From Commodity Chains to Value Chains: Interdisciplinary

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Jongen & M.T.G. Meulenberg, Wageningen Academic publishers, Wageningen,

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