Vc analysis
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The document discusses value chain analysis. It defines value chain as the sequence of processes from inputs to consumption. Value chain analysis reveals value added at each stage and constraints/opportunities. It helps actors understand their roles and identify opportunities to add value. The analysis informs strategies to increase competitiveness and value addition across the chain.
Vc analysis
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- 2. Value-Chain=Operational Framework value-adding activities market consolidators DISTRIBUTORS BDS (NGOs) Capacity bldg for technology, organizational & enterprise devt FIs/CPs Financing for trading, equipment, working capital ENSURE EQUITABLE DISTRIBUTION OF INDUSTRY/ENTERPRISE GAINS & BENEFITS CONSUMERS NGAs, LGUs, Academe, NGOs, Donors, Private Sector Policy support; Information; Technology; Communication Farmers Industry Association Trades Trades Trades Sells “ Value chain” means…. - the sequence of productive processes (functions) from the provision of specific inputs for a particular product to primary production, transformation, marketing and up to final consumption
- 3. The competitiveness of a value chain (i.e. its ability to conquer (distant) markets, depends to a large extent on the interplay of all chain operators and their performance.) As the saying goes: “ A chain is as strong as its weakest link “. Why do Value Chain Analysis?
- 4. Reveals the value added at each chain function, the performance of the whole value chain, as well as the constraints and the opportunities to add / capture value. Why do Value Chain Analysis?
- 5. The economic analysis of the value chain needs to be informed by empirical data on the VC functions, the respective operators and the final market. Why do Value Chain Analysis?
- 6. VC Analysis helps the actors in a value chain to understand their role for the functioning of the whole chain, as well as to identify business opportunities to add value to the final product. Why do Value Chain Analysis?
- 7. The use of chain analysi s
- 8. The basic Value Chain map – Economic Analysis Seedlings (2 Php each) Fertilizer (20 Php/kg) Pesticide (37Php) Small holders (10 Php / fruit) Large Plantations (12 Php / fruit) Pineapple processing (32 Php / liter) Wholesaler 38 Php / liter) Small Retail outlets (50 Php / bottle) Grocery stores (49 Php / bottle) Price received Trade Final Sale Specific Inputs Production Trans- formation Retail Trade Specific Input providers Farmers , (primary producers) Packers, Agro- industry Whole- salers
- 9. The basic Value Chain map – Economic Analysis 4 Php 6 Php Value added Share of Value 16 Php 9 Php 15 Php 8% 12% 32% 18% 30% Trade Final Sale Specific Inputs Production Trans- formation Retail Trade Specific Input providers Farmers , (primary producers) Packers, Agro- industry Whole- salers
- 10. The upgrading goal builds … on market opportunities or … on a new business idea Creating a Goal for the Industry Goal : based on opportunities
- 11. Creating Strategies for the Industry Strategy : based on the analysis of constraints The strategy builds on the analysis of the constraints that are impeding the realization of the vision
- 12. A fundamental goal for upgrading ** increased value addition in all processes of the Value Chain **The focus may be on volume, on prices or on both Providers of specific inputs Primary producers Traders Retailers Final consumers Logistic centres, Industry Specific inputs Production Processing Trade Volume Price Income
- 13. product / market matrix Classifying strategies Current Products New Products Current Markets New Markets Market Penetration Strategy Product Development Strategy Market Development Strategy Diversification Strategy
- 14. Identifying opportunities Unique, high quality product Low cost of production … the competitive advantage of the value chain Proximity to market … market situation Supply gaps at local market covered by expensive imported products
- 15. Identifying opportunities … proven technologies … strong business organization(s) … enterprises willing to invest … labour force for quality improvement and/or processing
- 16. Identifying constraints 1. What are the reasons for a VC to stagnate? 2. Which gaps exist between the requirements of a VC derived from market demand and its current structure and performance? 3. Which constraints reduce the competitiveness of the producers and prevent their integration into a VC?
- 17. Opportunities and Constraints Opportunities Stages/Functions Constraints Consumption Trading Transformation Production Inputs
- 18. . . Raffia Sub sector Lack of market focus Constraints Opportunities Functions Inputs Production Marketing Final Consumers Worldwide trend on the use of green products Need to improve skills / designs Lack of local consolidators & local exporters Lack of Market information Strong support of government Opportunity to participate in trade fairs High Demand (Local Buyers & Exporters) Availability of Gov’t Programs Availability of skilled workers Abundant Supply of Raw Materials Lack of database on sources Poor Quality of materials Lack of formal organization of suppliers/ producers
- 19. . . Constraints and Strategies Objective: To increase goat population through the introduction of upgraded stocks by 2013 Constraints Strategies Final consumers lack appreciation of goat meat Market Development/Product advocacy and promotion Organized coops not yet capable to handle trading Organizational Development- organize /strengthen cooperatives Insufficient supply of upgraded stocks Supply development of upgraded stocks Lack of capital/access to credit Networking/linkage with banks/financial institutions
- 20. VISION: By 2013, So. Cot. shall be an established supplier of world-class and eco-friendly fashion accessories to Cebu/Manila-based exporters and fashion accessories components to Cebu/Manila-based exporters. Action Plan Product development DTI, APFTI Conduct RM treatment trainings 4 th Qtr 2011 DTI, DOST,LGU LGU, DTI, private sector Improvement of raw material quality and supply Lobby for legislative support re gathering of RM Conduct market analysis (European) thru tie-ups with EU chambers, other chambers and JETRO Market development EO June 2011 DTI. APFTI 2 nd Qtr 2011 STRATEGIES ACTIVITIES RESPONSIBLE AGENCY TIMELINE Develop comprehensive product development program (designs, technology, skills) 4 th Qtr 2011
Editor's Notes
- #3: The interventions of PRIME ran along the value chain of the priority industries. This value chain has merged into the operational framework of PRIME and is aptly reflected in the diagram presented below. At the bottom of the value chain are the individual farmers producing the commodity. These farmers are organized into the RECs, each of which is engaged in the primary value-adding activities, such as milling and processing. The produce are then aggregated at the Local Market Consolidation (LMC) level for common marketing and added leverage in dealing with the distributors at the higher level of the chain. The distributors take care of product availability to the institutional markets and the ultimate consumers.