vc analysis
Post on 18-Dec-2014
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.
value-addingactivities
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
Value-Chain=Operational FrameworkValue-Chain=Operational FrameworkValue-Chain=Operational FrameworkValue-Chain=Operational Framework
FarmerFarmerss
FarmerFarmerss
Industry Industry AssociationAssociationIndustry Industry
AssociationAssociation
TradesTradesTradesTrades
TradesTradesTradesTrades
TradesTradesTradesTrades
SellsSellsSellsSells
“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
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?
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?
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?
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?
The use of chain analysis
The basic Value Chain map – Economic Analysis
Trade Final SaleSpecificInputs
Production Trans-formation
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)
RetailTrade
SpecificInputproviders
Farmers,(primaryproducers)
Packers,Agro-industry
Whole-salers
Price received
Trade Final SaleSpecificInputs
Production Trans-formation
The basic Value Chain map – Economic Analysis
4 Php 6 Php
RetailTrade
SpecificInputproviders
Farmers,(primaryproducers)
Packers,Agro-industry
Whole-salers
Value added
Share of Value
16 Php 9 Php 15 Php
8% 12% 32% 18% 30%
The upgrading goal builds … on market opportunities or … on a new business idea
Creating a Goal for the Industry
Goal : based on opportunities
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
Providers ofspecific inputs
Primaryproducers
TradersRetailers
Finalconsumers
Logisticcentres,Industry
A fundamental goal for upgrading
Specificinputs Production Processing Trade
Volume Price
Income
** increased value addition in all processes of the Value Chain
**The focus may be on volume, on prices or on both
Current Products New Products
Current Markets
New Markets
Market PenetrationStrategy
Product Development Strategy
Market DevelopmentStrategy
Diversification Strategy
product / market matrix
Classifying strategies
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
Identifying opportunities
… proven technologies
… strong business organization(s)
… enterprises willing to invest
… labour force for quality improvement and/or processing
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?
Opportunities and ConstraintsOpportunities Stages/Functions Constraints
Consumption
Trading
Transformation
Production
Inputs
.
.
ConstraintsOpportunities Functions
Inputs
Production
Marketing
FinalConsumers
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
Raffia Sub sector
Lack of market focus
.
.
Constraints and StrategiesObjective: 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
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.
Conduct RM treatment trainings
4th Qtr 2011DTI, 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. APFTI2nd Qtr 2011
STRATEGIES ACTIVITIES RESPONSIBLE AGENCY TIMELINE
Develop comprehensive product development program (designs, technology, skills)
4th Qtr 2011
Action Plan
Productdevelopment DTI, APFTI
Maraming Salamat Po!
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