Introduction to value chain analysis


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Presented by Getachew Legese at the Africa-RISING Quick Feed Project Inception Workshop, Addis Ababa, 7-8 May 2012

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Introduction to value chain analysis

  1. 1. Introduction to value chain analysis Getachew LegeseAfrica-RISING Quick Feed Project Inception Workshop, Addis Ababa, 7-8 May 2012
  2. 2. What is a Value Chain• Value chains encompass the full range of activities and services required to bring a product or service from its conception to sale in its final markets.• VC includes input suppliers, producers, processors and buyers.• They are supported by a range of technical, business and financial service providers
  3. 3. The Value Chain and Business support services Consumption Retailing Trading Processing Research Transportation Trading Govt. policy regulation Transport Communications Post-harvest handling Production input supply Production Tech. & business training & assistance Financial services Input Suply Market information and intelligence
  4. 4. How to conduct a VCAValue chain analysis consists of a four stepprocess: 1. Data collection, 2. Chain mapping, 3. Analysis of opportunities and constraints, and 4. Validating the findings of the VCA through stakeholders forum
  5. 5. Data collection• Both qualitative and quantitative data are required for the VCA.• The qualitative data are collected using PRA tools such as: Key Informant interview, focused group discussions, personal observations, etc• Quantitative data are collected using structured questionnaire survey
  6. 6. Value Chain mapping• Value chain mapping is the process of developing a visual depiction of the basic structure of the value chain• The first step in VC analysis• It serves both analytical and communication• It reduces complexity of economic reality• It encompasses – Function – Stakeholders – Interdependencies – Relationship
  7. 7. Analysis of Opportunities and Constraints Using the Value Chain Framework• The collected data is analyzed using the value chain framework to reveal constraints within the chain that limit the exploitation of end market opportunities• The value chain framework comprises – the structure and – dynamics of the value chain.
  8. 8. Structure of the Value Chain• The structure of a value chain includes all the firms in the chain and can be characterized in terms of the following five elements i. end markets ii. business enabling environment iii. vertical linkages iv. horizontal linkages v. supporting markets
  9. 9. VC actors Enablers SupportersSmall Tradersfarmers Union companies Operators
  10. 10. Dynamics of VC• The dynamics of the VC refers to the determinants of individual and firm behavior and their effect on the functioning of the chain• The dynamic of VC can be characterized in terms of the following three elements i. value chain governance ii. inter-firm relationships iii. Upgrading• Validating the findings of the value chain through stakeholders forum
  11. 11. Thank You!