SECTION 8: Competitive Directions
SECTION 8: Competitive Directions
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A. Competitiveness Directions
A. Competitiveness Directions
Revisit the Value Chain Map and identify all constraints, including gender-related and climate constraints, that are relevant in formulating vision statement and strategies.
Identify the competitive advantage as well as the strength and opportunities of the commodity/product form under study. The competitiveness criteria should focus on: Efficiency, Product Differentiation, and Taking Advantage of New Markets.
Formulate the competitiveness vision based from the identified competitive advantage, strength and opportunities. It must be bounded by a 3-year time frame and should be realistic.
Consolidate the results of the previous analyses on the commodity planning environment, and of value chain players and activities to use as basis in formulating competitiveness strategies and to identify priority interventions including major agri-fishery investments in response to constraints and opportunities in the value chain.
The Competitiveness strategy represents a vision for how VC actors might collaborate to achieve growth rather than seeing one another simply as competitors. Draft the competitiveness strategy by answering the following questions:
6. The crafting of upgrading strategies and specific interventions will follow to achieve the competitiveness vision of a certain industry/commodity and of specific segments of the value chain in particular.
7. In formulating the upgrading strategies, it is important to bear in mind the following principles:
● Build on the market and development potential - a growing market provides the farmer opportunies for increased production.
● Identify the actions needed to implement strategies and achieve targets
● Stick to clear division of tasks between private and public actors contributing to chain development
8. The term upgrading denotes the development path of a value chain. In formulating chain upgrading, any or all of the following trajectories should be considered:
a. Process Upgrading - use improved inputs and appropriate technologies such that these become better than competitors, this is the improvement of production and distribution technology and logistics, (e.g. cowpea storage in plastic bags for longer shelf life, use of high-yielding varieties, improved sorting, grading and packaging of agricultural products).
b. Product Upgrading - comply with quality standards and follow recommended production and postharvest handling practices to improve product quality. This is the innovation (new product), diversification or improvement (old product) of the final product (e.g. coffee growers upgrading their products to meet specifications such as international organic and fair trade certifications)
c. Functional Upgrading - change the mix of segments in the value chain and/or change the locus of activities to new links within the chain to increase value added (e.g., on-farm seedling production, instead of buying from nursery)
d. Channel Upgrading - operate in a new market channel within the same value chain (e.g., from mango production to cashew production - same segment but different commodity)
e. Inter-sectoral Upgrading - enter into a completely new or different value chain using newly acquired knowledge. Intersectoral upgrading is especially notable as it facilitates a firm’s acquisition of more skill, knowledge, or technology specific to the new product (e.g., copra producers aquire knowledge, skills, and facilities to produce coco nets from coco coir)
9. Present and validate the initial draft of competitiveness direction and the propose strategies in the industry.
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