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Value Chain Analysis

WS 2004/2005

Ing. Carlos Torres

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Termine

• 12. Januar: Mapping Value Chains. Das Beispiel der Lachs-Industrie in Chile

• 19. Januar: Verwendung von Konzepten zur Fallstudien

• 26. Januar: Gruppen Präsentationen

• 02. Februar: Wertschöpfungskette-Analyse als analytische Instrument

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Index 12. Januar

• Industry Structure

• Importance of value chain analysis

• Theory

• Mapping value chains

• Case Study: Salmon Industry (Chile)

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Industry Structure

• Economic sectors and branches• Return to scale• Factor Markets: Land, Labour, Capital• Market forces (Porter 5)• Location (geographical boundaries)• Innovation• Industrial agglomeration / Clusters

– external economies– economies of scope

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Importance of VC analysis

Definition:

“Value chain describes the full range of activities which are required to bring a product or service from conception, through the intermediary of production, delivery to final consumers, and final disposal after use” (Kaplinsky, 2000).

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Importance of VC analysis

• Dynamics of rent (intersectoral)• Rent-rich activities• Cross-border• Determinants of firm-size distribution• Division of labour and competive advantages• Joined-up policies• (Firm strategy)

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Source: Ramos 1999

Importance of VC analysis

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Theory

Value SystemPorter

Value SystemPorter

GCC: GereffiINEFIDS

GCC: GereffiINEFIDS

Linkages(Hirschman)

Linkages(Hirschman)

Value ChainAnalysis

Value ChainAnalysis

MIT

Danish School

Italian School (industrialle districts)

Filière (French)

Global production network (Ernst, Handerson)

ManagementManagement

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Theory: Porter

Source: Porter, 1990

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Theory: Porter

Source: Porter, 1990

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Theory: Porter

Source: Porter, 1990

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Theory

• GCC: (Gereffi)

– Buyer / Producer driven chains• Input-Output structure => tangibles / intangibles• Territoriality• Governance (Handerson corporate power)• Institutions

– Apparel Industry• Systemic competitiveness (INEF: Mayer-Stamer, Eßer, Messner)

– Levels:• Micro• Macro• Meta• Meso

• IDS: (Kaplinsky, Schmitz, Humphrey)

– Upgrading– Barriers to entry and rents– Case studies

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Theory

Source: Nadvi/Schmitz 1994

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Mapping Value Chains

• Area of research interest:– the global distribution of income– retailers– independent buyers– key producers– sub-suppliers– commodity producers– agricultural producers– small farms and firms– informal economy producers and traders– women, children and other marginalised and exploited

groups

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Mapping Value Chains

• Identities– gross output values– net output values (that is, gross output, minus input costs)– the physical flow of commodities along the chain– the flow of services, consultants and skills along the chain– employment, where relevant distinguishing between

permanent (on payroll) and temporary (off payroll) staff, gender, ethnicity

– destination of sales - for example to wholesalers and retailers; concentration of sales amongst major buyers; number of buyers

– imports and exports, and to which region

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Mapping Value Chains

Source: Kaplinsky, 2000

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Mapping Value Chains

• Mainstream Industry: more than one value chain• Core activities (barriers to entry and rent)• Industrial linkages – market structure

– Consumer (re-processing)– Suppliers– Horizontal linkages– Supporting Industries

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Mapping Value Chains

• Location– Indivisible stages– Institutions (Meso-level)– Macro-level– Meta-level

• Buyer / Producer driven• Lead firm (+ and -)• Market Forces / Governance• Dynamic structure• Upgrading opportunities

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Case Study: Salmon Industry