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Building territorial
value chain
International Link and Services for Local Economic Development Agencies
for a fair, human, sustainable and inclusive development
2010
ILS LEDA Tool Kit n° 09
BUILDING TERRITORIAL VALUE CHAINS
ART GOLD LEBANON PROGRAM
The territorial endogenous potential is the ensemble of
different resources, potentially exploitable in order to build a
sustainable, durable and competitive development
ENDOGENOUS POTENTIAL
A territorial value chain is a chain of activities aimed at producing and sell certain products (i.e. derived by milk or fruit or linked to textile industry) or services (i.e. linked to tourism or education or health). Activities or products pass through all components of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. The value chain categorizes the generic adding value activities , that are: • The "core activities" include: inbound logistic, operations (production),
outbound logistic, marketing and sales (demand), and services (maintenance).
• The "support activities" include: administrative management, human resource management, technology (R&D),procurement, etc.
The territorial chains of value
v
Fruit andvegetables Marketing
Advertizing
Maintenance
Graphicdesigning
LabelRaw materialprocessing
Advice
Transportation
Packaging
ComputerSoftware
Mechanization
Maintenance
Information
Storage
Tools and spareparts
Production
Agro-industry
Tools and spareparts
Production
Maintenance
Glass or tinindustry
Ice-Industry
CHAIN OF VALUE FOR FRIUT AND VEGATABLEPRODUCTS
Cultural Events based on F&V
Specialised Services
Procurement
Waste Recycle
Energy
Quality Control
Research
Training
FINANCE
Restaurants, coffee bars. etc.
Accomodation
Training Equipments and
Tools
Cleaning
Information
Computer software
Maintainance
Arts & Crafts Inputs
Business Services
Equipment
Packing
Marketing
Advertising Laundries
Arte gráfica Imprentas
Transportation
Agriculture inputs
FIG 2b: LA CADENA DEL VALOR TURISTICA
Maintainance
Capacity Builiding
Design Quality Control
Quallity Contr
Cultural-Artistic-Sport Events
OrganisationServices
Computer software
Graphic Arts Printing
Arts & Crafts
Guiding
Security
Communicationes
Travel Agencies
Financial Services
Renting
Infrastr. Management.
TOURISM VALUE CHAIN
BUILDING, HOUSING
INDUSTRY, AND PUBLIC WORKS
HOUSE PRODUCTS
FURNITURES
WOOD INDUSTRY
CURTAINS
FRAMES
EQUIPMENT
GLASSES STOVES
SANITARIES
BAKED CLAY
FLOORS
ELECTRIC SYSEMS HYDRAULIC SYSTEMS
EQUIPMENT
MAINTENANCE
BRICKS KILNS
BITUMEN LIMES
EQUIPMENT
ROAD MAINTENANCE
EQUIPMENT
MAINTENANCE
FINANCE BUSINESS ASSISTANCE TRAINING INNOVATION
FIRST STEP Identifying the “holes”
SECOND STEP Elaborate a chain strategy, for responding to the needs of a complete value chain,
infrastructure, and service
THIRD STEP Set up the value chain governance mechanism
BUILDING VALUE CHAINS
FIRST STEP Identifying the “holes”
Value Chain Businesses Assessment Constrains to the full chain opera5ons Ac5ons
1. Exist, and good
2. Exist, but weak
3. Not exist
1. Exist, and good
2. Exist, but weak
3. Not exist
1. Exist, and good
2. Exist, but weak
3. Not exist
1. Exist, and good
2. Exist, but weak
3. Not exist
1. Exist, and good
2. Exist, but weak
3. Not exist
HOW? Starting from the major actors of the value chain, and adding information, through the other ones
FIRST STEP Typology of the constrains
Constrain typology Prioritization Scores DESCRIPTION
Ind. 1 Ind 2 Ind 3 Ind 4 Total
Infrstructure
Information
Production Services Finance
Individualism
Entrepreneurship
Comercialization
Technological Capital
Legal Framework
Total Average PRIORITISE THE SCORES ABOVE THE AVERAGE
SECOND STEP Elaborate a chain strategy, for responding to the needs of a complete value chain,
infrastructure, and service
Strategic Areas
Finalisation of the productive value chain
• Sensitization and Stimulation • Technical Assistance • Credit • Training
Quality and food security strategis
• Realisation of laboratories • Quality Label • Training
Actions
Innovation Strategies • Reinforcing the research and the laboratories • Create innovation territorial systems • Realise concourses for the best innovations
Marketing Strategies • Brands • Creation of an unique value chain sale structure • Improve the logistic (transportation and outlets)
THIRD STEP Set up the value chain governance mechanism
Its task is to implement the collective actions of the value chain: • common marketing • common procurement • lobbying with the local and national authorities • gathering funds for the common interest initiatives (quality, innovation, trainig centers, etc.)
The mechanism generally is a CONSORTIUM or an ASSOCIATION, participated by the entrepreneurs and the other institutions related to the value chain (universities, training centers, service entities, Ledas).
It can be started by the LEDA