Objective: This blog elaborates on the value chain concepts proposed by Gereffi on the following specific theme: recommendations on improving your business competitiveness.
Marketing is an important activity embedded within the value chain as it provides support to the final consumer. An efficient and effective value chain improves a company’s overall competitiveness as it requires the inclusion of resourceful and productive value-adding activities.
For small and medium-sized businesses, an imperative requirement for growth depends on the level of competence applied to the value chain. Whether your value chain is local or international – the purpose of your business should define your value chain; therefore, your business activities should align with your value chain. An efficient and effective value chain for any business generates successful financial returns. Therefore, if you are experiencing stagnant growth within your firm, I would suggest that you take some time to evaluate your value chain against your business activities and purpose. In doing so, ask yourself these three questions:
Am I exploiting the market?
Do I have the people and business collaborations best suited for my business purpose and success?
And, is this value chain worth the investment?
1. Are you exploiting the market?
Let me begin by emphasizing that “Knowledge is power – and to know is to research.” Small businesses tend to neglect research or research-related activities. However, research is KEY – the life of your business depends on research. Whether you are a small or large business, research is important in gaining access to markets and sustaining your current market position. For this reason, perform periodic product/service research and industry research. Research your current marketplace, keep up to date with the changes within the marketplace and regularly examine the movement inside the value chain.
2. Evaluate the skills and competence of the people, relationships, and associations within the value chain
Are the people within your value chain skilled, competent, and equipped to supply the requirements for your business and efficiently and effectively meet your consumer demands? This is the question you need to ask, as the wrong people within your value chain can hinder your marketing and overall business success.
In order to successfully compete in the marketplace, small and medium-sized businesses' requirement is to increase production and lower costs. For this reason, it is important to build and sustain business relationships and associations that command a certain structure of composition in a constant manner to attain increased production and lower costs. Choose the right partnerships in building your value chains from the start. Think along the lines of costs, supply capabilities, innovation, competition, and sustainability. Carefully match your partnerships with your business purpose and align them with your value chain activities.
3. Is this a “smart investment”
Now let’s talk capital or finance. Building a resourceful and successful value chain involves specified investments. Market failures of many small-scale businesses are due to the unavailability of finance or marginal business capital for investments. Nonetheless, it is still very critical to exploit the opportunities existing in the value chain as it is beneficial for business growth. That is why “smart investment” is needed. What do I mean by “smart investment”?
Smart investments come from the market research analysis mentioned in point one and the partnership selections mentioned in point two. By knowing how to access your market and by establishing competent and valuable business associations, you are then able to make a better decision or a smart decision on your value chain investment.
All things considered, implementing the results of the stated recommendations in creating high value-added activities along the value chain. Although there are numerous value-adding opportunities within a specific sector, these generic recommendations benefit all sectors.
Remember, your value chain should add VALUE to your business and to your customers.
Reference List:
Gereffi, G., & Fernandez-Stark, K. (2016). Global Value Chain Analysis: A Primer: The Duke Center on Globalization, Governance & Competitiveness.