3.3. Competitiveness Strategy

Introduction

A competitiveness strategy is a plan for moving the industry toward sustained growth. It represents a vision for how firms might collaborate to achieve growth, rather than seeing one another simply as competitors. When designing a competitiveness strategy, practitioners need to involve stakeholders at all levels of a value chain in developing 1) an end-market competitiveness plan that determines the industry’s competitive advantage, 2) a commercial upgrading plan, and 3) a plan for sustaining competitiveness. These elements rely on both information from the value chain analysis and active involvement by the private sector to create a focused approach to improving and sustaining industry competitiveness.

Developing an Industry Competitiveness Strategy: Tools and Examples
Once development professionals have selected and analyzed an industry, there is a broad range of tools available for them to use in developing a value chain competitiveness strategy. These tools help practitioners, stakeholders and strategy developers identify the industry’s competitive advantage, develop a commercial upgrading strategy to make it more competitive and create a process to sustain its competitiveness. See a list of tools and project examples.

Recommended Good Practices and Lessons from the Field

• Buy-in by stakeholders throughout the chain is critical—a lack of ownership can sabotage the best of intentions and strategies.
• Follow-up support by development partners, lead firms, government and/or others (e.g., local NGOs, trade associations, etc.) is critical to sustain momentum.
• Look to the end market for the appropriate international standards—HACCP, ISO 9000, etc.—to be included in microenterprise development program designs.
• Use the adoption of product standards to build partnerships between producers, buyers and input suppliers.
• Engage buyers and input suppliers in providing producers with embedded services to help them reduce the time and costs of upgrading.
• Improve communications among MSEs to foster the adoption of new technologies and improved production processes by example.
• Intermediary agents / traders can play a vital role in identifying and establishing relations with international buyers and in managing logistics.
• Readily available, consistent access to supplies, finance and affordable services for product development and to information on the requirements of the market can promote growth at many levels of a value chain.
• A secure political environment encourages legitimate business, competitiveness and regional and international trade.
• Export market buyer interest is closely tied to the ability of producers to meet three important requirements: quality, quantity and reliability.
• If there is not enough inter-firm cooperation to develop a common vision, a focus on short-term results around quick win-win activities can create positive reinforcement for collaboration.
• It is critically important that industry leaders be able to anticipate and respond to changing market conditions quickly, efficiently and effectively.

Sources

• Competitive Strategy: Techniques for Analyzing Industries and Competitors, Porter, Michael; The Free Press; 1989.
• Learning from Global Buyers, Schmitz, Hubert; Peter Knorringa, IDS Working Paper #100; 1999.
• Conversations, Steen, Cynthia, COP, EDEM Project.