3.3.4. Developing an Industry Competitiveness Strategy: Tools and Examples

Once development professionals have selected and analyzed an industry that has high levels of MSE participation, 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.

Tools

  • A sound value chain analysis provides the basis for developing and sustaining an industry competitiveness strategy.
  • A hybrid approach that involves secondary research of industry, government and (if relevant) donor reports and key informant interviews with end-market buyers, investors (real, potential), NGOs and donors can help determine an industry’s competitiveness potential.
  • The Strengths, Weaknesses, Opportunities, Threats (SWOT) and constraints analyses bring those with common and competing interests together to help them agree on opportunities and constraints in order to realize a common goal.
  • Appreciative inquiry and similar tools are based on the premise that a more effective vision can be established if it is grounded in what is currently working.
  • Spider diagrams provide information on how an industry compares to its closest competitors according to end-market buyers, which helps designers and industry participants develop an upgrading plan.
  • Participatory facilitation techniques in workshop settings provide industry players—those responsible for critical value chain functions, service provision, and the legal regulatory and policy environment—an opportunity to share information, discuss findings and become actively involved in identifying and evaluating the industry’s competitiveness potential. The use of participatory techniques is critically important for building ownership of the strategy and buy-in to proposed activities.
  • Facilitating horizontal linkages can provide access to finance, training, technical assistance and market information—all of which are essential for competitiveness.
  • Promoting vertical linkages can connect producers with input suppliers, end-market buyers, and other actors who are able to provide market and technical information and a range of embedded services that enable MSEs to upgrade.

Examples

The assessment of nature-oriented tourism in Ecuador brought private and public stakeholders together to develop a competitiveness strategy for the industry that included national branding to promote Ecuador as the leader in sustainable tourism. [1] The project worked with local businesses to define the image, plan the elements, and establish the standards and alliances needed to promote and benefit from their destinations, and with national-level actors to engage the destination communities in an iterative process that involved collaboration and the flow of information between all parties to provide the destinations with access to markets, information and services and to give the national players the local information they needed to develop the services and policies that would make Ecuador the world leader in sustainable tourism.

In another example, project designers analyzing the sector selection process in Kosovo found that it needed to be adapted to address conflict factors such as restoring the food supply, replenishing agricultural inputs, and helping farmers, entrepreneurs, and enterprises rebuild their operations and reconnect to other value chain participants. The team recognized that the potential to be competitive is not a valid criterion when selecting sectors or enterprises in conflict situations as it is difficult to judge which will survive, respond to technical assistance, and be able to access resources for growth. The subsequent analysis of the dairy industry chain found that rebuilding and competitiveness are not complementary objectives for initial programs in post-conflict environments and, in the immediate post-conflict period, decisions should be made quickly and resources directed toward beneficiaries as soon as possible in order to rebuild and create incentives for non-violence.[2]

Footnotes

  1. ↑ Fries, Robert; Correa, Marcela; Pool, Douglas; Rodriquez, Arnaldo (2006). Nature-Oriented Tourism in Ecuador: An Assessment Applying the Value Chain and Nature, Wealth and Power Frameworks. Washington, D.C.:ACDI/VOCA, CARANA Corporation, International Resources Group, and Green-Consulting.
  2. ↑ Grygiel, Julie (2007). Kosovo Dairy Value Chain Case Study. Washington, D.C.: Chemonics