3.4.5. Plan for Scaling Up
Moving Beyond Replication
A typical project sees scaling up as a process of replication of an activity. For example, scaling up a farmer training activity means training more farmers. Scaling up a competitiveness project often means making more transactions happen regardless of the way in which the sales are conducted. A value chain facilitation approach looks at scaling up in a different way. It refers to greater depth and breadth of behaviors that are critical to achieving sustainable competitiveness.
Depth
Depth refers to greater ownership of behaviors that lead to improved competitiveness. At the early stages of a project, typically only one or a few firms take on the desired behaviors and it is the role of the project to foster a belief within the firm that these behaviors are critical to their success. Systemically, a project will work to deepen the following:
- supportive commercial relationships
- innovation-based competition
- benefits that support and drive more effective relationships and innovation
- improvements in key end market factors – product, operations and branding
Breadth
Breadth is achieved through a combination of i) large numbers of firms taking on a behavior, ii) increases in the range of support markets targeting the core value chain and iii) shifts in enabling environment incentives that align industry interests. The primary way to achieve breadth is by shifting from a situation in which a few firms believe in a certain behavior to one in which those behaviors become the norm for a competitive industry. As these behaviors become norms there are typically a whole set of supporting behaviors that also have to be addressed to solidify the initial behaviors as norms and achieve sustainable competitiveness. For example, as the agricultural input industry shifts to targeting smallholders there may be a range of issues to address besides the basic distribution structure needed for initial sales, including shifts in internal management performance standards, controls, forecasting, customer service, etc.
The process by which a behavior becomes a norm can be difficult to assess, but often a clear indication that this shift has occurred is when firms begin sanctioning other firms for not taking on such a behavior, for example:
- refusing to work with firms that “play dirty” through price fixing, fraud or misinformation.
- sanctioning firms that compete unfairly (i.e., misrepresented quality, price-only tactics, etc.) through open criticism or even legal action
- communicating the bad reputation of firms that engage in non-transparent pricing or force predatory terms--through direct criticism or indirectly by avoiding them or not allowing them to participate at industry functions
Breadth is also increased when a range of support markets view the core industry as an important client base, resulting in dedicated marketing of specialized products and services. The process generally necessitates fostering support markets to become competitive in their own right.
Achieving breadth also requires a shift in the way enabling environments (global, national, formal and informal) become more supportive of the behaviors (i.e., supportive commercial relationships, innovate to compete, and benefit flows that support effective relationships and ongoing upgrading) required to increase competitiveness.
The Need for Effective Knowledge Management
Knowledge management systems are critically important during the scale-up phase, as identifying if depth of ownership and breadth of shifting industry norms are increasing is not an easy process. Furthermore, much of this information has to be timely so as to inform implementation decision.