Guiding Principles
From microLINKS Wiki
Guiding principles are compass checks that help determine if our analysis will lead us to our objectives. USAID AMAP’s approach to value chain analysis emphasizes a market system perspective with economic growth and poverty reduction in mind, a focus on end markets and the recognition of the importance of relationships among and between the firms and individuals with an explicit focus on the benefits to MSEs.
Industries and market systems are dynamic. Value chain analysis recognizes that industries are not static but have trends. A good chain analysis helps us understand the dynamics of the industry, where it is currently and what underlying trends are at work to modify it.
Industries have multiple sized players. The value chain analysis must show how micro and small firms contribute to and benefit from the chain’s competitiveness strategy.
Use of qualitative and quantitative data. The collection of both quantitative and qualitative data is at the base of value chain analysis. The weight accorded to each is determined by the end-objective of the value chain analysis, and the time and resources available to conduct the data collection phase. Every value chain analysis is different depending on the entry points of the analysis.
What results are we looking for from the analysis? A good value chain analysis helps us:
- Understand where the greatest opportunities (financial and economic) for improving industry performance from upgrading are located;
- Locate the constraints to upgrading in the chain and the firms operating in the chain;
- Identify who among the set of all stakeholders in the industry will benefit from investments in upgrading, and:
- Who from this group has the incentives, skills, resources and power in the market place to help drive/make these investments?
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