(A11) Value Chain Analysis Presentation Slide

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VALUE CHAIN ANALYSIS

VIETNAM TEA INDUSTRY

Bikram Adhikari
Dhurba Raj Pokhrel
INTRODUCTION

SUPPLY CHAIN VALUE CHAIN

• Supply chain is the process • A value chain is a set of activities


between producing and distributing that an organization carries out to
the product, dealing with the create value or margin for
suppliers and logistics of getting the its customers.
product to market. • It helps to understand the activities
within business that create value. 
• Developed by Michael Porter
VALUE CHAIN ANALYSIS
(VCA)

It is a process where a firm identifies its primary


and supportive activities that add value to its final
product and then analyze these activities.

VCA helps in 


• maintaining long term competitive position of an
organization.
• To sustain value for money in its products or
services (competitive advantage).
VITENAM TEA INDUSTRY

CHALLENGES SOLUTION
• Unequal distribution of power • Develop a comprehensive map of value
and allocation of costs and margins in chain to understand the characteristics of
tea value chain 
the chain actors and the relationships
• Need to foster the among them, of the flow of tea through
integration and participation of the poor in the chain.
the tea chain.
T EA
VA L U E
CHAIN
C O S T A N D M A R G I N S F O R D RY T E A , 2 0 1 4

Chain % added cost %profit


Actors

1. Farmers 14.88 16.4

2. Processors 45.04 11.9

3. Dry Tea Traders 20.28 27.04

4. Wholesaler 11 31.4

5. Retailer 8.8 13.16


CONCLUSION

• The financial positions of actors indicated that the costs and margins are shared unequally in the
chain.
• This inequality is due to the fact that one actor invests more in a chain could gain high profit than
its counterpart investing less.
• Functional upgrading (one actor gaining more from the chain by taking on additional functions)
should be done as an effective way to improve the livelihoods of the disadvantaged.
• By linking tea production, processing and marketing, producers or processors can earn a higher
return for their products.
• Access to market information, therefore, could help farmers to update new farming methods,
improve tea quality, get the latest information about tea price and, therefore, strengthen their
bargaining power.
THANK YOU !!

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