mr. i. sawyers - unctad.orgunctad.org/sections/dite_edb/docs/com3em28p016_en.pdfitc approach to sme...

TRADE AND DEVELOPMENT BOARD COMMISSION ON ENTERPRISE, BUSINESS FACILITATION AND DEVELOPMENT EXPERT MEETING ON BEST PRACTICES AND POLICY OPTIONS IN THE PROMOTION OF SME-TNC LINKAGES GENEVA, 6-8 NOVEMBER 2006

PAPER SUBMITTED TO THE EXPERT MEETING*

GGrroowwiinngg ttrraaddee iinn aa ccoommppeettiittiivvee wwoorrlldd

HHooww IITTCC hheellppss ssttaakkeehhoollddeerrss ttoo ddeessiiggnn aanndd iimmpplleemmeenntt ssttrraatteeggiieess ttoo iimmpprroovvee SSMMEE iinnccoommee bbyy ddeevveellooppiinngg bbuussiinneessss

lliinnkkaaggeess ttoo rraaiissee ppeerrffoorrmmaannccee aanndd ddiivveerrssiiffyy eexxppoorrttss

by:

Christine Thompson Christine Thompson

MMrr.. II.. SSaawwyyeerrss

________________ * This paper is reproduced by the UNCTAD secretariat in the form and language in which it has been received.

GrowingGrowing tradetrade in a in a competitivecompetitive worldworld

How ITC helps stakeholders to design and implement strategies to improve SME income by

developing business linkages to raise performance and diversify exports

Business linkages, improving the results of Business linkages, improving the results of SME development and diversificationSME development and diversification

• Use experienced exporters to increase scope anddepth of assistance available to SME’s so that theygain profitable and sustainable access to markets

• Increase SME value added per unit and/or marketshare in current markets by gaining access to TNC marketing skills and experience

• Find out what is needed and build capabilities to enter profitable new markets

ITC ITC approachapproach to SME to SME tradetrade developmentdevelopment & & diversificationdiversification

Identify opportunities, stakeholders & keyissues

Diagnose sector value chains

Formulate strategy & action plans

Develop export readiness & business linkages

Promote products

Assess markets Build market options

Market surveys & Value chain diagnosis

Stakeholder and policy impact

Strategy & action plans

Capacity & competitiveness upgrading

Transactions enabled

Sustainable relationships developed

Working alongside the business community, trade & business support services and government agencies to deliver:

Development of business linkages

Building linkages to implement trade strategies

Some areas of support gained from linkages:Some areas of support gained from linkages:

• Identify market opportunities: ITC Market analysis tools, market & product development specialists in products and services sectors

• Empower sector stakeholders to design development strategies:SHAPE and Compete methodologies engage sector value chainstakeholders in strategy design and organisation of implementation

• Support policy-makers: Business for Development seminars andbenchmarking with other countries sector development policies

• Help to mobilise resources: ITC facilitation of strategyimplementation frameworks and business linkages with multiple partners

• Support stategy implementation with practical technicalassistance: direct counselling for enterprises, coaching and tradesupport institution development according to activities defined in sector and enterprise growth strategies






Promote products


Market surveys & Value chain diagnosis

Stakeholder and policy impact

Strategy & action plans

Capacity & competitiveness upgrading

Transactions enabled

Sustainable relationships developed

Working alongside the business community, trade & business support services and government agencies to deliver:

Development of business linkages

Develop export readiness with business linkages

• Bangladesh leather sector and Milan leather guild

• Sri Lanka / Rubber products

• Wool Garments / Uruguay

ITC ITC approachapproach to SME to SME tradetrade developmentdevelopment& diversification& diversification

Trade strategy design & implementation

Africa: Coffee / Meat / Cotton / Fresh fish / Vanilla / Dairy /Grains and beans / Hides & skins / Leather / Garments …

Asia: Eco Tourism / Spices / Rubber / Construction & Post tsunami reconstruction / Leather / Organic produce / Processed foods / Packaging

Latin America:

Bio Nutrition / Bio Cosmetics / Bio Pharmaceuticals / Wool, textiles & garments

Examples

ITC multi-sector & country experience permits a comparison of strategies, market approaches & performance against other countries

Thank you

www.intracen.org

www.intracen.org/ipsms/tsd

• Clearly articulate what people want to do, why, how, when and with whom

• Organise its implementation

• Realise sector potential and the true value added to products and services




Promote products




What is diversification?What is diversification?

1. Vertical integration/diversification: expanding production or services up or down the current sector value chains

2. Horizontal diversification: moving into one or more industries or value chains related to the existing one and based on sharedknowledge, market experience or materials

3. Geographical diversification: Moving into new geographicalareas for the current market segments to overcome limited growthopportunities in current geographic markets

Plus a fourth form: As pursued by some former conglomerates

Un-related diversification: Opportunisitic acquisition of un-relatedindustries to strip assets or maximise investment return. Now goingout of fashion due to limited sustainability

What ITC does for export growth, diversification What ITC does for export growth, diversification and building linkages:and building linkages:

• Help the business community to identify market opportunities for diversification, investment and greater value addition

• Empower sector stakeholders to design development strategieswith policy-makers to improve overall competitiveness

• Support policy-makers to make sensible decisions about upgradingthe business environment to achieve specific market objectives

• Help agencies to mobilise resources and build linkages to implement feasible policies and development strategies

• Support stategy implementation with practical technicalassistance: direct counselling for enterprises, coaching and tradesupport institution development

TRADE TRADE KNOWLEDGEKNOWLEDGE

MANAGEMENT MANAGEMENT CAPABILITYCAPABILITY

WORKFORCE WORKFORCE SKILLSSKILLS

TECHNOLOGYTECHNOLOGY

DESIGN, QUALITY,COMPLIANCE, FLEXIBILITY

VOLUMES,COSTS, SPEED

IMA

GE

IMA

GE

FEATURES

FEATURES

DELIVERY

DELIVERY

PRIC

EPR

ICE

COMPETITIVEPRODUCT & SERVICE1234

Business services

Trade support & facilitation services

Competitive market space

RELIABILITY,SERVICES

INPUTSINPUTS

Sector level market costs

Sector enabling environment

for enterprises

Competitiveness factors within the control of an

enterprise

International value chain

DESIGN DESIGN SERVICESSERVICES

WORKING & WORKING & INVESTMENT CAPITALINVESTMENT CAPITAL

Sector environment for enabling development:Sector environment for enabling development:

Consumers & Markets

Quality Standards

PackagingLabelling

Supply Chain

Strategy design and implementationStrategy design and implementation

…Aligning trade support services for sustainable development

IDEAS & DiagnosisWhere are we now? How do weget to where we want to be?

What help do we need?Markets & development

visionWhere to go?

Whichproduct/service combinations?

Whatobjectives?

StrategyHow to implement

the changes required to reach

our objectivesImplementation

Management & progressevaluation


Identify opportunities, stakeholders & key issues

• Stakeholders activities and impact of policies mapped

• National institutions and development agencies consulted and briefed

• Support, motivation for change, previous and current projects evaluated

• Expectations, timetable and resource requirements agreed

• Business community and government agencies ready to start

Assess marketsBuild market options

• Diversification studied

• Markets assessed and options analysed

• Demand and competitors intelligence collected

• Investor, market and buyer requirements obtained

• Trade agreements, political, economic, fiscal, regulatory and social situation



• Value chains mapped – linkages, weaknesses & opportunities identified

• Gaps in performance analysed, responses outlined

• Social and economic development factors illustrated

• Market options & objectives developed

• Areas for in-depth analysis and policy change identified


Formulate strategy and action plans

• Strategy options developed

• New market approaches and optimum value chains created

• Action / investment plans compiled and prioritised

• Resource needs and progress indicators determined

• Implementation organised and partners mobilised


Promote products

• Sellers coached at trade fairs and through market orientation tours

• Marketing skills and promotion materials developed

• Sellers matched with buyers

• Transactions facilitated through trade support institutions

• Business results monitored for sustainable growth


ITC ITC strategystrategy design & design & implementationimplementation processprocess

Sector level

Develop market options

Define success factors

Evaluate & optimise value chain performance

Draft strategy & action plan

Working groups:

Validate information & data used

Contact potential implementing partners

Improve quality of solutions, explore options & scenarioswith ITC support

Implementation projects

Monitor progress& environment

Evaluate impact

Refine strategy

Formulate strategy

Prioritise activities & implementation plans

Finalise strategy

Establish implementation & linkages framework

Enterprises or communities define marketoptions & design value chains

Examine options & scenariosResearch solutions

Business/Community development:Training & counsellingInformation Business planningEnterprise matchmakingGroups of Enterprises or Communities

• Identify sector stakeholders & key issues

• Prepare & train for implementation

• Assess markets, business environment & options

Consultation: markets &

environment

Workshop 1Diagnose the

sector Examine options

Workshop 2Finalise strategy & plan

implementation Implementation

Total 4 a 6 months

Develop & finalise elements of business cluster, linkages & community involvement

Step 1:

Step 2:

Step 3: Step 4: Step 5:

mr. i. sawyers - unctad.orgunctad.org/sections/dite_edb/docs/com3em28p016_en.pdfitc approach to sme...

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