value chains and regional competitiveness...

Value chains and regionalcompetitiveness programs

World BankWashington, DC26th October 2006

30 October 20062

Introduction

Personally 15 years working only in cluster basedcompetitiveness developmentConsulting company COMPETITIVENESS hasperformed 105 cluster initiatives in 12 countriesWe work at value chain level but only for regionalgovernments or donors, never for a single companyWorking in the more advanced regions in the UK,France, Spain, Italy, Denmark, Sweden,… as well asin developing countries (Brazil, Argentina,Thailand,…)

30 October 20063

Agenda

New value chains for competitiveadvantageExamples of value chain change inclusters– Seafood cluster– Bakeries cluster

From cluster initiatives to horizontalpolicies

30 October 20064

Agenda



30 October 20065

In the past companies in a cluster reacted to increasedglobal competition with collaborative initiatives:–sharing parts of their value chains (research,logistics,…)–developing common support services (training,…)

Competitiveness before

Jointservice

Company A

Company B

Company C

Company D

30 October 20066

Developed economies have to respond redefiningtheir businesses where they compete:–Incorporating leading technological innovation–Adding advanced services that require localdelivery

Competitiveness now

Leadingtechnology

Advancedservices

30 October 20067

Competitiveness now

Leadingtechnology

Advancedservices

A different value chain will be neededA cluster collaborative effort maybe needed todevelop some parts of the new value chain

30 October 20068

Agenda



30 October 20069

Market attractiveness: Frozen

Margins squeezed by:Asian new entrantsEuropean industryovercapacityLow cost substituteprotein

Weak postioning:Price sensitivityPowerful retailersconcentrating furtherLimited suppliers

High volume/low margin business

Margins Positioning

30 October 200610

Market attractiveness: Fresh

Higher margins:Logistics act asbarrier to entry“Local” competitionFew substitutes forhealthy protein

Stronger positioning:Consumer demandfor freshnessTraceabilityincreases supplierpartnering

Higher margin large niche business

Margins Positioning

30 October 200611

Seafood service innovation fromHouston (Texas)

Market attractiveness: Fresh

30 October 200612

Become the « Value added hub »for fresh fish in Northern/Central Europe

Opportunities for the Humber cluster

30 October 200613


Build up a “Sea/Airhighway” for freshfish from Iceland ,Faroes and Norway•Humberside airport•Immingham port

30 October 200614


Develop the topready meals

development clusterin Europe

30 October 200615


Establish a “chilledfood shuttle” tolink to:

• Schiphol (air)• IJmuiden (fast-

ferry)

30 October 200616


Piggy-back on Dutchpan-Europeanchilled distributionnetwork:•Presently trucking•Future TGV

30 October 200617


HUMBER: READY MEALDEVELOPMENT

ICELAND: FISHING ANDPRIMARY PROCESSING

HOLLAND: PERISHABLEDISTRIBUTION

30 October 200618

The Vitoria Airport case (I)

(*) not regular routes

Second perishable products gate toEurope after Frankfurt (30,000tonnes / year)

Charter flights with supplyingregions in South Africa, Chile*,Argentina *

Three 747 flights a week fromNamibia with an average of 50tonnes of fish each

30 October 200619

the Vitoria Airport case (II)

Fish not landed directly inVitoria, gets picked up throughtruck services with majorEuropean airports,

…consolidated in Vitoria,

…and distributed to mostSpanish fish markets

30 October 200620

The Vitoria Airport case (III)

30 October 200621

The Dutch Flower Cluster

8000 producers

1500 wholesalers/exporters

3 Auctions

Originally:

quick paymentsfinancial guaranteeorganise logistic

facilitiesconnecting logistics

Now:– International logistic

services facilitiesprovider

30 October 200622

8000 producers


AuctionsGrimsby Fishgate

Co

ntr

act

sale

s

Co

ntr

act

sale

s

Catching

Processing

Dutch cluster Current situation

Humber Seafood Exchange

30 October 200623

8000 producers


AuctionsGrimsby Fishgate

Co

ntr

act

sale

s

Co

ntr

act

sale

s

Catching

Processing

Dutch cluster Current situation



30 October 200624

Agenda



30 October 200625

Mapping of Bakery Related Activity in Yorkshire

Plant Bakers

Self retailing bakers

Sandwich/on the go chains

Independent craft

Specialist suppliers

> 100M

15.000.000– 25.000.000

10.000.000-15.000.000

5.000.000-10.000.000

1.000.000-5.000.000

< 1.000.000.

30 October 200626

Selling bread in the US

Morning stainsMorning stains

Afternoon stainsAfternoon stains

DETXAN

Sell breadthrough

supermarkets

“Sell 22 types ofhealthy bread to

suburban motherson the way home”

30 October 200627

And…the margin?

Morning stainsMorning stains

Afternoon stainsAfternoon stains

DETXAN

$$$?

30 October 200628

On Sept. 22, Tony Alvarez was appointed CEOof Interstate Bakeries (IBCIQ ), the KansasCity-based maker of Wonder Bread andTwinkies, which filed for Chapter 11bankruptcy protection on the same day.

And…the margin?

30 October 200629

And…the margin?

Per store data:Average: $ 1,9 M50% ROI in units

30 October 200630

Industry structure: strategic segments

Fresh-on-the-GoFresh-on-the-GoBread=FMCGFast moving

consumer goods

Bread=FMCGFast moving

consumer goods

Stagnant

Few buyers

Consolidation

Competing for marketshare

Growing

Still fragmented buyers

Formats innovation

Opportunities forgrowth

Low profitability « Better » profitability

30 October 200631

Main offering observations in US

In storefreshnessIn store

freshness

Good quality par bakedmass artisan production

OccasionsOccasionsImpulsebuying

Impulsebuying

Starbucks: 300.000record copiesAu Bon Pain: 200cards/store /week

SpeedSpeed

Self serviceInternet ordering

VarietyChoiceVarietyChoice

Re-organisation of the supply chain

Manufacturing« categories »Manufacturing« categories »

Purchase wellManufactureLaunch productsProduct/brand marketingDeliver to hubsStock in shelvesChannel dispatches

Sell theproduction

through retail

Sell theproduction

through retail

Re-organisation of the supply chain

Manufacturing« categories »Manufacturing« categories » ServiceService

Purchase wellManufactureLaunch productsProduct/brand marketingDeliver to hubsStock in shelvesChannel dispatches

Sell theproduction

through retail

Sell theproduction

through retail

Customise solutionsAggregate offers

Fresh/ Artisan/ QualityMenu/ Packaging/ Oven

Innovate in solutionsPoint of sale innovationExtreme logistics

RotationRespond to customer needs

Look for the finalconsumer and

serve them

Look for the finalconsumer and

serve them

30 October 200634

Reorganising the supply chain

ManufacturingManufacturing ServiceService

Manufacturing

Brand/Product launching

Others

Manufacturing

Others

ServiceProcessingAggregationCustomisationLogistics…

A category An added value service

Manufacturingcentre

Food servicecentre

ManufacturingLong LifeProduct pushClient

ProcessingPerishableLogisticsCustomer

Reorganising the supply chain

30 October 200636

Agenda



30 October 200637

Action implementationStrategyAction implementationStrategy

Action implementationAction implementation

Action implementation




---Year 1---I---Year 2---I---Year 3---I---Year 4---I

CL

US

TE

RL

EV

EL

Strategy

From cluster initiatives to horizontal policies

Mapping

StrategyStrategy

Strategy

StrategyStrategy

Strategy

30 October 200638








CL

US

TE

RL

EV

EL

Strategy

Horizontal policies

Regional institutions


Mapping

StrategyStrategy

Strategy

StrategyStrategy

Strategy

HO

RIZ

ON

TA

LL

EV

EL

30 October 200639








CL

US

TE

RL

EV

EL

Strategy

Definition (re-definition) of horizontal policies

Strengthening of regional institutions


Mapping

StrategyStrategy

Strategy

StrategyStrategy

Strategy

HO

RIZ

ON

TA

LL

EV

EL

Policy reviewsInstitutionalreviews

30 October 200640

Horizontal policies in Catalonia

30 October 200641

Thank you!

For slides, please send a mail to:

[email protected]

www.competitiveness.com

value chains and regional competitiveness...

Documents