This report describes how Swedish agricultural firms may work with value adding as a strategy, and how it might affect their profitability and competitiveness. It discusses what competencies are needed to succeed with value adding strategies and identifies what particular measures in improving the industry’s competencies could be taken to help agricultural firms to increase profitability and competitiveness with added value.
A variety of value adding activities
The report shows several different ways to work with added value, including changes in product properties, production methods, changes in identity of the products. There is also a dimension that regards the relationship between producer and customer through, for example, alternative distribution channels, of communication, or to adjust production to customer needs. Different types of added values are often combined. implying that there is rarely only one single added value offered to the consumer.
Value adding strategies Firms may have different value adding strategies. These are reflected in the firms’ business models, which covers aspects on both the customer and the production side and the configuration of the value offer towards customers.
Successful value adding strategies are characterized by that the firm:
• has identified a particular part of the market (a niche) with low competition • focuses on one or few customer segments and/or distribution channels
• keeps a high product quality
• has effective production processes, good organisational and managerial competencies
• has well developed collaborations with other actors
• has market and marketing knowledge
• has strong relations with their customers
• has a strong identity and a brand that is associated with positive values
• has persistence in the process to adapt to a value adding strategy
Firms do not need all these conditions fulfilled to be successful from a profitability perspective, but they are vital pre-requisites for the success.
Activities to strengthen competencies in agricultural firms Competencies and capabilities in management, organisation and strategic focus is important to implement a successful value adding strategy. So are resources such as access to competent co-workers and physical resources, market and marketing knowledge, and the capability to, in an effective way, transform inputs into outputs. Generally, the firms in the study have very good knowledge in production, but request increased knowledge in management and organisation, as well as within market and marketing. Recommendations of measures on how to increase competencies on working with value adding strategies in agricultural firms are suggested
