Source: adapted from K. Fernandez-Stark, S. Frederick and G. Gereffi (2011) The Apparel Global Value Chain: Economic Upgrading and Workforce Development, Duke University Center on Globalization, Governance and Competitiveness. Value chains can be considered from two axis; functions (horizontal axis) such as procurement, fabrication, and distribution, as well as the
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Producer and Buyer-driven Value Chains
Source: adapted from G. Gereffi (2001) “Shifting Governance Structures in Global Commodity Chains, With Special Reference to the Internet”, American Behavioral Scientist, Vol. 44 No. 10, pp. 1616-1637. Global value chains (GVC) come in two major categories depending on which actor has the most significant influence. This can be either
Product Life Cycle
The product life cycle is defined as all the stages that a product goes from its conception through its obsolescence. The cycle starts with the initial product design, which involves research and development (R&D), and ends with the withdrawal of the product from the marketplace (discontinued). Each stage is often
Supply Chains, Transport Chains and Added Value
Locations are competing to attract, expand, and retain economic activities since they provide employment and generate value for an economy. The generation of value in a value chain is a process that mainly takes three primary forms: Value creation or capture. Value creation concerns the formation of new activities within
The Value Chain and its Added Value
Source: Adapted from the Stan Shih “Smile Curve” concept. The setting of global value chains and their related commodity flows has led to the growing importance of the concept (activities behind creating a good) and logistics (activities making goods available on markets) segments. This leads to new forms of competition
The Value Chain
Value chains (also known as commodity chains) are a series of stages conditioned by the location and availability of raw materials, production costs, and the location of main consumption markets. This sequence allows for the provision of goods to markets. Value chains are also integrated by a transport chain routing
The Transition Towards Manufacturing Capabilities
The manufacturing sector is also subject to transitions as economies develop and the share of manufacturing changes (A), and so do their capabilities. This involves higher added-value and increasing complexity taking place (B) in three stages that are characterized by different manufacturing concerns and policies: Comparative advantages. In the earlier
Major Components to Price Reductions by the Chinese Manufacturing Sector, 2005
Source: Navarro, P. (2006) Report of “The China Price Project”, Merage School of Business, University of California-Irvine. Through the 2000s, among manufacturers, the “China Price” became known as a frame of reference that could be 50% lower than other competitors. Although lower wages in China were an important factor behind
Disconnection of Global Production and Distribution
Corporations constantly make decisions about the organization and allocation of their assets, such as manufacturing facilities. Conventionally, a corporation built supply chains with its assets and positioned them with cost and market access considerations. Globalization, particularly its outsourcing and offshoring component, has incited a growing disconnection between the manufacturing base
The Corporation and its Expansion
Globalization has favored a variety of expansion strategies for corporations, through which many became multinationals. The most common are: Vertical integration. The practice of either expanding backward or forward along the supply chain by acquiring (or merging with) suppliers or customers. This can result in many positive outcomes for a