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Agri-food value chains are designed to increase competitive advantage through collaboration in a venture that links producers, processors, marketers, food service companies, retailers and supporting groups such as shippers, research groups and suppliers. A value chain can be defined as an alliance of enterprises collaborating vertically to achieve a more rewarding position in the marketplace.
The basic characteristic of a value chain is market-focused collaboration: different business enterprises work together to produce and market products and services in an effective and efficient manner. Value Chains allow businesses to respond to the marketplace by linking production, processing and marketing activities to market demands.
Typically, vertically aligned means that companies are connected from one end of the primary production process, through processing and possibly into the final marketing stages where consumers purchase a finished product. At each stage the partners' are looking to add value that fulfills an identified market demand. Interaction with the marketplace provides critical information that travels back to decision makers at several links in the chain.
Check out the Value Chain Guidebook, A Process for Value Chain Development for more information on this business approach.