Integrating structure, conduct and performance into value chain analysis

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Value chain analysis has been adopted by several research and funding institutions for analysing local development opportunities. Development practitioners, however, are still looking for more solid grounds for value chain strategy development, especially since the expected outcomes of interventions, such as poverty reduction, have been unclear. This paper aims to extend the Structure-Conduct-Performance (SCP) framework to connect value chain strategies, such as product, market, technology and governance choices, to outcomes with respect to local development. The extended SCP framework is developed through a literature review and an analysis of structure, conduct and performance aspects and their interactions. In this extended value chain SCP framework, the unit of analysis is not a firm, but a portion of a value chain in a territory, a local netchain, competing against another netchain elsewhere. The proposed value chain SCP framework highlights categories of structure, conduct and performance for value chains and provides an integrated approach to explore possible interactions among those categories. The use of the value chain SCP framework will help practitioners to evaluate different policy interventions. The application of this framework to devise strategies for several value chains is expected in future research, as well as the inclusion of social and environmental conduct and performance categories.