Chapter 4: Commodity Chains

Created @March 17, 2023 4:41 PM

Tags

Property

(supply chain)

A. Capitalism

→ better quality

Chapter 4: Commodity Chains 1

 1. Quality
2. Same materials, different ideas → different outcomes
3. Mỗi nơi một phần, add value vào cùng tạo thành sản phẩm cuối cùng
4. ...
5. Một công ty đa quốc gia như Apple có nhiều trụ sở, công ty con trên khắp thế giới.
6. Cùng nhau hợp lại để sản xuất một sản phẩm và xuất đi thế giới
7.
8.

Commodity chain is not simple about manufacturing processes; many of the

inputs to the chain, and many of the final commodities produced, will take
the form of intangible services.

B. Basic components
Commodity chain is not simple about manufacturing processes; many of the inputs to the chain, and many of the final
commodities produced, will take the form of intangible services.

C. Differentiation of commodity chains in terms of their structure and geography

3. Không có vốn, tech nhưng có geography thì vẫn tham gia vào chuỗi và phát triển: Việt Nam ngày xưa: có hạt cà phê và
gạo

Chapter 4: Commodity Chains 2

 5.

✅ Linking producers and consumers: The commodity chain approach

Chapter 4: Commodity Chains 3
 THREE important dimensions to all commodity chains:

1. Their geography or territoriality (geographical complexity, more dynamic, external sub-contracting, inter-place
competition, service sectors, clustering)

2. Governance,…: The way in which they are coordinated and controlled

3. Institutional frameworks,…: the way in which local, national and international conditions and policies shape that various
elements in the chain

Upgrading strategies in global commodity chains:

Process upgrading: improving the efficiency of the production system → reorganizing the production process

Product upgrading: moving into making more sophisticated products or services.

Functional upgrading: acquiring new roles in the chain (and/or abandoning existing functions) to increase the overall
skill content and level of ‘value-added’ of the activities undertaken.

Inter-sectoral upgrading: using the knowledge derived from a particular chain to move into different sectors.

Management processes:

Who controls the organizational structure and nature of its global

commodity chain?
Who decides where inputs are purchased from, and
Where final goods and services are sold?
Who shapes the restless geographies of commodity chains?
→The important issue of governance

→ how commodity chains are constituted by a mix of intrafirm and inter-firm linkages, and a combination of near and distant
connection. 2 factors:

1. Producer-driven chains are commonly found in industries where large industrial transnational corporations (TNCs) play
the central role in controlling the production system.

2. Buyer-driven: chains tend to be found in industries where large retailers (Wal-Mart, Carrefour, Ikea, etc.) and brand
name merchandisers (Adidas, Nike, The Gap, etc.) play the central role in establishing and controlling production
systems.

Chapter 4: Commodity Chains 4

 Institutional processes

Global commodity chains are complex and divided into intersections.

Rules and regulations that determine how economic activity is undertaken in particular places (e.g. trade policy, tax policy,
incentive schemes, health and safety/environmental regulations, etc.)
• Institutional context is different at spatial scales.
At national scale, a huge range of policy measures to try and promote, and steer,
economic growth within their boundaries.
At macro-regional scale, a variety of regional blocs have considerable influence on trade
and investment flows within their jurisdiction.
At global scale, institutions as WTO and IMF shape the rules-of-the-game for global
financial and trade relationships.

However, joining into the global trade/commodity, the percentage of income from
developed markets has gone up much higher than from the growers (e.g. farmers)
(see p.106-107).

The changing institutional frameworks can significantly affects all three of basic
dimensions of a commodity chain: the input-output structure, territoriality, and
governance)

Chapter 4: Commodity Chains 5