Inclusive Business Models

TRAINING MODULES

Inclusive Business Models TRAINING MODULES

Food and Agriculture Organization of the United Nations Rome, 2017 The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned.

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ISBN 978-92-5-109982-7

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Cover photographs: ©FAO/Giulio Napolitano; ©FAO/Ishara Kodikara; Anne Wangalachi/CIMMYT Closing session Se Designing upgradingactivities Se Identifying commonpriorities Se BM tools:SWOT, Ansoff MatrixandPorters’FiveForces Se toamarketoranagribusiness Visit Se Business modelanalysis Se IBM approach –Amethodologyforimplementation Se Facilitating inclusivebusinessmodels–entrypoints Se Principles forinclusiveandcompetitivebusinessmodels Se Buyers’ perspectiveonprocurement from smallholders Se What doesinclusivebusinessmodelsmean? Se Opening session Se O Int Acronyms Abstract Acknowledgements C ve ssi ssi ssi ssi ssi ssi ssi ssi ssi ssi ssi ssi ontents r r oduct on 10 on 9B on 9A on 8 on 7B on 7A on 6 on 5 on 4 on 3 on 2 on 1 v i ew

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11 71 67 65 53 47 39 37 27 15 vi iv 9 7 3 1 v

iii Inclusive Business Models Verona (PublishingConsultant, ESA, FAO) fordesignandpublishingcoordination. for providingafinalreview. SincerethanksareduetoSimoneMorini(PublishingExpert, ESN, FAO) andDaniela Acknowledgements arealsogiventoShaneHamill(Consultant, ESA, FAO) andElenaIlie(Consultant, ESA, FAO) Tartanac (SeniorOfficer, ESN, FAO) fortheirguidanceandfeedbackinthedevelopmentofthesematerials. TCIB, FAO), Natalie Vergara (Consultant, FAO), MoussaDjagoudi(AgribusinessOfficer, FAO, Ghana)andFlorence of SiobhanKelly (AgribusinessEconomist, FAO). SpecialrecognitionisowedtoCora Dankers (AgribusinessOfficer, This training packageis the result of a participatory process involving a broad range of expertsunder the leadership Acknowledgements

iv Inclusive Business Models notes, descriptionofsuggestedactivitiesandadditionaltoolssuchascasestudiesortemplates forgroupwork. facilitator onhowthesessionsshouldbeorganizedaswellexpectedoutputs, preparatory activities, reference in afacilitator’s manualaccompaniedbyaseriesofPowerPoint presentations. The manualprovidesguidancetothe agricultural value chainsincludingprocessorsandbuyersofagricultural produce. The IBMtraining packageconsists only tosmallholder-based developmentinitiativesbut alsotothebusinessactivitiesofotheractorsinvolvedin farmer-market linkageprojectsincludingministries, developmentorganizations andNGOs, andcanaddvalue not overall competitivenessofavalue chainandreducepoverty. The training targetsdesignersandimplementersof these businessmodelsandstrengtheningthelinkagesthatconnectsmallholderstomarkets canimprovethe include traders, agrifood processors, retailers and contract farming arrangements with large buyers. Supporting Various types of inclusive business models (IBMs) can connect small producers to agricultural value chains. These Abstract

v Inclusive Business Models WB US UND T SNV S S S N M MBP LE IF IBM IB HR HQ GIZ GI F F FA EU C C B BM BIF AABM Acronyms O C SS M MA F TA IAT S G A V L D AF L O I AI

C D F O

CSD

P U E D

W United States United NationsDevelopmentProgr T Netherlands DevelopmentOrganization small andmedium-sizedenterprise small andmediumagro-enterprise sustainable foodlab non-governmental organization Millennium Village Macenta BananaProducersUnion Linking EnvironmentandF International Fundfor inclusive businessmodel International BusinessLeadersF human resources High QualityCassav German Ghana IrrigationDevelopment F F F European Union T International Blue SkiesLtd. business model Business Innov Macenta BananaMerchants ransaction SecurityService armers Organization arm ConcernInternational ood and Agriculture Organization echnical Centrefor Agricultural andRural Cooperation orld BusinessCouncilforSustainable Development Agency forInternationalCooperation Center for TropicalCenter Agriculture Agency forInternationalDevelopment

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a Flour Agricultural Development arming Association Authority orum amme

vi Inclusive Business Models To usethematerialinmosteffectiveway, itisadvisablefor thetrainer toconsiderthefollowing: programme orselectappropriatesessionsasneeded. as thevalue chainapproach. Dependingonthetargetedaudienceanditsneeds, thetrainer candeliverthewhole It isexpectedthatthefacilitatorknowledgeableonmarket approachesforsmallholder-based developmentsuch the presentation. to guidethefacilitatoroncontentthatshouldbecoveredineachsessioncanfoundnotessectionof a PowerPoint presentationtobedeliveredbythetrainer inaface-to-facesetting. Additionally, detailedcomments studies ortemplatesforgroupwork. With theexceptionoffirstandlast, eachModuleisaccompaniedby outputs, preparatory activities, referencenotes, description of suggestedactivitiesandadditionaltoolssuchascase The manualprovidesguidancetothefacilitator onhowthesessionsshouldbeorganizedaswellexpected The IBMtraining packageconsistsinafacilitator’s manualaccompanied byaseriesofPowerPoint presentations. General guidelines reduction”. on “enabling moreinclusiveandefficientagricultural and food systems” andStrategic Programme 3on “poverty These training materialsrepresentoneinstrumentbywhichFAO aimstofulfilitsvisionunderStrategic Programme 4 agricultural produce. to thebusinessactivitiesofotheractorsinvolvedinagricultural value chainsincludingprocessorsandbuyersof concept andapproach. The training canaddvalue notonlytosmallholder-based developmentinitiativesbutalso NGOs, these training materials have been developed to serve as guidance in training field practitioners ontheIBM designers andimplementers of farmer-market linkageprojectsincludingministries, development organizationsand market linkageinitiativesandistheresultof aparticipatoryprocessinvolvingbroadrange ofexperts. Targeting This IBM training package has been developed to support the design and implementation of smallholder-based as tomorecompetitiveagricultural value chains. considered, IBMshavethepotentialtocontributepovertyreduction, improvedfoodand nutritionsecurity, aswell needs andconcernsofbothsmallproducersbuyerswhoconstitutethemainlinkagefarmerstomarkets are enterprises are expected to make profits and address smallholder constraints at the same time. However, when the integrating smallholdersintomarkets. The ‘inclusive’ and ‘business’ elementsofIBMsofteninvolvetrade-offs if The IBMconceptisbasedontheunderlyingideathatbothbusinesscommunityandpoorfarmersbenefitfrom These include traders, agrifood processors, retailers and contract farming arrangements with largebuyers. Various typesofinclusivebusinessmodels(IBMs)canconnectsmallproducerstoagricultural value chains. Introduction administrative activities. Plan thetr session’s objectiveis included. When developingnewcases and examplesthataremostrelevant takingintoaccounttheinterests ofthetargetaudience. Review indetailthesuggestedcasestodecideiftheyareappropriate forthetargetaudience Prepare thefinalagendaconsideringav higher levelofparticipationanddynamicdiscussions. needs. When possible, participantsshould havemoreorlessthesamelevelofexpertise, whichwillallowfor Assess thetargetaudience’ aining aheadintime(minimum onemonth)inordertotake careof all thelogisticaland s levelofexpertiseonmarket approachestodesignthetraining basedontheir , keep themshort(1page) andensureallrelevant information regardingthe ailable budgetandtime. . Choosecases

1 Inclusive Business Models Throughout thetraining, referenceismadetothedocument At theendoftraining participantsshouldbeableto: to complementthetraining. linkages between producer groups and buyers of agricultural produce agricultural of buyers and groups producer between linkages Identify andusepr Identify tr Reflect onassumptionsrelatedtolinkingfarmersmark Understand theInclusiveBusinessModelconceptandapproach. ade-offs betweencompetitivenessandinclusivenesstopromotewin-winsituations. actical toolstopromoteinclusivebusinessmodelswithinmarket linkageprojects. Inclusive Business Models: Guidelines for improving improving for Guidelines Models: Business Inclusive ets –includingtherolesofvalue chainactors. . This publicationprovidesanumberoftools

2 Inclusive Business Models 1 public sector-driven or intermediary-driven. Using a This sessionpresentsthedriversorstartingpointsofIBMs. Inclusivemodelscanbeproducer-driven, buyer-driven, Module 5: IBMdrivers competitiveness ofabusinessmodelandbringsthesetrade-offs tothesurface formoreinformeddecisions. generate profitsandgrow. The principlespresentedinthissessionsupporttheanalysisofinclusivenessand offs oftenhavetobemadeifabusinessmodelthatisinclusiveofsmaller, inexperiencedactorsisexpectedto This session introduces principles to be used as reference for analysing various types ofbusiness models. Trade- Module 4: IBMprinciples they need. Additionally, thissessionprovidesparticipantswitharelaxed, opensettingforinteracting withbuyers. asked toprovideinsightsontheirmotivation forworkingwithsmallholders, thechallengesfacedandsupport buyers, thissessionincludesapanelinterview with diversetypesofbuyersprocuringfromsmallholders. Buyers are consulted duringtheimplementationofvalue chainprojects. To highlighttheimportanceofworkingcloselywith Buyers ofagricultural products areamajorcomponentofinclusivebusinessmodelsandshouldbeadequately its twocomponents: This session explains theIBM concept. Participants are asked todefinetheIBMconceptby breakingitdowninto Module 2: The IBMconcept each otherandprepareforupcomingdiscussions. PowerPoint presentationasthissessionisaimedatorganizingvarious activitiestoallowparticipantsgetknow T Module 1: Openingsession Part 1. IBMconceptandprinciples encompasses 10Modulesasfollows. several implementationtoolswhichillustrate thestepsof IBMmethodologyasappliedbyFAO. The training The training isdividedintwoparts. The firstpartcoverstheIBMconceptandprinciples. The secondpartintroduces Overview and disadvantages ofeachIBMdriver. Module 3: Buildingbackfrom business–therole ofbuyers business rationale behindtheconceptarepresented.

his introductorysessionpresentsthetraining objective, agendaandexpectations. The Moduledoesnothavea Detailed explanation ofthemethodologyisprovidedin session5material. business models business

GO TO POWERPOINT PRESENTATION GO TO POWERPOINT PRESENTATION and GO TO POWERPOINT PRESENTATION inclusive . The existingdefinitionsofIBMaswellthedevelopmentand world café world 1 methodology, participants analyse the advantages

GO TO POWERPOINT PRESENTATION

3 Inclusive Business Models to ensurethecontinuousimprovementoftraining. that couldbeusedforimplementingtheIBMapproach. Asking participantsfortheirfeedbackisimportantinorder T Module 10: Closingsession (step 3). priorities have beenidentified, activities andinterventions to addressthemcan bedesigned and implemented are thoseaction-areaswhichcommontoboththesellerandbuyer(step2). Oncethecommonupgrading This Moduleisdividedin2sessionsandpresents steps2and3intheIBMapproach. Commonupgrading priorities Module 9: Step2–Identifyingcommonpriorities better understandingofbusinessmodelsandwhichcanbeusedtoidentifyimprovementopportunities. Porter’s fiveforcesandthe Ansoffmatrix. The objectiveistofamiliarizeparticipantswithtoolswhichfacilitatea This session presents various tools including the SWOT (strengths, weaknesses, opportunitiesand threats) analysis, Module 8: Businessanalysistools a businessmodelinreallifesituation. Canvas. Additionally, it is possible to organize a visit to a market or an agribusiness to allow participants to analyze the opportunityto choose abusiness model analysis tool fromtwo options –FAO checklistor the BusinessModel identify opportunitiesforimprovement, itisimportanttounderstandhowactorsaredoingbusiness. The trainer has This sessiongoesindetailonthefirststepofIBMapproach: understandingthe business model. Inorderto Module 7: Step1-Understanding thebusiness model following sessions(sixtonine)goindetailoneachofthesesteps andprovidetoolsfortheirimplementation. model, identifyingcommonupgrading priorities, developingaplanforupgrading andmeasuringprogress. The the rationale behind the IBM approach and the four basic steps for its implementation: understandingthe business interventions thatstrengthenmarket linkagesbetweensmall-scaleproducersandbuyers. The sessiondescribes This sessionintroducestheIBMapproachdevelopedbyFAO tosupportthedesignandimplementationof Module 6: ImplementingtheIBM Approach Part 2. IBMimplementation his sessionprovidesparticipantswiththeopportunitytoreflectonknowledgeacquiredandpractical tools Step 3–Designingupgr

ading activities GO TO POWERPOINT PRESENTATION

GO TO POWERPOINT PRESENTATION

GO TO POWERPOINT PRESENTATION GO TO POWERPOINT PRESENTATION GO TO POWERPOINT PRESENTATION

4 Inclusive Business Models 2 Proposed agenda

Afternoon Day 5 Morning Day 5 Afternoon Day 4 Morning Day 4 Afternoon Day 3 Morning Day 3 Afternoon Day 2 Morning Day 2 Afternoon Day 1 Morning Activitiesandtraining topics Day 1 ½ daysession Use theproposed agenda whenpreparingforthetr of trainingcertificatesandclosure Workshop closure: Participant feedback, writtenevaluation, issuing priorities andproposedprojectsupport Presentation ofgroupwork: BManalysis, commonupgrading activities thataprojectmaysupport Identifying commonupgradingprioritiesanddesigning Other businessanalysistools Market / Agribusiness visit Analyzing businessmodelsofsuppliersandbuyers Implementing IBMinitiatives-thestepstofollow Entry pointsforfacilitatingInclusiveBusinessModels Assessing inclusivenessandviabilityofbusinessmodels And plenarydiscussionorgroupwork Building backfrombusiness; panelsessionwithbuyers What doesInclusiveBusinessModelsmean? Ice-breaker activity Opening session Registration ofparticipants 2 aining andtosend infirstcommunicationstoparticipants. Module 10 Module 9b Module 9a Optional Module 8 Optional Module 7b Module 7a Module 6 Module 5 Module 4 Module 3 Module 2 Module 1 Module

5 Inclusive Business Models

Opening session training. Item 2: Introductions. Ask participantstostatetheirname, organization, worklocationandexpectationsfor the representative ofthehostcountry(e.g. Ministryof Agriculture/Trade) topresentakeynote speech. host organizationforopeningremarksandofficialwelcome. training. Then s/hewillintroducethepanelforopeningsessionandpassfloortorepresentative ofthe participants, provideanoverview ofthetraining objective andrunthroughtheagendaforthree/five-day 1: Welcome.Item The sessionfacilitator(preferably someonewhoalreadyknowsparticipants)willwelcome activities thatallowparticipantstogetknoweachotherandprepareforupcomingdiscussions Timing the training, participantsshouldbeableto: The training’s objective is to improve the delivery and quality of results undermarket-linkage projects. At the end of Summary notes Participants willbeableto: Outputs This introductorysessionpresentsthetraining objective, agendaandexpectations. Description Se 01 04 0mnts7. Icebreaker activity 6. Groupphoto 30minutes 5. Round-tablepresentationofparticipants 4. Keynote address fromagovernmentrepresentative(optional) 15minutes 10.15 –10.45 30minutes 3. Openingremarks 10.00 –10.15 10minutes 2. Welcome toparticipants, trainingobjectiveandagenda 09.30 –10.00 10minutes 1. Registrationofparticipants 09.20 –09.30 10minutes Openingsession 09.10 –09.20 30minutes 09.00 –09.10 2hrs15min 08.30 –09.00 08.30 –10.45 ss ion 1 I Reflect onassumptionsrelatedtolinkingfarmersmark Understand the Reflect onassumptionsrelatedtolinkingfarmersmark List theirexpectationsforthetr Understand theobjectiveoftr dentify andusepractical toolstopromoteinclusivebusinessmodels withinmarket linkageprojects. I ntroductions shouldbekept short, aroundoneminuteperperson. I nclusive BusinessModelsconceptandapproach. aining aining I f appropriate, thefloorwillthen bepassedtothe ets, includingtherolesofvalue chainactors. ets I t isimportanttoorganize .

7 Inclusive Business Models Module 1 Opening session convinced ofanothergroup’s arguments. Wrap upthediscussionifallargumentshavebeendiscussed. Continue thediscussionbackandforthexplaintoparticipants thattheymaychangegroupsifhavebeen Then askthemajoritygrouptodefenditspointofview. Ask theminoritygroup(s)toexplainmajoritygroupwhytheyhaveadifferentopinion. side oftheroom, andparticipantswhoonlypartiallyagreeorareundecidedin themiddleofroom. completely agreewiththestatementtostandononesideofroom, participantswhodonotagreeattheother Write downthechosenstatementsothatparticipantscaneasily see it, andreaditoutloud. Ask participantswho Energizer activitywithoneoftheicebreaker statements statement canbechosentobroughtupagainattheendofday1orstart2asanenergizeractivity. arguments againstthem. From experienceitcanbeexpectedthatparticipants willtendtoagreewithstatement2and3, withoutmentioning Write/print ondifferentcolouredcardseachofthefollowingstatements: Preparation 2 minutespergrouptoreportbackonconsensus. 15-minute groupdiscussion. them iftheyagreewiththestatement, andwhyornot. After thegroupphoto, divideparticipantsinfourgroupsoffivetosevenpeople, handeachgroupacardandask Annex 1: Icebreaker activity statements relatedtothecontentthatwillbecoveredduringtraining. See Annex 1. Item 4: Icebreaker group activity. The objectiveisforparticipantstobreaktheicebydiscussing “contentious” for theworkshopreport. Item 3: Group photo. chain carryequalresponsibilityfordeliveringtocustomersthe requiredproduct/services attherightprice. 4. All private sectoractors(farmers, farmerorganizations, traders, processors, retailers, wholesalers)inthe through traders. 3. Itmakes betterbusinesssensetolinkfarmersmarkets through producerorganizationsratherthan 2. Farmer organizationsshouldalways trytotake onmorevalue, adding activitiesinthevalue chain. 1. Traders areonlyinterestedinmakingprofitwithoutproviding anyserviceoradding value. After thegroupphotoopeningsessioncanbeconcludedanddignitariesleave. I t iscommonpractice to haveagroupphotoaftertheofficialopeningwhichcan beused I f importantcounter-arguments arenotbroughtupduringtheopeningsession, a

8 Inclusive Business Models Module 1 Opening session What doesinclusivebusinessmodelsmean? environmental value withmutualbenefitsforpoorhouseholds and thebusinesscommunity. each organizationhasitsowndefinitionaccordingtovision. UltimatelyIBMimpliesaneconomic, socialand benefits forsmallholdergroupsandsmall value chainactors. There aremanyavailable definitionsforIBM, and dependent smallholdersandsmallactorstomarkets bystimulatinglocalbusiness modelpartnershipswhichinclude Preparation Timing FAO. 2015. Reference material its productsandsourcesinputsfinance. The A businessmodeldescribeshowanygivenenterprise–largeorsmall, informalorformal–doesbusiness, markets Summary notes Participants willbeableto: Outputs into itstwocomponents: This sessionexplainstheIBMconcept. Participants areasked todefinetheIBMconceptbybreakingitdown Description Se organizations andthedevelopmentbusinessrationale behindtheconcept. agricultural produce agricultural 15 22 0mnts3.Item 1 PlenarydiscussiononmeaningofIBM 2. Presentation: Overviewofdefinitions 30minutes 1. Groupwork: participants’perceptionof “inclusive” 20minutes 11.50 –12.20 Whatdoesinclusivebusinessmodelsmean? 11.30 –11.50 30minutes 1hr20min 11.00 –11.30 11.00 –12.20 ssio Agree onadefinitionforinclusivebusinessmodels some differences Understand thatv Describe themainconceptsofinclusivebusinessmodels n 2 Inclusive Business Models: Guidelines for improving linkages between producer groups and buyers of of buyers and groups producer between linkages improving for Guidelines Models: Business Inclusive Arrange fortwoflipchartsor largestickysheetsinwhichcards can bemoved Prepare blankcardboardsin twodifferentcolours (Chapter1, pp. 15–18). arious organizationshavedevelopedtheirownIBMdefinition, withmanysimilaritiesbut business models business and “business model” and “business and inclusive inclusive . The presentationcoversexistingdefinitionsbydiverse elementaddressesthechallengeoflinkingcommodity- GO TO POWERPOINT PRESENTATION

9 Inclusive Business Models Module 2 Inclusive business models: concept and definitions Item 3: Plenarydiscussion(30min) Item 2: Presentation ontheinclusivebusinessmodeldefinition(20min) Item 1: Group workonIBMdefinition(30min) Write downthefinaldefinitionandplaceitinavisibleareaofroom. Discuss inplenaryifthereisanythingadditionaltoaddthedefinition. Go backtothesamegroupsoftwo/threeandaskthemdiscusswhethertheywouldlik Allow forquestionsandanswersthepresenter anything to/fromtheterm “inclusive” and “business model” onthestickyboard. mean. then for “business models” todeterminewhattheparticipantsunderstand “inclusive businessmodels” to Move Repeat theexerciseforterm Review thegroupedk When allpairshavefinished, Ask themtostickthecardsonstickyboardprovided. (not sentences)whichforthemdefinetheterm. Hand threecards(samecolour)toeachpairandaskthemwritedownonthek term “inclusive”. Introduce thetopicbygroupingparticipantsinpairstodiscussforfiveminuteswhattheyunderstand See P owerPoint M2. the two sticky boards close together. In plenary review, use the grouped key words for “inclusive” and ey wordsontheboardsfor “inclusive” toseeifanythingismissing. aresourcepersonputsthesame/similarkey wordsintogroupsontheboard. “business model” withadifferentstickyboard. . ey wordsorterms e toadd/remove 10 Inclusive Business Models Module 2 Inclusive business models: concept and definitions Buyers’ perspective onprocurement from smallholders Timing Therefore, itisimportanttoknoweachbuyerindetailorderprovideappropriatesupportservices. wholesalers/processing companies. Eachtypeofbuyeralsohasadifferentsetrequirementsandchallenges. are manytypesofbuyers, includingformalandinformalbuyers, small/medium/largeenterprises andretailers/ In thesameway asthereare many typesoffarmerswithdiverselevelsaccesstoproductiveresources, there product andmarket requirements, andcaninfluencethebusinessenablingenvironment. is vitaltoworkcloselywithbuyers, astheyprovidemarket outletsforfarmers, generate jobs, transfer knowledgeon For anIBMtobesustainable, itisimportantthatbuyersarefullycommittedtothemodelandactivelyengaged. It Summary notes Participants willbeableto: Outputs allow foropeninteraction withbuyers. the challengesfacedandsupporttheyneed. This sessionwillalsoprovideparticipantswitharelaxedsettingto procuring fromsmallholders. Buyerswillbeasked toprovideinsightsontheirmotivations toworkwithsmallholders, the importanceofworkingcloselywithbuyers, thissessionincludesapanelinterviewwithdiversetypeofbuyers failure invalue chainprojectsisthelackofproperconsideration ofbuyers’needsandrequirements. To highlight Buyers ofagricultural productsareamajorcomponentofinclusivebusinessmodels. Oneofthemainreasonsfor Description S 53 70 or4. Option 1: continueplenarydiscussion 2. Panel interviewsessionwithbuyers 1½hour 3. Plenarydiscussionwithbuyers 15minutes 15.30 –17.00 30minutes 15.15 –15.30 1. Introductiononbuyers’perspectiveprocurementfromsmall- 1hour 14.45 –15.15 13.45 –14.45 15minutes 13.30 –13.45 13.30 –17.00 essio Reflect List themainchallengesbuyersfacewhenprocuringfromsmallholders Understand theroleofbuyersindevelopingv n 3 on how buyers may also need support to develop a viable business when working with smallholders ( 4. Option4: Re-discusssomeofthe icebreaker statements 4. Option3: roleplay 4. Option2: groupdiscussionwith1buyerper break coffee & Tea holders Building backfrombusiness see Module 1 Module see alue chains ) GO TO POWERPOINT PRESENTATION 11 Inclusive Business Models Module 3 Building back from business – The role of buyers light ofwhatwas learnedfromthe buyers(see Annex inModule 1). Option 4: Ifbuyers havetoleaveearly, thetimecouldbeusedtore-discusssome oftheicebreaker statementsin challenges forthebuyerswhom theyregularlyface. the buyers. This wouldforcetheparticipantstothinkasabuyerandgivethemopportunitycreate Alternatively, rolescanbeinverted, withthebuyers playingthegroupofsmallholdersandparticipants 3. in Annex smallholders whohaveacontract withoneofthebuyers. An outlineofapossibleroleplaysituationispresented Option 3: Role play. Some participants are asked to volunteer to play the role of representatives of a group of the buyerrisks, challengesandbenefitsofsourcingfromsmallholders. Option 2: Dividetheparticipantsintogroupsandassignonebuyertoeachgroup. Ask eachgrouptodiscusswith and letthemaskthequestionsengagedirectlywithbuyers. not showanysignsofgettingbored, thereis noreasontocutthediscussionoff. Openupthefloortoparticipants Option 1: Continuethediscussionwithpanelists inplenary. Ifthediscussionisinterestingandparticipantsdo of theafternoon. Item 3: Itisadvisabletomake fulluseofthepresence ofthebuyers. There areseveral optionsforthesecondpart sector alsoneedsupport. buyers intheformalandinformalsectorsonhowstrategies foreachmaydiffer. Usuallybuyers intheinformal Include informalbuyersonthepanelifpossible. Try tocreatethespacereflectonhowprojectsneedworkwith commodities. processors, exportersandinstitutionalbuyers-includingbothlargesmallcompaniescoveringavariety of the training andprojectsinthe country. Oftenitwillbemostinterestingtoinviteavariety of buyerssuchasretailers, Item 2: Panel sessionwithbuyers (1h30min).Considerations: Invitebuyerswhofitthespecificobjectivesof structure andletthebuyersinpanelgointodetailsoftheirbusinessprovideconcreteexamples. buyers, butsinceitmightrepeatwhatthebuyerswillsayduringpanel, keep itshort. Justprovidethegeneral Item 1: See PowerPoint M3.Considerations: The presentationisagoodway tostructurethediscussionfor Preparation Item 3 Item 2 If usingroleplay, printoutlay-outforparticipants (Annex3) Review alternativeoptionsandchoosepreferredone their time(e.g. dinnercoupon) Arrange fora “small gift” tobegivenbuyersattheendofsessioninappreciation necessary followupwithdetailedquestions(Annex2) Prepare theintervieweronhowtomanagebuyers–askgeneral questionsandwhen Prepare namecardsforthepanel(name&organization) questions atleastoneweekbeforethetraining(Annex1) Inform buyersonthepurposeofsessionandsendshortintroduction tointerview participants Review theinterviewguidein Annex 1and2adaptittothecontextofbuyers buyers, attachingconceptnote Invite atleastthreebuyerstobeapartofthepanelsession. Sendletterofinvitationto 12 Inclusive Business Models Module 3 Building back from business – The role of buyers 4. 3. agree with that last remark or do you have different experiences in your company? your in experiences different have you do or remark last that with agree 2. discussion. This canbeachievedbyinvitingthepaneliststoreacteachother –forexample, “ During theinterviewinterviewershouldgradually movefromaquestion-and-answerformattomoreinteractive direct thefollow-upquestiontoanotherpanelistavoidrepetition. answered byallpanelmembers. After that, theinterviewercanaskthirdquestiontoonlytwopanelistsand The ideaofthepanelsessionistocreatea televisiontypeofgroupinterview. The firsttwoquestionsaretobe Annex 2: Buyers’ panel–interviewguide Information tobeprovidedpanelistsaboutoneweekbefore thetraining. Annex 1: Interviewintroduction forpanelists 1. Potential questionstoask: producers? 7. Which policiesandactionscouldpromotegreaterengagement fromtheprivate sectorwithsmallholder 6. The company’s roleinaccesstofinanceforitssmallholdersuppliers. 5. What arethemainchallengeswhenprocuringfromsmallholders? 4. Smallholderorganizations. 3. Specificprocurementarrangementstofacilitatebuyingfrom smallholders. 2. The businesscasemotivations forbuyingfromsmallholders. 1. A briefdescriptionofyourbusinessandproductbeingsourced. The sessionfacilitatorwillaskthepanelistsinterviewstylequestions onthefollowingsubjects:

smallholders’ organization? Do youbuyfromindividualsmallholdersorshouldtheybe organized? Ifso What arespecificmeasuresinyourcompanytomak Why Please provideabriefdescriptionofyourbusiness and processingfacilities? Probing: organization/planning oftheproduction? facilities systems?Organizationalstructure(intermediaries tolinksmallholders)?Bulkselling?Better Probing possibilities: Contribute tolocalsocialandeconomicdevelopment?Createvalue? Difficultytogetvolumerequired? costs? Quality? Specific product requirements? Laws limiting large-scale commercialfarming? Brand name? Probing possibilities: Any specificchar What typeofproduct: Product beingsourced(orinterestedinsourcing)fromsmallholders are you buying from smallholders? What are the business-case motivations for buying from smallholders? Democratic structure?Record-keeping andaccountability?Minimumproductionpotential?Storage acteristics orproductrequirements? Forecasting demand?Payment mechanisms?Logisticsandotherpost-harvestactivities/ Lackofotheravailable suppliers fortheproduct?Price?Location? Transportation staples, highvalue, cashcrop, foodcrop? e buyingfromsmallholderspossible? . , whatareyourrequirementsforthe ” and Ms... , do you you do , Ms... and 13 Inclusive Business Models Module 3 Building back from business – The role of buyers 7. 6. need inorderto produceanddelivertherequired quantityatapricebelow market average. enable theprocurement ofcassava from smallholders. Considerwhattypes ofservicesandsupportsmallholders Role 2: As therepresentative oftheXYZfarmerorganization, discusswiththecompanywhattype ofstrategy could quantity andpricerestriction. Role 1: As therepresentative of ABC, presentyour positionandproposeabusinessmodelconsideringthe required the abovesituation? What wouldthatmodellooklike? Question: Isitpossibletodesignabusinessmodelthatcanbebeneficialforboththecompanyandfarmersgiven the modeltobesustainableinlongrunis30percentlower thanthemarket price. After performingadetailed analysis, ABC came tothe conclusion thatthepriceitcanofferto farmers in order for cassava perday(aroundhalfofthecompany’s demand)fromapproximately 4 000smallholders. ABC hasinitiatedconversationswithXYZtodevelopaprocurement modelinordertoprocure32tonnesofraw Malawi, havebeenabletoincreaseitup21tonnes/hectare. higher yielding)itispossibletoincreaseyields. Average yieldin Africa is10tonnes/hectareandcountries, like to 5tonnes/hectare. However, withmoreintensiveproductionandtheuseofimprovedvarieties (disease-freeand their surpluses in local markets close to their farms. Smallholders have a low production yield for cassava, close commercializing cassava as acashcrop. Smallholders grow cassava forhomeconsumption, occasionallyselling There isalargenumberofcassava producersintheareacloseto ABC. However, farmersarenotusedto High QualityCassava Flour(HQCF)thatisusedasasubstitutefor wheatflourforsnacksandbiscuits. country. The agro-processorwants tosourceraw cassava directlyfromsmallholdersforlarge-scaleproductionof ABC is a large agro-processor that manufactures and sells biscuits and snacks in most supermarkets around the General situation consumption andwithsurplusessoldinnearbymarkets. Role 2: RepresentativeoffarmerorganizationXYZ, withmembersproducingcassava generally forhome Role 1: Representativeoflargeprocessingcompany ABC, withdemandforcassava toproduceflourforbiscuits. and large processing company Developing aprocurement modelbetweenafarmerorganization Annex 3: Roleplaying What arethemainchallengeswhenprocuringfromsmallholders? 5.

b) a) P smallholder toaccessfinance, e.g. agreementswithfinancialinstitutions(banks, microfinance)? Has thecompanyofferedcreditorothertypesofpre-financing, b) there particulardifferencesdependingonthesector, suchasstaplescomparedtohighvalue crops? Are thereanyparticulardifferencesbetweenactionstomotivate small, mediumorlargecompanies?Orare relations withsmallholders, suchastaxexemption? with alargebusiness? a) olicies andactionstopromotegreaterengagementfromtheprivate sector What typesofactionscouldmotivate alargernumberofcompaniestoengageinbusinesswithsmallholders? Are there any particular differences in the challenges faced bya small/medium-size company in comparison Are thereanyexamplesofpoliciesorconcreteactionsthatmotivated yourcompanytoengageintrading selling? Contract enforcement?Informality?Smallholders’organization? Probing: Productqualityandquantity?Supplyreliability?Logisticsmechanisms?Infrastructure? Side- orhastherebeenanyassistanceforthe 14 Inclusive Business Models Module 3 Building back from business – The role of buyers Principles forinclusiveandcompetitivebusinessmodels Timing FAO. 2015. Reference material principles provideaframework toanalysebusinessmodelsandreflect onhowtheycouldbeimproved. “business” elementrelatestoanenterprise’s way ofdoingbusinessanditsviability. The inclusiveandcompetitive element ofabusinessmodelrelatestotheconstraints oflinkingsmallholdersandvulnerable groupstobuyers. The The “inclusive” and “business” elements of an inclusive business model can be competing forces. The “inclusive” Summary notes Participants willbeableto: Outputs decisions. inclusiveness andcompetitivenessofabusinessmodel, bringingthesetrade-offs tothesurfaceformoreinformed to generate profits and grow. The principles presented in this session allow for an analysis to be made on the offs sometimeshavetobemadeifabusinessmodelthatisinclusiveofsmaller, inexperiencedactorsisexpected This session introduces principles to be used as reference when analysing diverse types of business models. Trade- Description S agricultural produce agricultural 15 23 5mnts6. Plenarydiscussion ofgroupworkresults 35minutes 11.55 –12.30 04 15 or 5mnts5. 4. Groupwork: Plenarydiscussionofthe eachgroupto analyse thesamecase TSS caseaccordingtotheprinciples 1hour, 15minutes 3. Video on TSS Potato, Tanzania, toanalyseit 15minutes 10.40 –11.55 2. Presentationoninclusiveandcompetitiveprinciples 30minutes 10.20 –10.40 10minutes 09.50 –10.20 RecapofDay1 20minutes 09.40 –09.50 Principlesforinclusivebusinessmodels 10minutes 09.20 –09.40 10minutes 09.10 –09.20 2½hours 09.00 –09.10 09.00 –12.30 essio but therearesomecharacteristics thatmake businessmodelsmoreinclusiveandcompetitive Reflect Analyse businessmodelsbasedontheirdegreeofinclusivenessandcompetitiveness Understand thattherearetr n 4 Inclusive Business Models: Guidelines for improving linkages between producer groups and buyers of of buyers and groups producer between linkages improving for Guidelines Models: Business Inclusive on how there is no standard ideal business model. Each business has to adapt to specific circumstances, (Chapter3, pp. 24–27). ade-offs betweeninclusivenessandcompetitiveness Alternatives include: Potato,on TSS 1. Video Tanzania Tea & coffee break coffee & Tea Cassav Maize P alm Oil, Pamol –MANAFACOOP, Cameroon , PremiumFoods Ltd, Ghana a, UniversalIndustries, Malawi GO TO POWERPOINT PRESENTATION 15 Inclusive Business Models Module 4 Inclusive business model principles could bepromoted. principles. However, there are some characteristics that make business models more inclusive and competitive that environment and the history of the company. Also note that it is hard for a business model to excel in all the way ofcarryingoutbusiness, influenced bytheproductithandles, theproductiveresourcesavailable, thebusiness Wrap-up thediscussionobservingthatthereisnoidealbusiness modelandthateachorganizationhasitsown on screen. Discuss ifthereisadifferenceofopinionbetweengroups. Item 6: Facilitator asks in plenary what the various groups filled in for each principle. Somebody types the results additional informationmaydistract the participantsfromthetaskathand. information thatisnotstrictlynecessaryforabasicunderstanding ofthecaseorforprinciplesanalysis, as information necessarytoperformtheanalysisofinclusiveness andcompetitivenessprinciples. Leaveoutany If usingacasenotprovidedhere, make suretowritethecaseonmaximumonepageandprovideminimum the casetheydidnotworkon). participants areattentive(whengroupsanalysedifferentcases, participantswillnotparticipateinthediscussionof Consideration: Make all groups analyse the same case so that discussionin plenary hasfurtheranalysisandall case. studies areprovidedin Annex 3. HaveenoughcopiesprintedoftheIBMprinciplestemplateandselected of buyerthatareclosetothecommoditiesandtypesbuyersparticipantsnormallyworkwith. Potential case Item 5: Preparation. Select a case that is relevant to the participants. Use a casewith a commodity and a type is nottoreachyes/noanswersbutanalysevarious aspectsofthemodel. Consideration: Explaintoparticipantsthatprinciplesprovideaframework foranalysisanddiscussion; theobjective example ofthepotentialresult. in plenarytheperformanceof TSS case. Identifysomeonetotypeintheresultsonscreen. See Annex 2foran Item 4: HandouttheIBMprinciplestemplate(Annex1)andputonscreen. For eachprinciple, discuss competitive principlesthatwerepresented. Item 3: Showthevideoagain, butthistimewiththe taskofanalysingthecaseaccordingtoinclusiveand Item 2: ExplaintheprinciplesusingPowerPoint presentationM4. wake upandgetinterestedintheworkofday. Seelinktovideo: http://www.youtube.com/watch?v=grKlmiLHyjI Transaction SecurityService(TSS)works. Itmayalsobethefirstactivityinmorningandallowsparticipantsto that describesabusinessmodel. The firstshowingistoallowparticipantsgetageneral understandingofhowthe Item 1: Video Case. Without giving any detailed explanation, tell participants we will start the day watching a video points fromthefirstdayoftraining. Recap Day 1 (10 min). At theendofday1, arrange foroneparticipanttoprepareafive-minuterecapofthemain Preparation ea Confirmparticipantwhowillperformrecapofday1 Recap Item 5 Item 1 Print copiesofcases Review casesandselectonethatisappropriateforproject countrycontext Print templateswithIBMprinciples(2copiesperparticipant) Test thevideotomake sureitdisplays Arrange forspeakers toshowthevideo 16 Inclusive Business Models Module 4 Inclusive business model principles PowerPoint andcanbefoundhere: http://www.fao.org/fileadmin/templates/esa/doc/IBM_tool.xlsx to theirownworkinlinkingsmallvalue chainactorstobuyers. The toolisreferencedonslide12oftheModule4 diagram. Participants in the IBM training could be invited to see how the toolfunctions and how it can be applied questions areposedtobothproducersandbuyers, afterwhichresultsarecomparedand plottedonaspider-like provides avisualrepresentationofparticularbusinessmodelbasedontheIBMprinciples. Inpractice, the Option: It maybeusefultopresenttheaccompanyingquestionnairecreatedassessIBMprinciples. It 17 Inclusive Business Models Module 4 Inclusive business model principles and competitivenessprinciples Annex 1: Template forcaseanalysisoninclusiveness 6.1 5.2 5.1 4.1 3.2 3.1 4.2 2.1 2.2 1.2 1.1

respond tocustomers’needs? or partnerssupportcapacity buildingto needs? Howdoesthebusiness model technical skillstorespond customers’ Do themainactorshavebusinessand independently? when doingbusiness, ordotheyact sellers) inthebusinessmodelcollaborate collaboration betweenactors? Are theremechanismstoimprove In whichw participation inthebusinessmodel? actor toearnenoughensurehis/her How doesthebusinessmodelallow payments)? efficiency (e How doesthebusinessmodelencourage model? Oristhereshareddecisionmaking? Do anyoftheactorsdominatebusiness with? With whichpartnersdoestheBMworks small actors? are arangeofmarket outletsavailable for does thebusinessmodelensurethatthere mark Are smallactorsmostlydependentonone transactions)? farming, outgrowerscheme, informal established betweenactors(e What typeofbusinesslinkagehasbeen use? supply chainactorsdoesthebusinessmodel What experienceandknowledgeofexisting commercial)? of land, typeofagriculture–subsistence, What aretheircharacteristics(e Who aretheactorsincludedinBM? et outlet?Ifyes, whichone?Ifno, how What aretheirroles? ay dothemainactors(buyers/ .g. timelydelivery, quality, timely .g. contract 6. 5. 4. 2. .g. size Respondingtocustomers’demands Business-to-businesscollaboration IBM Principles–Inclusiveness Managingabusinessstrategically 3. Inclusionoftherightpartners Inclusionofmarket opportunities 1. Inclusionofactors 18 Inclusive Business Models Module 4 Inclusive business model principles of theprinciples. probing ortostartadiscussiononpotentialdifferentpointsofview. The objectiveistohaveathoroughanalysis This example is not meant to provide correct answers, but it may be used by the facilitator as a checklistto use for Annex 2: Potential result ofanalysis TSS case 3.2 3.1 3. Inclusionofpartners 2.1 2. Inclusionofmarket opportunities 2.2 1.3 1.2 1.1 1. Inclusionofactors

development project(IFAD logo). agents. Italsoprobablyreceives supportfrom to dominatethemodel. between producersandagents. Noactorseems T companies tomak It includeslocalbanksandcellphone seem toincludethelocalgovernment. T T agent. the TSS farmers andbuyersinurbanmarkets, through T included inthemodel. farmer’s organizationsthatcouldhavebeen of anyactors It isnotcleariftheBMhasledtoexclusion requirements. of producingpotatoesaccordingtoquality most committedfarmerswhoarecapable T potatoes. advantage oftheirknowledgetoproduce T product andrelationwithbuyersproducers. advantage oftraders’familiaritywiththe a baseofsuccessfultraders. The BMtakes confirmed that One oftheparticipantsfamiliarwithcase T here isaclearprocessfortransactions he modelisprivate sector-driven anddoesnot he BMlinksfarmerswithonlyonemarket. he BMsupportsinformallinkagesbetween he BMencouragestheparticipationof he modelincludesfarmersandtakes he BMincludesexistingsupplychainactors. . There isnoinformationabout TSS agentswereselectedfrom Inclusiveness e paymentstofarmersand Potential results for TSS case 6.2 6.1 6. Businesscapacityandskills 5.2 5.1 5. Business-to-businesscollaboration 4.2 4.1 4. Businesscompetitiveness

sheet). with theestablishedformonanExcelspread management (calculationofcostsandbonuses (information onprices)andfinancial market pricemovements. production skillsandtoinformthemabout T TSS agentshavethemark and increasedcollaboration. prices andcommissionsallowsfortransparency T facilitate collaborationamongactors through theuseofcellphonesandmeetingsto Actors inthemodelcollaboratetodobusiness which allowsactorsinvolvedtoearnenough. to delivery. There isalsopaymentofbonuses, accounting forallofthecosts, fromproduction T quality andtimelypayments. reduction, timelydeliveryofproducts, consistent T he modelworkswithfarmerstoimprovetheir he useofthespreadsheettocalculatecosts, here isatransparentpricingmechanism he modelencouragesefficiency, costand waste Competitiveness et knowledge . 19 Inclusive Business Models Module 4 Inclusive business model principles 1 know whentheywillbepaidandthecompanydoesnothavetodealwithindividualpayments. according to the amount each of them supplied and signed for at the collection points. In this way, the farmers first weekofthemonthintoaccountforallfreshfruitbunchesreceived. The cooperative paysthefarmers company. To resolvethisissue, MA higher pricethanlocaltraders, butdelayedpaymentscausedfarmerstonotselltheirentireproductionthe MA harvest andprocessing, whichensureshigher-quality oilandpreventstheproductfromrotting. Pamol sothatPamol comestocollectalltheharvestwithinatwo-three-dayperiod. This decreasestimebetween within 3milesfromthefarm. Ineachzone, farmersharvestatthesameperiod. Datesareagreed beforehandwith MA harvest tocontrolifthequalitycorrespondsagreedspecifications. established aqualitycontrolbrigadewhichprovidesproductionandharvestingadvicemakes spot-checksat to farmers for a discount price, and the farmers can make use of the Pamol nursery facilities. MA To beabletoreachthisquality, bothPamol andMAFACOOP madesomeinvestments. Pamol offerscertifiedseeds After several meetings, MA standing issues. to organizeproducer-buyer meetingsinwhichsmallholdersandstafffromPamol cametogethertodiscusslong- EU-funded project, alocal Many ofthesmallholdersinareaaroundPamol aremembersofacooperative, MA are noformalsalescontracts signed. Pamol issemi-formal. SmallholdersareonlyabletosellPamol iftheyareamemberofcooperative, butthere The small-scale growers own on average two hectares of land. The relationship between the smallholders and scale oilpalmgrowers. recent laws, Pamol cannotincreasetheplantationandthereforeitregularlybuysfreshfruitbunchesfromsmall- Pamol ownslargeplantationsbuttheproductionisnotenoughtosatisfydemandforcrudepalmoil. Becauseof palm oilfordirectsalesinthelocalandregionalmarkets. Also, someofthisoilissoldtorefineriesforsoapmaking. Pamol PlantationsPlcisthethirdlargestcompanyinCameroon’s palmoilsector. The Pamol millproducescrude Case 1: Pamol andMANAFACOOP, Cameroon Annex 3: Potential casesforanalysingIBMprinciples AO. 2015. F N N AFACOOP alsoheldnegotiationswithPamol regardingthepricepaidtoproducers. Pamol usuallypaida AFACOOP andPamol alsoestablishedsixcollectionpoints. Each farmerhasbeenallocatedacollectionpoint Inclusive business models business Inclusive N N GO actedasanintermediarybetweenMA AFACOOP andPamol agreedonspecificationsforgood-qualityfreshfruitbunches. – N Guidelines for improving linkages between producer groups and buyers of agricultural produce agricultural of buyers and groups producer between linkages improving for Guidelines AFACOOP opened an accountwithalocalcommunitybank. Pamol pays every 1 N AFACOOP andPamol. The firststep was N AFACOOP. As partofan N AFACOOP . 20 Inclusive Business Models Module 4 Inclusive business model principles 3.2 3.1 3. Inclusionofpartners 2.2 2.1 2. Inclusionofmarket opportunities 1.3 1.2 1.1 1. Inclusionofactors

MANAFACOOP. encouraged bymeetingsbetweenPamol and production). large plantationsandencouragesmallholder the government(whichpassedalawtoimpede NGOs, donor(EU), financialinstitutions, and T T informal. MANAFACOOP. Howevertherelationisstill buyers. they cansellpartoftheirproductiontoother although sincethereisnoformalagreement Smallholders haveaccesstoonebuyer(P F traders. between Pamol andthefarmers; thisexcludes MANAF experienced inproducingpalmoil. product requirements. Farmers arealready who areabletoproduceaccordingPamol T company). farmers T armers arelinked toPamol through here isashareddecision-makingprocess he modelincludesotherpartnerssuchas he BMencouragestheparticipationoffarmers he BMincludesvarious actors: , cooperatives, Pamol (processing ACOOP isplayingtheintermediaryrole Inclusiveness Case 1: Pamol andMANAFACOOP inCameroon amol), 6.1 5.2 6. Respondingtocustomerneeds 5.1 5. Business-to-businesscollaboration 4.2 4.1 4. Businesscompetitiveness

meet customers’requirements. facility andqualitybrigadetoensureproducts techniques andhavethesupportofnursery F roles andresponsibilitiesareclear. among actors. frequent meetingstofacilitatecollaboration points, paymentmechanisms, negotiationsand T Actors collaboratewitheachother attractive price. P mechanism toensurepromptpayments. having aqualitycontrolbrigadeandpricing advice tofarmersonproductiontechniques, and of qualityseedlings, collectionpoints, offering T armers receiveadviceonproduction here aremechanismssuchasthecollection he BMencouragesefficiencythroughtheuse amol buys regularly from MANAFACOOP at an Competitiveness , andthe 21 Inclusive Business Models Module 4 Inclusive business model principles The main challenges of the technical supporttothesmallholderfarmers. Under anexistingMemorandum of Agreement withtheMinistryof Agriculture, ministryextensionofficersprovide years withgrains. and PremiumFoods advances theremaining30percent, whichtheleadfarmerpaysbacktocompanyovertwo To assistleadfarmerstobuytractors, theUSAID/ADVA 2 The company wants to increase the number of outgrowers and to improve their productivity through the smallholders. increase itsprocurementofgood-qualityraw materials. Currentlyitsourcesmaize, soybeans, sorghumandricefrom tonnes within three years.projections to increase production to 50 000 To reach this goal, the company needs to tonnesperyear.capacity tohandle50 000 tonnesperyear,The companyiscurrentlyoperating at20 000 with Premium Foods LtdisalargeprocessingcompanyinGhana. Ithasaprocessingfacility closetoKumasi witha Case 2: Premium Foods Ltdandnucleusfarmers, Ghana maize andriceproducts. with theFood ScienceDepartmentsoftwo universities inGhanatofacilitatenewproductresearchconsumer warehousing regulations and implementation of the warehouse receipts system in Ghana. It also has partnerhsips a partnershipwiththeGhanaGrains Council. This involvesdevelopinggrades andstandardsaswellconducting yielding maizevarieties toboostproductionlevelsofsmallholderfarmers. Onthemarketing side, Premium Foods has Furthermore, PremiumFoods initiatedapartnershipwiththeCropResearchInstituteinKumasi todevelophigh- service chargesandproductadulterations. of properdocumentationbyleadfarmers, andtheunwillingnessofsomefarmerstopaybackinputcredits, topay project. The Agricultural Practices. Each larger lead farmer manages an average of 500 farmers and coordinates service delivery according to the Good

http://premiumfoodsgh.com ii. i.

a. the agro-dealersandaddanincentiveforinputstobedeliveredfarmers. Provision ofinputcredit: b. Provision ofmechanizationserviceswithtr

outgrowers. Lead farmerswhoowntr Premium F Go Farming Go oods providesitsowntractors toleadfarmersforservicedeliverysmallholderoutgrowers. projectworkswithlargecommercialfarmerswhoarealsomanagingsmallholderoutgrowers. andG8Cooperation Framework tosupport The Go Farming Go theleadfarmersprovideinputcreditdirectlytooutgrowerfarmers, ortheypay actors haveagreementswithPremiumFoods toprovideservicessmallholder project are the unwillingness of farmers to adoptnewtechniques, the lack actors. N CE projectprovided70percentofthecosttractor N ew Alliance forFood Securityand 2 N utrition inGhana. Go Farming Go

22 Inclusive Business Models Module 4 Inclusive business model principles

3.2 3.1 3. Inclusionofpartners 2.2 2.1 2. Inclusionofmarket opportunities 1.3 1.2 1.1 1. Inclusionofactors

and smallholders. nucleus farmersorbetween making processbetweenPremiumFoods and T it doesnotincludefinancialinstitutions. institutions andGhanaGrainsCouncil. However, ministry ofagriculture, nationalresearch T order tosellPremiumFoods. are boundtoworkwithnucleusfarmersin products (sorghum, maize). Also, smallholders F Smallholders areboundtoonebuyer(Premium T transportation. as PremiumFoods providestractorsfor T takes advantage oftheircapabilities. most committedfarmers(leadfarmers)and T farmers T oods), butcansupplydifferenttypesof here isnoinformationaboutthedecision- he BMincludespartnerssuchasuniversities, he BMlinksfarmerstoanoutgrowerscheme he BMleadstotheexclusionoftransporters he BMencouragestheparticipationof he BMincludesvarious actors: , leadfarmers, PremiumFoods. Inclusiveness Case 2: Premium Foods Ltdandnucleusfarmers, Ghana 4.2 6.1 5.1 4.1 6. Respondingtocustomerneeds 5. Business-to-businesscollaboration 4. Businesscompetitiveness

for productionandpost-harvesting. activities; theywerenotusingtheacquiredskills are strugglingtoincorporatethemintheirdaily F do notadheretothem. facilitate collaborationamongactors, butactors such astheMemorandumof Agreement to how toworktogether Actors inthemodelhavelimitedagreementson unable topaybacktheirloans Actors intheBMdonotearnenoughandare keeping. could improveintimemanagementandrecord the trucksprovidedfortransport. ButtheBM ones. There havebeengainsinefficiencywith restraining themfromusingtheirtraditional but farmersneedtoadoptnewtechniques T armers aretrainedinnewtechniques, butthey he modelpromotesgoodagriculturalpractices, Competitiveness . There aremechanisms . 23 Inclusive Business Models Module 4 Inclusive business model principles 3 CAVA fortheprovisionofcassava cuttingstosmallholderfarmers. provides smallholdersaccesstotraining infarmingtechniquesandbusinessskills. Italsoreceivedagrant from To intensifysmallholdercassava productionandmake aggregationofcassava atfarmgatefeasible, Universal get ahigherrevenueperhectareifproductionisincreased. than other crops such as maize and pigeon pea, so even with the lower price offered by Universal, smallholders can motivated toinvestinscalingup productionandincreasevolumes. Cassava canhaveahigheryieldperhectare model tobesustainableinthelongrun. Universal expectsthatbyofferingastablemarket outlet, farmerswillbe market priceofraw cassava perkgis30percenthigherthanthepricethatUniversalcanofferinorderfor the Finding a correct pricing model that works for both sellers and buyers has been one of the main challenges. The farmers andrelieslesson parallel procurement structurethat has directengagement with themorecommerciallymindedandentrepreneurial time todevelopandtherearestillnoformalcontracts withsmallholders. The companyiscurrentlydeveloping a However, resultsfrom farmers growingcassava; andtheMinistryof Agriculture, whichprovidedextensionsupport. of smallholderclustersandprovidingtraining; Farm ConcernInternational(FCI), workingwithanetworkof3 000 such aspartneringwithorganizationsincluding: theMillenium Village (MV)project, supporting theorganization surpluses inlocalmarkets closetotheirfarms. Universal exploredavariety ofoptionstoengagewithsmallholders commercialized cassava asacashcropbeforeandgrewcassava forhomeconsumption, occasionallysellingtheir The typeofsmallholdersUniversalisworkingwithwerenotusedtoformaltransactions. Farmers hadn’t smallholders. Universalalsosourcesfromlargercommercialfarmersandindependenttraders. is tosource32tonnesofraw cassava perday(aroundhalfofthecompany’s demand)fromapproximately 4 000 Quality Cassava Flour (HQCF), which is used as a substitute for wheat flourfor snacks and biscuits. The objective Universal launchedaninitiativetosourceraw cassava directlyfromsmallholdersforlarge-scaleproductionofHigh biscuits andsnacksinmostsupermarkets acrossthecountry. has positioneditselfasaleadingfood, beverage andagro-processingindustrywithanestablishedbrand, selling Malawian biscuitmanufacturer, UniversalIndustries, employees. isalargebusinesswithover1 200 The company Case 3: Universal Industriesandsmallholders, Malawi , 2013. BIF Commercializing cassava Commercializing N GO-led smallholderfarmershavenotbeenasexpected. Relationshipshavetaken significant N GOs andtraders. – N ew opportunities for Universal Industries and Malawian smallholders Malawian and Industries Universal for opportunities ew 3 . 24 Inclusive Business Models Module 4 Inclusive business model principles 3.2 3.1 3. Inclusionofpartners 2.2 2.1 2. Inclusionofmarket opportunities 1.3 1.2 1.1 1. Inclusionofactors

mechanisms. any indicationofshareddecision-making decision-making. There doesn’tseemtobe which seemstohaveallofthepowerin services. of Agriculture fortheprovisionofextension the businesslinkages, andwiththe Ministry facilitate linkageswithothertypesofbuyers. contracts. traders. commercially minded. Italsowillexclude in producingcassava. entrepreneurial farmers. with themorecommerciallymindedand for homeconsumption, butistryingtowork working withsmallholderswhogrewcassava T T produce tothebuyer Smallholders arenotobligedtosellalloftheir relationships withUniversal. Smallholders establishedinformalbusiness T T solid experienceinproducing, Universal Industries–largeagro-enterprisewith Small cassav Actors includedinthemodelare: he BMisdominatedbyUniversalIndustries, he BMworkswithlocalNGOstofacilitate he modelexcludesproducerswhoarenot he modelusestheexperienceofsmallholders a producers(4 000)–theBMis Inclusiveness Case 3: Universal IndustriesandMalawiansmallholders , butthemodeldoesn’t There arenolegal sellingbiscuits. 6.1 5.1 4.1 6. Businesscapacityandskills 5. Business-to-businesscollaboration 4.2 4. Businesscompetitiveness

cuttings. and businessskills, provisionofcassava good example. works forbothproducersandsellerscanbea and Universal. The searchforapricemodelthat to increasecollaborationbetweensmallholders T incomes canincrease. if smallholdersintensifytheirproduction, their mark Price beingofferedbyUniversalislowerthan root isprocessed. harvest andtakes ittoprocessingplantwhere Universal sourcescassav T raining tosmallholdersinfarmingtechniques here isnoexplicitdescriptionofmechanisms et price; butduetocassava’s higheryield, Competitiveness a atfarmgateafter 25 Inclusive Business Models Module 4 Inclusive business model principles

Facilitating inclusivebusinessmodels–entrypoints Timing FAO. 2015. Reference material providers implementprojectstosupportsmallholder-based value chains. complemented with intermediary-driven models in which non-governmental organizations (NGOs) and service FAO’s entrypointistoworkwithgovernmentsonpolicydesignandbestpractices basedonnormativelearning, to developabusinessmodelthatisbothinclusiveandcompetitive. there isnoneedtopushforaparticulardriver. Optimalresultscanbeachievedwhenthedifferentactorscollaborate skills, networksandmandate. There isnoidealdriver. Eachdriverhasitsowncomparative advantage, andhence or intermediary-driven. OrganizationsthatpromoteIBMwillhavedifferentdriver entrypointsdependingontheir linked tothemarket byoneoracombinationofmaindrivers–producer-driven, buyer-driven, public sector-driven Smallholders thatproduceasurplusandtake market risksbeyondthefarmgateorlocalspotmarkets aretypically Summary notes Participants willbeableto: Outputs the advantages anddisadvantages ofeachdrivertopromoteIBM. buyer-driven, publicsector-driven orintermediary-driven. Usingaworldcafémethodology, participantswillanalyse This sessionpresentsthedriversorstartingpointsofinclusivebusinessmodels. IBMscanbeproducer-driven, Description S agricultural produce agricultural 51 53 15minutes 15.15 –15.30 53 63 1hour 15.30 –16.30 2. World café, 3tableswithcasese.g.: 1. Introductiontoentrypointsandworldcafémethodology Facilitating IBM– entry points 1½hours 15minutes 13.45 –15.15 2½hours 13.30 –13.45 13.30 –16.00 ession contributing basedonitscomparative advantage Reflect onhowinclusivebusinessmodelsrequirecollabor List theadv Inclusive Business Models: Guidelines for improving linkages between producer groups and buyers of of buyers and groups producer between linkages improving for Guidelines Models: Business Inclusive 5 antages anddisadvantages forthedifferententrypointsofinclusivebusinessmodels (Chapter2, pp. 19–23). 3. Plenarydiscussion onworldcaféresults Tea & coffee break coffee & Tea F Government-led: F Buyer armer organization-led: MacentaBananaProducersUnion acilitator-led: Elreco, Kenya -led: juiceBlueSkies, Ghana ation amongawiderange ofactors, witheachone Rice Afife, Ghana GO TO POWERPOINT PRESENTATION

27 Inclusive Business Models Module 5 Inclusive business model drivers Consideration: whileintheorytherearefourtypesofdrivers, itwillbetoomuch tohavefourtablesfor for theanalysis. new cases, make suretheyaremaximumofonepageandcontainonlythemostessentialinformationnecessary they canbeusedorifitwouldbettertodevelopothercasesmorerelevant fortheparticipants. When developing Item 1: SeePowerPoint presentation M5.Preparation: Reviewpotentialcasesin Annex 1andseewhether Preparation collaborate todevelopabusiness modelthatisbothinclusiveandcompetitive. hence thereisnoneedtopushforaparticulardriver. Optimalresultscanbeachievedwhenthedifferentactors objective istoillustrate thatthere isnoidealdriverandthateachhasitsowncomparative advantage, and strong andweak aspects of each driver. Try todraw outthe participants’ conclusionsaboutthedifferentdrivers. The Final conclusions: When alladvantages anddisadvantages ofeachdriverarelisted, askparticipantstoselectthe disadvantages foraparticularcase arebeingbroughtup, askthetablehosttocompleteinformation. to theplenarydiscussion. Therefore, askparticipantsfirsttovolunteeranswers. Whennomoreadvantages or Consideration: As allparticipantshaveparticipatedintheanalysisofcases, everyonecancontribute presentation onscreentoseelegibilityandfacilitatecomparison. Item 3: SeetemplatePowerPoint presentationtobeusedconsolidatetheresultsforeachdriver. Test tablefor See PowerPoint forexplanationofworldcafédynamics. Item 2: World Café. Divideparticipantsintothreegroups. Itiseasierifeachparticipantcallsoutanumber1-2-3. that onlythethreedriversmostrelevant fortheparticipants’dailyworkbeused. Always includeabuyer-led case. because this would mean four recaps by the host, which will take too much time. Therefore, it is recommended tm3Selectnotetaker toconsolidateresultsinplenarydiscussion Item 3 Item 2 Print copiesofcasesandtemplatefortheworldcafé(Annex2) discussions Arrange roomwiththreetablesplacedapartfromeachother so thatgroupscanhave guide thediscussion. Itispossibletodothisduringthemorningbreak Instruct thehostsontheirroleandgivethemcaseinadvance sothattheyarereadyto Arrange foranotetaker/support personineachtable participants Select threehostsfortheworldcafé. Hostsshouldabletodirectthediscussionamongvarious Select threecasestobeusedfortheworldcafé world café world , 28 Inclusive Business Models Module 5 Inclusive business model drivers 4 3 2 1 Farmers are organized into cooperatives (currently two cooperatives: balance betweenthebestofmoderntechnologyandsoundtraditional methods, whileenrichingtheenvironment. LEAF’s approachisbuiltaroundthewhole-farmprinciplesofIntegrated Farm Management, whichachievesa Fairtrade forethicalcompliance, andorganicLEAFforenvironmentalsustainability. sustainable source. The standardsitexpectsitssupplierstomeetincludeGlobalGAPforfoodsafety, SEDEXand BS workstothehighesttechnical, socialand environmentalstandardstoensureallofitsfruitcomesfroma a sanctionscheme. However, thecompanyreportsthatbreachingis not common. size, weightrange andquality, includingqualityassurance checksandtherejectionoffruits. The contract includes outgrower scheme. Producerssignaseasonalcontract (normallyasix-monthperiod). The contract specifiesthefruit To ensure a steady supply and to make sure fruits have the quality and certifications required, BS developed an standard requirements. CurrentlyBSworkswitharound150farmers. commercial enterprises, andtheirabilitytomeetexpectedyields the basisoftheiracreage(2–3hectares), theirpotentialtooperate as from large-scalefarmersandimportcompanies. BSselectsfarmerson its supplybasefromsmallholders; theremaining30percentcomes The companydoesnothaveaplantation. BSprocures70percentof 1 600 workers operating ona24-hourshift, sevendaysaweek. sold nationallyandexportedtoEurope. The presentworkforceincludes It processes18tonnes/dayoffreshfruitintojuiceandpackagedfruits contract farmingarrangement. The companyislocatedcloseto Accra. that procuresfromsmallholdersandhassuccessfullyimplementeda Blue SkiesLtd(BS)isaprivately ownedfruit-processingcompany Case 1: BLUESKIESjuices Annex 1: Potential casesforIBMdriveranalysis outgrowers andon-lendsittothematasubsidizedinterest rate. the service. Currentlyonlybanksprovidefinancialservices. OnsomeoccasionsBSborrowsthecapitalonbehalfof loyal farmers. However, duetotheinternationalfinancialcrisisandexchangedepreciation, thecompanystopped BS alsousedtoprovidecreditthroughStandardCharters, BarclaysandEcobank, providinginterest-freeloansto currently 80-85percentofthefarmersareloyal. ensured regularsuppliestothecompanyandasteadymarket fortheoutgrowers. This hasdecreasedside-selling: BS providescrates, andcollectstransports theproduct. Promptpaymentstofarmersandfairpriceshave quality andcertificationrequirementsaremet. addition to the BS technical team, within the cooperatives there are also quality assurance teams to ensure that the rainy season to prevent the fruit from getting watery and to ensurethatfarmersuse the correct fertilizers. In technology. The technicalteamisalsoresponsibleforqualityassurance. For instance, itcloselymonitorsduring farming practices. Periodically, trainings arealsoorganizedontopicssuchasaccounting, hygiene, soilfertilityand BS setupatechnicalteamwhichisresponsible for training farmers, incoordinationwiththecooperatives, ongood outgrowers, particularlywhenapricemodificationisdeemednecessary. to bepurchased. The priceissetyearlybyBSalthoughitnegotiatedwiththecooperatives representing the Cooperative). Oneofthemaintaskscooperatives istoprovideassistanceincontract negotiationandamount husbandry, energyefficiency, water management, natureconservation andcommunityengagement. The LEAFstandardfocusesonsoilmanagement andfertility, crophealthandprotection, pollutioncontrol, animal .leafuk.org/resources/001/220/618/Global_Impacts_Report_2016_Web.pdf .leafuk.org/leaf/about.eb .blueskies.com/farmers .fao.org/3/a-i3404e.pdf http://www http://www http://www http://www 1 –Privatesector-driven Fotobi Cooperative and 2 Bisease Amanfro Bisease 4 3

©FAO/Ezequiel Becerra 29 Inclusive Business Models Module 5 Inclusive business model drivers capacity toincreaseproduction. fruits (5-10percent), limitedproductionskills, theburdenofcertificationcosts, seasonalshortageof inputs, and BS’s profitablebusinessmodelstillhasroomtoimprove. The mainconstraints foroutgrowersaretherejectionof The BSjuicesareasuccessfulproductthatishighlyappreciatedbyconsumersforitsfreshnessandquality. However, 30 Inclusive Business Models Module 5 Inclusive business model drivers 5 on credit. has also made credit arrangements with local stores for farmersto obtain dairymeal, drugs, seeds and fertilizers The bankchecksthecooperative’s recordsfordeliveriesfromthefarmerswhoapplyloan. The cooperative (lower thanthecommercialrate). The cooperative providesthecontract withBooksideDairiesasabankguarantee. banks. Onebankhasdevelopedatailor-made creditfacilityfordairyfarmerswith12–13percentinterestayear The cooperative hasmadearrangements withfinancialinstitutions. Memberscanaccessloansfromcommercial management. the animals’health. With supportfromElreco, thecooperative hasalsoorganizedtrainings forfarmersondairy before pouring the milkintoacommon container. Additionally, anextensionworker toursthefarmstocheck weighs andchecksthequalityofmilkatcollectionpoints. Italsochecksforpossiblediseaseandadulteration The cooperative introducedstandard measures forthemilkandkeeps recordsoftheamountsboughtandsold. It also givecashadvances inspecialcircumstances. and administrative expenses. The cooperative paysfarmerspromptlyattheendofeachmonth. The cooperative can Brookside Dairies pays KSH 16 per litre of milk to the cooperative, which deducts KSH 2.70to cover for transportation to theprocessor. deliver theirmilktothecollectionpoints, andthecooperative arranges foravehicletopickupthemilkandtake it With asecurebuyer, thecooperative arranged sevencollectionpointsaroundthevillagesinChepkorio. Farmers product. They negotiatedacontract tosupply5 000litresofmilkperdayandsetafloorprice. With supportfromElreco, thecooperative identifiedamilkprocessorBrooksideDairiesinterestedinbuyingits the cooperative. andelectacommitteeofninepeoplethatmanages KSH 100 residing inthearea. Memberspayamembershipfeeof marketing ofmilk. Membershipisrestrictedtodairyfarmers Society. The objectiveofthecooperative istoorganizethe 16 self-help groupstoformtheKong’s Asis Farmers’ Cooperative As aresultofthestudy, Elrecomobilized400farmersfrom that therewerebuyersinterestedinpurchasingmilk. power andorganizationtoefficientlymarket theirproductand (a district in the region). It found that farmers lacked bargaining 2006 Elreco studied the milk marketing situation in Chepkorio region inKenya. As partofaneconomiclivelihoodsproject, in organization workingwithcommunitiesintheNorthRift Eldoret Christian Community Services (Elreco) is a development Case 2: ELRECODAIRY FARMERS al Tropical Institute)&IIRR(InternationalInstitute ofRural Reconstruction). 2008. KIT (Roy farmers and traders in Africa in traders and farmers . 5 –Facilitator-driven Trading up: Building cooperation between between cooperation Building up: Trading

©FAO/Simon Maina 31 Inclusive Business Models Module 5 Inclusive business model drivers 6 and leadstoconflicts; theprojectwouldbenefitfromregisteringandmappingoutland. lowers the quality of the rice and increases production costs for farmers. Also, the use of the land is not transparent The smallfarmsizesanddifficultiesinaccessingtractor-hiring services make the rate ofmechanizationlow, which maintenance, thefarmersshouldpayhigherirrigationandlandrentalfees. farms. Newexternalfundingfortherehabilitationofdamswas needed. To beabletokeep therequired level of By 2010, thetwodamsweresiltedandone ofthedamshadtobeclosed. This limitedthewater supplytothe The mainchallengesoftheprojectarewith the maintenanceofinfrastructure andthesmallsizeoffarms. any facilitationroleinmarketing. still themainbuyersofricefrom Afife, butaccordingtoaninterviewwithGIDAstaffin2013, GIDAnolongerhad Remma fordeliveryofthenowfamous Afife naturally perfumedrice. By2009, CCTVandtheHouseofRemmawere company at the beginning of the planting season. In November 2007, CCTV signed a contract with the House of Remma, whichpaidbackthebank. The priceofpaddywas agreedbetweenthecooperatives andtheprocessing loans fromthe Agricultural DevelopmentBankhadtodelivertheequivalent intermsofpaddytotheHouse Remma, aprocessingandmarketing company. They developedanarrangement inwhichfarmerswhoreceived marketing problemswereaddressedwhen GIDA facilitatedalinkagebetweenthecooperatives andHouseof Originally, GIDAand the cooperatives werenotinvolvedinmarketing activities. Howeverin2001, farmers’ average yieldof4 tonnesperhectare (perseason). farmers. GIDA does not provide any support in terms of seed supply. Farmers cultivate rice twice a year with an The GIDAauthorityprovidesextensionand somefertilizersatasubsidizedprice, whicharepaidonthespotby they maybeintroducedinthefuture(similartootherirrigationschemes). which isbarelysufficienttomaintaintheirrigationscheme. Landfeeshaveneverbeenpaidbyfarmers, although management systemwithGIDA. The perhectareseason, farmerspayanirrigationservicechargeofGHS 100 The farmers’cooperative isresponsiblefortheoperations andmaintenanceoftheirrigationschemeunderajoint GIDA management. 1996. The society’s steeringcommittee ismadeupoftworepresentativesfromeachcooperative, togetherwith training. The umbrella Afife Rice-Vegetable IrrigationCooperative Farmers andMarketing Society was formedin the Department of Cooperatives provided the farmers with The farmerswereorganizedincooperatives byGIDA, and agreement withGIDA. hectares each. The farmershaveafive-yearrenewable tenant increased to1 024 farmerswhocultivate between0.4and1.8 In itsearlierstagestherewerearound800farmers, butthishas two dams. servedby Region andcoversanirrigatedareaof880 hectares schemes, the Afife Rice Irrigation Project, is located in the Volta acquired inthepastfromlocalcommunities. Oneofthose around 50publicirrigationschemesongovernmentland The GhanaIrrigationDevelopment Authority (GIDA)manages Case 3: AFIFE RICE .fao.org/3/a-y5785e.pdf –http://www.fao.org/3/a-i3404e.pdf http://www 6 –Government-driven

©FAO/Hoang Dinh Nam 32 Inclusive Business Models Module 5 Inclusive business model drivers 7 outlets thatarenotabletopaycash. in reservetosellatalaterdate. Finally, thereislimitedfinancialcapacitytodeliverproductsalternativemarket tension andimpedingfairnegotiations. Also, MBPUlacksastockingareaorventilatedwarehouse tokeep products remain. Currently the main problems relate to buyers in Conakry who refuse to use the weighing system, creating one time, reducingtransportation costsastwo to three truckscanbefilledatasinglepoint. However, issuesstill this hasreducedconflictsinpricenegotiationandvolatility. Also, traders canbuylargequantitiesat sales average tonnesofbananas. closeto7 000 Traders alsobenefitfromnegotiatingwithonlyoneorganization; Producers havebenefitedfromthemarketing system, withhigherpricesandlargervolumesofsales. MBPU’s yearly to volumedelivered. At thetimeofpayment, 1 FG/kgisdeductedbytheweighingstationonbehalfofgroup. transported toConakry. Traders paycashtothegroupleader, whodistributespaymentamongproducersaccording be supplied. At the station, bananasarecontrolledformaturityandsize, weighedandloadedontotruckstobe according to the urgency of their financial needs. On theagreeddate, traders inspect thevolumescheduledto ordered amongitsgroupmemberswhosebananasaremature, basedoneachmember’s productioncapacityand Traders contacttheweighingstationdirectlytoagreeonloadingdate. The stationdistributesthequantity volume. Traders payaharvestticket of1 FG/kgthatindicatestheassignedweighingstation. AABM, come to MBPU’s headquarters to meet with theharvest programming commission to indicate the purchase union whenproducersareabouttoharvestsothattheircropcanbeprogrammed forsale. Every Thursday, traders of station, eachmanagedbyaleaderselectedtheproducergroups. The weighingstationmanagerinformsthe The marketing systemincludesaharvestprogramming commissionandweighingstations. There are55weighing conditions andtransportation costs(twoorthreetimesperyear). and AABM representativesmeettonegotiate afixedpricethatcanbeperiodicallyreviseddependingonmarket Macenta inwhichthereispricenegotiationandasalesscheduleagreedbetweenproducerstraders. MBOU marketing systemhasresultedinakindofregularminicommoditiesexchangeforthemarketing ofbananasfrom After manytrialsanderrors, theMBUworkstogetherwith AABM toestablishaneffectivemarketing system. The Association (AABM). organization ofproducerspromptedtraders toalsoworktogetherandestablishtheMacentaBananaMerchants located nearby. The totalnumberofproducersrepresented bytheunionis2 750 (1 938 menand612women). Self- all theproducergroups. The unionrepresents129producergroups, includingbetween10and40farmerswhoare marketing ofbananas. In2001, theMacentaBananaProducersUnion(MBPU)was officiallycreatedtorepresent In 1995, thefirstinformalgroupswerecreated. The objective ofthegroups was todevelopasystemfacilitatethe begin toworktogetherincreasetheirbargainingpowerandfacilitatetheflowofproductsmarket. village whoonlypurchasedbytheheapinsmallquantitiesathighlyvariable prices. This promptedproducersto cultivation. Mostsmallfarmersproducedtheirbananasinisolation, sellingtocollectorstravelling fromvillageto Macenta is located in the forest region of Guinea-Conakry, where climatic conditions are favourable for banana Case 4: MacentaBananaProducers Union he Commercialization Experience oftheMacentaBananaProducersUnion (MBPU). T 7 –Producer-driven 33 Inclusive Business Models Module 5 Inclusive business model drivers Annex 2: Template forconsolidationof World Caféresults opttv oenetdie + rvt etrdie - aiiao-rvn()Producer-driven (+) Facilitator-driven (+) Private sector-driven (-) Government-driven(+) Competitive Producer-driven (+) Facilitator-driven (+) Private sector-driven (-) Government-driven(+) Inclusive competitiveness for Disadvantages competitiveness for Advantages inclusiveness for Disadvantages inclusiveness for Advantages

34 Inclusive Business Models Module 5 Inclusive business model drivers Annex 3: Reference World Caféresults nlsv oenetdie + rvt etrdie - aiiao-rvn()Producer-driven (+) Facilitator-driven (+) Private sector-driven (-) Government-driven(+) Inclusive inclusiveness for Advantages inclusiveness for Disadvantages • • • • • • • • • • • programme. smallholders tothe therefore attract more a subsidizedprice, Can offerservicesat number ofbeneficiaries. Can includelarge smart agriculture. management /climate- environmental for responsible incentives andpolicy Can support policy. Ability toinfluence (extension officers). building offarmers Support forcapacity as land. valuable resourcessuch Can facilitateaccessto committee). actors throughsteering the consultationof decision making(with Transparency in actors (buyers). over theroleofother Government canstep farmers. capable-commercial participation ofmost Can discourage to conflict. land use, whichleads No transparency for Only onebuyer. • • • • • • • • Access totransport. (business security). Signing ofcontracts rates forfarmers. banks, withnointerest Access toloansthrough farmers. Capacity buildingof smallholders. supply raw materialby outgrower schemeto Development of resolve conflicts. better termsand farmers tonegotiate be anymechanismsfor There don’tappearto interests. represent alloftheir who mightnot through leadfarmers Smallholders linked than 2hectares). (only farmerswithmore part ofthescheme farmers whocanbe Limits tothetypeof • • • • • • building forfarmers. Support capacity transportation. as loansand services such farmers toaccess NGO supports negotiation). network (contract manage the committee to Democratic form acooperative. Mobilize farmersto outlet, oneproduct. Only onemarket specific area. farmers residingina restricted tomilk Membership • • • • • one group. are organizedin association) who members ofthe (merchants, Variety ofbuyers traders. producers, butalso the modelnotonly Work toincludein groups. initially jointhe Any producercan products. willing toweight merchants not agreements; to enforce Lack ofmechanisms institutions). (e.g. financial with otheractors partnerships Doesn’t include 35 Inclusive Business Models Module 5 Inclusive business model drivers opttv oenetdie + rvt etrdie - aiiao-rvn()Producer-driven (+) Facilitator-driven (+) Private sector-driven (-) Government-driven(+) Competitive competitiveness for Advantages competitiveness for Disadvantages • • • • • • • • • contact withbuyer. Facilitation ofinitial result ofirrigation. intensification asa Production cost. they havereduced competitive because – makes farmers Provision ofsubsidy competitiveness. scheme toincrease land forirrigation Availability of Political interference. fee byfarmers. Non-payment ofland area ofland. of farmersonlimited Increasing number maintenance. cost ofirrigation money tocoverthe Not enough culture of “free” stuff. distortions andcreates creates market Provision ofsubsidy • • • • • • • • • to markets. products givesaccess Certification of Skies). farmers tosellBlue Price incentive(attract negotiations. Flexibility incontract Quality ofproducts. expansion. Opportunity for delivery ofservices. Efficient andeffective high riskforcompany. Interest-free loansare process. Burden ofcertification taxes). shocks (inflation, high Exposure toexternal • • • • • • • • • • Advance payments. (member fee). contribution Member by buyer. Prompt payments negotiations. Contract prevent spoilage. Collection pointsto of qualitychecks. products asaresult High-quality activities. perform certain rely onNGOto Cooperative can (donors). financial support Rely onexternal business model. to supportthe limited time Facilitator has product only. specializing inone High riskof • • • • • • • • • transportation. delivery and product of harvesting, organization Efficient sustainable. makes system operational costs fees tocover Payment of volumes. Increased sales fair price. products topay Weighing of traders. producers and profitable forboth System is association. and merchant organization between producer Price negotiations buyers inConakry. mechanisms with of weighing enforcement Lack of profits. later datecanlimit products andsella facilities tostore Lack ofstorage advance payments. requirement of clients duetothe engage withother Limited abilityto 36 Inclusive Business Models Module 5 Inclusive business model drivers IBM approach – A methodologyforimplementation Timing FAO. 2015. Reference material and evolvingprogressconstraints. process isbasicandflexibletoallowforadaptationlocalcontexts, commoditycharacteristics, market structures business modelsaswellthelinkagesbetweenmodels. The IBMapproachismadeupoffoursteps. The The IBMapproachisamethodologyfordesigning andimplementinginterventionsthatimprovesmallactors’ addressing theindividualneedsorconcernsofeitheractorinisolation. a focusonimprovingcompetitivenessthroughwin-winsolutionsforthesmallholder-to-buyer linkage, rather than context- andcommodity-specificsolutionstolocalmarket obstacles. Acornerstoneoftheapproachistomaintain The IBMapproachhasadaptedbusinesstools tofacilitateunderstandingofinter-business linkagesandtoidentify in thechain–itispossibletoimprovecompetitivenessofwholechain. linkage inthechain. Byfocusingontherelationship betweenproducersandtheirfirstbuyer–oftentheweakest link The IBMapproachcomplementsvalue-chain thinkingwithaspecificemphasisandlensontheproducer-to-first-buyer Summary notes Participants willbeableto: Outputs and measuringprogress. understanding thebusinessmodel, identifyingcommonupgrading priorities, developingaplanforupgrading, The sessiondescribestherationale behindtheIBMapproachandfourbasicstepsforimplementingit: implementation ofinterventionsthatstrengthenmarket linkagesbetweensmall-scaleproducersandbuyers. This sessionintroducestheIBMapproach, whichhasbeendevelopedbyFAO tosupportthedesignand Description Se agricultural produce agricultural 70 73 0mnts2. Preparatorywork forgroupformationand caseselectionfor BM 1. Presentationonimplementationsteps 30minutes Implementingthe IBMapproach 30minutes 17.00 –17.30 30minutes 16.30 –17.00 16.30 –17.30 ssio Identify abusinesscaseforimplementingtheIBMapproach List thestepsforimplementingIBMapproach Understand ther n 6 Inclusive Business Models: Guidelines for improving linkages between producer groups and buyers of of buyers and groups producer between linkages improving for Guidelines Models: Business Inclusive (Chapter4, pp. 29–34). ationale ofFAO’s IBMapproach analysis thenextday GO TO POWERPOINT PRESENTATION 37 Inclusive Business Models Module 6 IBM approach – A methodology for implementation expected withtheimplementationofeachsteps. case (usedinModule5–IBMdrivers). The objectiveisforthefacilitatortoprovidepractical guidanceonwhatis Consideration: IntheModulesonIBMimplementation(6-9), thePowerPoint presentationsincludetheBlueSkies in practical terms. during thenextdays. The exerciseonthe offertothemarket istogetparticipantsstartthinkingaboutthecase to workonimplementtheIBMapproach. Inthisway, itispossibletogostraight tothedetailsofeachcase E couple ofproblems; otherwiseparticipantscannotlearnfromit. discussing withparticipantsthechoiceofcasetoanalyse, itshouldbemadeclearthat thecaseshouldhavea light thantheactualsituationmaybeforfearofbeingcriticizednothavingdoneagoodjob. Therefore, when business casethattheyareactuallyworkingwith. However, participantstendtowant topresentthatcaseinbetter they know, inordertoavoidparticipantsanalysingwholesectors. Itmaybemostusefulforthemtoanalysea Item 2: See slide on group formation. Itisimportantthatgroupsareassignedaconcretebusinesscase theory intopractice andlearnbydoing. groups toworkonreal-lifecaseswithwhichtheyarefamiliar. Inthisway, participantscanimmediatelyputthe Modules 6to9gointodetailonthestepsforimplementingFAO’s IBMapproach. Participants willbedividedinto they canuseintheirwork. academic analysisofcases, itisimportantthatparticipantsseethetraining willleadtopractical approaches Item 1: SeePowerPoint M6. After twodaysofgettingacquaintedwiththenewconceptanddoingsomerather Preparation Item 2 ven ifonlyforashortperiodoftime, itisbeneficialtogetparticipantsthinkaboutthecasetheyaregoing to askparticipantssuggestcases represent situationsthatparticipantsareworkingwithintheirprojects. Itisalsopossible Select casesforgroupworkontheimplementationofIBMapproach. Casesshould 38 Inclusive Business Models Module 6 IBM approach – A methodology for implementation Business modelanalysis CIAT. 2012. Timing FAO. 2015. Reference material should beareflectionofthebusinessrealityonground, notadesiredoridealsituation. description, operational capacityandclients. Inordertoidentifyareasofimprovement, thebusinessmodelanalysis business modelsaresimilarlyanalysedtounderstandtheirmanagementstructure, resources, capacities, product capacities, suppliersandbuyers, commoditycharacteristics andmarketable surplusesofmembers. The buyers’ The analysislooksfirstatthefarmers’groups tounderstandtheirorganizationalstructure, members, resources, Strengthening businessmodelsbeginswithanappraisal ofhowtargetfarmersandbuyersaredoingbusiness. Summary notes Participants willbeableto: Outputs The facilitatorcanchoosewhichtooltousebasedonwouldbemoreusefulandeasyfortheparticipants. Option 2: BusinessModelCanvas Option 1: FAO checklist To performabusinessmodelanalysis, twotoolsareincluded: are doingbusiness. This sectionwillprovidepractical toolsforanalysingabusinessmodel. identify opportunitiesforimprovement, itisimportanttoclearlyunderstandthecurrentsituationandhowactors This sessiongoesindetailonthefirststepofIBMapproach–understandingbusinessmodel. Inorderto Description Se agricultural produce agricultural #2: The BusinessModelCanvas, pp. 37–60). 93 00 0mnts2. Inplenaryapply thechecklist/canvas toone ofthepreviously 15minutes 10.00 –10.15 30minutes 09.30 –10.00 03 20 or 4. Groupwork: apply thebusinessmodelanalysis toaknown 3. Explaingroup work 1½hours 15minutes 10.30 –12.00 10.15 –10.30 1. Presentationonbusinessmodelanalysis: Business modelanalysis 30minutes 2hours 09.00 –09.30 09.00 –11.00 ssion P List thedifferentbusinessmodelcomponents erform ageneral businessmodelanalysis Inclusive Business Models: Guidelines for improving linkages between producer groups and buyers of of buyers and groups producer between linkages improving for Guidelines Models: Business Inclusive LINK methodology: A participatory guide to business models that link smallholders to markets to smallholders link that models business to guide participatory A methodology: LINK 7A (Chapter4, pp. 29–31). discussed cases business case (4 groups) Tea & coffee break coffee & Tea Business modelcanv F AO checklist as GO TO POWERPOINT PRESENTATION (Key tool 39 Inclusive Business Models Module 7 Step 1: Understanding the business model and thatthegroupstickstorealitywhenformulatinganswers. ask theappropriatequestions. The facilitator shouldtake carethatthegroupanalysesabusinessandnotsector Item 4: There needstobeapermanentfacilitatorat eachtabletoguidethediscussionandleadparticipants assumptions, butalways whileconsideringthecurrentsituation. the training, informationwillbelimitedparticipants’familiaritywiththechosencase. Itispossibletomake small managers, suppliers, buyersandotheractorsinthechain. Sinceitisnotpossibletoperforminterviewsduring real, theanalysiswillgomuchdeeperand notbelimitedtodeskworkbutwillinvolveinterviewswithcompany actual situation, not of how it should be in an ideal version. Item 3: Giveveryclearinstructionstothegroups. Remindthemthatthebusinessappraisal isananalysisofthe Consideration (whenusingOption1FAO checklist): for abusinessmodelanalysisoftheBlueSkiescase. concrete examplessothatparticipantscangetapractical ideaofwhatabusinessmodelappraisal is. See Annex 3 the previously discussed cases in plenarywiththeparticipants. As yougothrough each ofthecomponents, provide Item 2: To allowtheparticipantstointernalizebusinessmodelcomponentsand/orcanvas, andanalyseoneof Templates foranalysis: See Annex 1fortheBMcomponentstemplate. See Annex 2forthecanvas template. Depending ontheobjectiveofworkshop, options1and2mayalsobecombined. Item 1: Option1FAO checklist: SeePowerPoint M7a Preparation Prepareaflipchartorlargepapergluedtothe wall withthetemplatechosenforbusiness Printtemplatesofthetoolforgroupwork. Selectwhichtooltouse: FAO checklistorBMcanvas. 3 2 1 T T It isnecessarytoanalysetheactivitiesandresourcesofbothproducersbuyers he Suppliers/Partners refertothoseactorsthatfacilitatethedeliveryofproducts fromproducerstobuyers. he logisticsmechanismsrefertohowproductsaredeliveredfromproducersbuyers. Option 2BMcanvas: model analysis. SeePowerPoint M7b E xplain that when doing abusiness model analysis for . 40 Inclusive Business Models Module 7 Step 1: Understanding the business model Annex 1: Template forbusinessmodelcomponentanalysis 4.2.1 4.2 4.1 4. Key activities 2.1 1.4 1.1 1. Product 4.2.2 4.1.2 4.1.1 3.4 3.3 3.2 3.1 3. 2.5 2.4 2.3 2.2 2. 1.5 1.3 1.2 Producers Buyers

organizational mechanisms)? Who dotheyselltheproductto(finalclients)? smallholders? Why aretheyinterestedinprocuringfrom What amountofproductdotheybuy? supermarkets, hotels, exporters? Who buystheproducts: Is landownedorrented? What isthesizeoflandtogrowcrops? Where aretheylocated? women? Who aretheproducers: How arethefarmersorganized? How areproductspackaged? What volumesaretraded? aggregated, How aresalesperformed(individual/ that differentiatethem? Do theyhaveanyspecialcharacteristics What productsaresold?

Buyer control) processing, marketing, payment, quality to farmers/producerorganization? What typesofservicesdobuyersoffer income forthebuyer? What aretheactivitiesthatgenerate provide toproducers/buyers?(e What servicesdoestheproducergroup producer organization? What activitiesgenerateincomeforthe Producer Group formal/informalcontracts, menand/or traders, wholesalers, .g. Business ModelComponents

41 Inclusive Business Models Module 7 Step 1: Understanding the business model 8.4 8.3 8.2 8.1 8. 7.2 7.1 7. Suppliers andpartners 6.4 6.3 6.2 6.1 6. Logistics 5.2.2 5.2.1 5.2 5.1.2 5.1.1 5.1 5. Resources 7.3 Costandrevenue

costs? Is thepricefairaccordingtoproduction and buyers? How stablearesalesbetweenproducers How doesthebuyerpay? What arethepricingmechanisms? How istherelationshipwithpartners? the BM(financialinstitutions Are thereanyindirectpartnersthatsupport seeds)? What servicesdotheyprovide? of theBMtransporters, suppliers(inputs, Who arethedirectpartnersthatmak F Where areproductsstored? How areproductstransportedtobuyers? farmers? How areproductscollectedfromthe centers, NGOs, publicorganizations)?

or howlongproductscanbestored? perform activities? processing, logistics)neededbybuyersto What istheknowledge(production, to performactivities? equipment, technology)neededbybuyers What istheinfrastructure(machinery Resources –Buyers activities? processing, logistics)neededtoperform What istheknowledge(production, activities? the producerorganizationtoperform equipment, technology)neededby What istheinfrastructure(machinery Resources –Producers , research e part

, , 42 Inclusive Business Models Module 7 Step 1: Understanding the business model * Adapted from: Osterwalder&Pigneur, 2010inCIAT, 2012. Annex 2: Businessmodelcanvastemplate activities? P Suppliers? Who? E E V Fixed costs Partners artners’ conomies ofscope conomies ofscale ariable costs Cost structure for them? Who isresponsible What? allocated? How arethey Are theyav What isneeded? K Key activities ey resources ailable? V the productsolves? What istheproblem buy it? Why docustomers What istheproduct? alue proposition How stableistheincome? How docustomerspay What isthesellingpriceandhowitdetermined? payment? Customer r Are theremorew customer? the producerto How productsgetfrom T with customers? How iscommunication ype ofrelationship? , andhowlongdoesittake toreceivethe Revenue steam Channels * elationships ays? Who ispaying? customers? Who arethe F created? or whomisvalue Customers 43 Inclusive Business Models Module 7 Step 1: Understanding the business model Annex 3: ExamplebusinessmodelanalysisforBlueskiescase 2.5 2.4 2.1 2. Producers 1.5 1.2 1.1 1. Product 4.1.2 4.1.1 4.1 4. Key activities 3.4 3.3 3.2 3.1 3. 2.3 2.2 1.4 1.3 Buyers

Who dotheyselltheproductto(finalclients)? smallholders? Why aretheyinterestedinprocuringfrom What amountofproductdotheybuy? supermarkets, hotels, exporters? Who buystheproducts: Is landownedorrented? What isthesizeoflandtogrowcrops? Where aretheylocated? women? Who aretheproducers: How arethefarmersorganized? How areproductspackaged? What volumesaretraded? organizational mechanisms)? aggregated, How aresalesperformed(individual/ that differentiatethem? Do theyhaveanyspecialcharacteristics What productsaresold?

control) processing, marketing, payment, quality provide toproducers/buyers? (e What servicesdoestheproducer group producer organization? What activitiesgenerateincomeforthe Producer Group formal/informalcontracts, menand/or traders, wholesalers, .g. Business ModelComponents

National andexportmarket (Europe). expected yieldsandstandardrequirements. as commercialenterprisesandtheirpotentialtomeet W Lack ofownplantation. large farmersandimportcompanies. 18 tonnes/day 24-hour shift, 7daysaweek. Company has1 600staffmembersandoperatesona that sellsnaturalfruitjuices. Blue skies. Privately ownedagro-processingcompany No information. 2–3 hectares Close No information. producers inyearlypricenegotiations. F F smallholders Around 12tonnes/day(70%of18tonnes)from Contract includesasanctionscheme. size, weightrangeandquality. Seasonal contract(normally6months)specifiesthefruit sales areperformedcollectively. Farmers areorganizedinanoutgrowerschemeand standards. Certifications: GlobalGAP, fairtradestandards, ethical assurance checks. Agreed size, weightrangeandcriteriaforquality F Support toensurequalityand certificationrequirements. Supports BStechnicalteam with trainingtofarmers. Training toincreasefarmerskills. Support withqualitycontrol. cooperative No informationonhowthisgeneratesincomeforthe (price andquantity). Cooperative supportsfarmersincontractnegotiation armers areorganizedinacooperativethatrepresents ruits aredeliveredincratestoBS. ruits fortheproductionofjuices orks withfarmersbasedontheirabilitytooperate to Accra. . . . . 70%fromsmallholdersand30% 44 Inclusive Business Models Module 7 Step 1: Understanding the business model 7.2 6.4 6.3 6.2 6.1 6. Logistics 5.2.2 5.2.1 5.2 5.1.2 5.1.1 5.1 5. Resources 4.2.2 4.2.1 4.2 7.3 7.1 7. Suppliers andpartners

How istherelationshipwithpartners? the BM(financialinstitutions Are thereanyindirectpartnersthatsupport seeds)? What servicesdotheyprovide? of theBMtransporters, suppliers(inputs, Who arethedirectpartnersthatmak F Where areproductsstored? How areproductstransportedtobuyers? How areproductscollectedfromthefarmers? centers, NGOs, publicorganizations)?

, ,

No information. Provide interest-freeloanstofarmers. Barclays andEcobank). Banks andfinancialinstitutions(StandardCharters, directly toBlueSkies Products arecollectedfromfarmsandtransported Blue Skiesprovidescrates No informationondetailsoflogistics products. Certification schemerequirements. Financing. Production techniques. Machines toprocessfruit. Trucks totransportproducts. schemes. Knowledge onproductiontechniquesandcertification involved inmarketing. Farmers deliverproductdirectly. Cooperativenot No information. Occasional loanstofarmersatsubsidizedinterestrate. Provides crates, collectsandtransportstheproduct Monitors qualityassurance. and technology. Sporadic trainingsonaccounting, hygiene, soilfertility Interactive technicaladviceoninputs. Training ingoodproductionpractices. local andexportmark Processing offruitsintopackagesandtosellin No information. be short. No information, butsincerelatedtofreshfruitsshould . et. , andcollects andtransports . 45 Inclusive Business Models Module 7 Step 1: Understanding the business model 8.4 8.3 8.2 8.1 8. Costandrevenue

costs? Is thepricefairaccordingtoproduction and buyers? How stablearesalesbetweenproducers How doesthebuyerpay? What arethepricingmechanisms? No information. Prompt payments Sanctions schemetoavoidside-selling. outgrowers Price issetbyBSalthoughitnegotiatedwiththe Seasonal contract(6months). . . 46 Inclusive Business Models Module 7 Step 1: Understanding the business model Visit toamarket oranagribusiness the visityouareorganizingandaskthemifparticipants mayinterviewthem. Visit themarket to note whichproductsareforsale. Informimportantactors(e.g. thewholesalers, themanager)of If itisaperiodicmarket, make sureyouknowthemarket dayandorganizethesessiononthatday. Market Preparation Timing Participants willbeableto: Outputs Option 2: Visit anagribusiness Option 1: Visit amarket time, budgetandlocalcontext, itcouldbepossibleto: in whichtheyhavetointeract withdiverseactorsandinformationisgenerally incomplete. Dependingonavailable The objectiveofthissessionistoallowparticipantspractice thebusinessmodelanalysisinareal-lifesituation Description Se Prepareand print templatesforparticipants. Arrangetransportation. Alertrelevant peopleofvisitandobjective. 4 Arrangevisit tomarket oragribusiness. A weekbeforethissession, youwillneedtolocatea 3 2 5. Plenaryanalysisofgroupworkresult 1 3. Actual visitwithgroupwork 50minutes 40minutes 16.10 –17.00 1. Preparationsduringplenary 30minutes 15.30 –16.10 Option1: Visit toamarket 40minutes 14.00 –15.30 20minutes 13.20 –14.00 13.00 –13.20 3hours 13.00 –16.00 ssion Connect tr Apply conceptsandtoolslearnedduringthetr 7B market orasupermarket orcontact an agribusinessneartowherethetrainingisbeingheld. aining theorytoarealbusinesssituation. 4. Transportback 2. Transport Option 2: Visit toanagribusiness aining. 47 Inclusive Business Models Module 7 Step 1: Understanding the business model Item 4: Item 3: Visit themarket Item 2: The time schedule for this session needs to be finalized based on travel time from the venue to the visit site. Item 1: Preparation withtheparticipantsduringplenary Objective: performabusinessmodelanalysisforspecificproduct. Option 1: Visit toamarket Review thequestionsforgroupworkin Annex 4. E manager). Organize shortmeetingswithkey actors(general manager, financialmanager, salesmanager, procurement If possible, arrange atourofthecompany. Company xplain objectiveofvisit. vi. ii. i. v. iv. i. v. iv. iii. i. ii. vi. iii. ii.

Discussionafterthemarket visit group 2onionsandgari, group3gariandcabbage, group4cabbageandsweetpotato). It isbetterifthegroupshaveonlyoneproductincommon. (For example, group1hasriceandonions, product iscoveredbyatleasttwosmallgroups. This willpromotegreaterlearningaftervisitingthemarket. If thereistime Discuss thedifferencesinanswersforproducts–why arethesalesorganizeddifferently? When finishedwithoneproduct, E learned. Choose oneoftheproductsandasktwogroupsthatstudiedproducttosharewhattheyhave After visitingthemark Check onthemasrequired. If necessary the sellersorbuyers. by lookingcarefullyattheproductandwhatisgoingon. For otherquestionstheywillneedtotalkwith E Give eachgrouptwoprintoutsofthetemplate(see Ask eachgrouptochoosetwoproductsinvestigateatthemark Organize theparticipantsintosmallgroupsoftwoorthree Provide logisticaldetails(tr Provide gener other groupsandcompletelydifferent(e.g. onestaplewithalongshelflifeandfresh). small details. The aimistogetapictureofhowthemarket works. ask themtowritetheirproductsontop. xplain that they have to answer all the questions for the two products. Somequestionscan be answered ncourage thosewhodidnotresearch theproducttoaskquestions, butdonotspendtoomuchtimeon Someonecantypetheanswersintemplateonscreen. , helptheparticipantstogetstarted. al informationonthemarket. , discussmoreproducts. et, asktheparticipantstoreturntheirsmall groups. ansport, schedule, anyrules, safetyprocedures). choosethenextproducttodiscuss. This shouldbeonecoveredbytwo Annex 4–atemplatebasedontheBMchecklist)and . et. The ideaistoensurethat each 48 Inclusive Business Models Module 7 Step 1: Understanding the business model Preparation withtheparticipantsduringplenary Objective: performageneral businessmodelanalysisoftheagribusinesscompany. Option 2: Visit toanagribusinesscompany vi. v. i. iv. iii. ii.

Objective istoperformaBusinessModelanalysisusingtheguidelinequestionsinchecklist. participants’ questions Creating groupscouldbetoodifficultastherearealimitednumberofcompanyresourcestoanswer Depending onsetting, P Provide logisticaldetails(tr Provide gener articipants shouldfillinformationbasedonwhattheyobserveduringtheagribusinesstour. al informationonthecompany. itcouldbepossibletoaskmoredetailedquestions. . Bettertoworkindividually. ansport, schedule, anyrules, safetyprocedures, etc.). 49 Inclusive Business Models Module 7 Step 1: Understanding the business model Annex 4: Potential templatetouseformarket visit 6.4 6.3 6.2 6.1 6. Logistics 4.1 4. 3 3.1 3. 2.3 2.2 2.1 2. 1.3 1.2 1.1 1. Product Questions P 5.1 5. Resources 3.2 1.4 .4 rod Key activities Buyers/Customers Producers/Suppliers

lost/ w What istheaveragepercentage ofvolume What istheshelflifeofproduct? handles it? How istheproducthandledandwho market? How istheproducttransportedto (e.g. refrigeration, storagebins)? Any resourcesneededtomaintainproduct Any activitiestomaintaintheproduct customer buyperday? What amountofproductdoesanaverage customers? What aretheselectioncriteriaof Who arethemainbuyersofproducts? or collectively? How aretheyorganized?Salesindividually Where aresupplierslocated? farmers Who arethesuppliers(small-medium-large What happenstoproductsthatarenotsold? product? Doesitchangeovertime? What isthephysicalconditionof What kindofpackagingisused, characteristics (e Does theproducthaveanyspecial (storage, transportation)? Are theredifferenttypesofbuyers? How? Why? u ct asted duringlogistics? , traders, etc.)? .g. colour, size, ripeness)? ifany?

the participantshaveinterviewed Observations andanswer s from key people 50 Inclusive Business Models Module 7 Step 1: Understanding the business model 8.5 8.4 8.3 8.2 8.1 8. 7.2 7.1 7. Partners Pricingandrevenue

discounts? Are thereanyvolumeorrepetitivecustomer money handled? How areproductspaidfor?isthe periods? How stablearesales? How arepricesdetermined? What isthetotalvolumesoldperday? What servicesdopartnersprovide? Or producers? Any actorsupportingthemark Any high/low et? 51 Inclusive Business Models Module 7 Step 1: Understanding the business model

BM tools: SWOT, Ansoff MatrixandPorters’ FiveForces and thatfitwithintheoverall training programme. many newconceptsandtools. Choosetheonesthataremostlikely going to beofusethemintheirdailywork and pets)theBusinessMotivation Model. However, itisimportantnottooverload theparticipantswithtoo here. OthertoolsincludetheBoston ConsultingGroupMatrix(productportfolio: stars, questionsmarks, cashcows Consideration: When preparing the training, youmayuse other toolsin addition toorinsteadofthe tools listed Preparation Timing Participants willbeableto: Outputs a betterunderstandingofbusinessmodelsandhelpidentifyopportunitiesforimprovement. the Ansoff Matrix, andPorter’s FiveForces. The objectiveisforparticipantstogetfamiliarwithtoolsthatfacilitate This sessionpresentsvarious tools, includingtheSWOT (strengths, weaknesses, opportunities andthreats)analysis, Description Se Prepareexamplesofhowtoapplythetoolspreviouscases. Printlayoutswithtools’descriptionandtemplate. Selecttoolstopresent. 3 2 1 4. Groupwork: applyoneortwooftheexplainedtools 3. Presentationof Porter’s Five Forces andinplenaryapply 45minutes 11.00 –12.00 45minutes 2. Presentationof Ansoff Matrixandinplenaryapply 15minutes 10.15 –11.00 1.10.00 –10.15 PresentationofSWOT andinplenaryapplytheSWOT 30minutes Otherbusinessmodelanalysistools 09.30 –10.00 30minutes 3½hours 09.00 –09.30 09.00 –12.30 ssio Apply toolstoaconcretebusinesscase Describe SWO Identify v n 8 arious analysistoolsthatcanbeusefulfortheirwork T, Ansoff MatrixandPorters’ FiveForces to thesamebusinesscaseasformodelanalysis Porter’s Five Forces tooneofthepreviouslydiscussedcases the Ansoff Matrixtooneofthepreviouslydiscussedcases to oneofthepreviouslydiscussedcases Tea & coffee break coffee & Tea GO TO POWERPOINT PRESENTATION 53 Inclusive Business Models Module 8 Business analysis tools Item 5: After each presentation, invite the other groups to ask questions and make suggestions for improvement. the toolstobeappliedbyeachgrouporletthemchoosethemselves. Item 4: Groupsandcasesarethesameasforbusinessmodelcomponentanalysis. The facilitatorcanassign Item 3: SeePowerPoint M8, thirdpart, informationforhandoutin Annex 5andtemplatein Annex 6. Item 2: SeePowerPoint M8, secondpart, informationforhandoutin Annex 3andtemplatein Annex 4. the plenary. and lessusedtoapplyingitabusinesscase. Therefore, thetimeshouldbeusedtoapplyitabusinesscasein the tool. However, participantswillbemoreusedtoapplyingitfortheirownorganizationorsectoranalysis, Consideration: As theSWOT isprobablyalreadyknownbyparticipants, notmuchtimewillbeneededtopresent template in Annex 2fortheplenaryexerciseandgroupwork. Item 1: SeePowerPoint M8, firstpart. BackgroundontheSWOT in Annex1istouseasahandout, andthe 54 Inclusive Business Models Module 8 Business analysis tools happenings. However, tomake agoodSWOT, itisreallyimportanttochooseyourunitofanalysis carefully. The SWOT analysisneedstobedoneregularlykeep youasthebusinessownerperceptivetointernalandexternal technological, economic, environmentalandpolitical. These areallthreatsthatcanimpactyourbusiness. Knowing what these threatsareand where theyarebrewing is key. Threats are also external and out of your control. There are always threats in any business and in any industry. and howyoucancapitalizeontheseopportunities. on is critical. It is important to understand what is new in your industry, what is changing, what is being phased out business. Itisnosecretthattheworldchangingrapidly. Therefore, lookingfornewopportunitiestotake thelead There shouldbecontinuousvigilanceabout whatexternalopportunitiesareavailable thatmayexpand your internal andinyourcontrol. Butthentherearetheexternaldynamicsthatwewillnowanalyse. The strengthsandweaknessesofyourbusiness arecertainlysomethingthatcanbemanagedbecausethey on yourweaknesses. Byknowingwhereyourweaknessesare, youcanstrengthenthem. Once youhaveassessedyourstrengths, youwant toaddressyourweaknesses. Itisequallyasimportanttofocus you apartfromyourcompetition. most capable; thisisyourbusinessessignature. Focusing on yourbusinessesstrengthswillbethecatalystinsetting does notmeanthatyoushouldthroweverythingelseaway, itdoesmeanthatyoushouldrealizewhereare and make themyourcorefocus. They arewhereyoudoingbestandmaybeleadinginthemarket. While this Your gives youabird’s-eye viewofallpossibilities. allows youtoseeenvironmentalthreatsthatcanpreparefororopportunitiesseize. SWOT analysis The SWOT analysisallowsyoutoexploreyourbusinessclosely, andtoseewhatisnotworking. Italso aware ofyourinternalandexternalsituations. sector. You areabletocreateabetterbusinessstrategy whenyouare Focus onthebusinessmodelbeinganalysed, notthewholechainor audit ofpossibleeffectstoyourbusiness. When you apply the SWOT analysis, you are doing an internal and external analysis aswell. for largebusinesses, yetsmallbusinessescertainlybenefitfromtheSWOT Often a tool such as the SWOT analysis is thought to be applicable only From Mindtoolshttp://www.mindtools.com/pages/article/newTMC_05.htm For handout Annex 1: Introduction totheSWOT Advantages Useful tostartopendiscussion withstak Useful forsmallandlargebusinesses Aw F High-level assessments irst pointforbrainstorming strengths should be nurtured. When you figure out what your business strengths are, improve upon them E Internal: areness ofinternal-external situation xternal: Opportunitiesand Threats. Strengthsand Weaknesses. eholders Disadvantages provides adescriptionofthe generalscenario. A strategicplandoesn’tfollow theSWO useful (analysethebusiness itself, notthesector) on theunitofanalysis; otherwiseSWOT isnot Need tohaveaclear E xternal threatscomeindifferentforms: social, OPPORTUNITIES unit ofanalysis. Spendtime O STRENGTHS SWOT analisys S W WEAKNESSES THREATS T T. Itonly 55 Inclusive Business Models Module 8 Business analysis tools U Annex 2: Template forSWOT analysis N Strengths W IT OF A IT eakness ...... N ALYSIS: T Opportunities hreats ...... 56 Inclusive Business Models Module 8 Business analysis tools another level. And bymovingtwoquadrants andtargetinganewmarket withanewproduct, you increase yourrisktoyet different needsanddynamics thanyouthought, andthe newproductmayjustnotbecommerciallysuccessful. product, ordeveloping anewproductforanexistingmarket. The newmarket mayturnout tohaveradically However, you expose yourself to a whole new level of risk by either moving into a new market with an existing know theproductworks, andthemarket isfamiliar. From abusinessperspective, thelow-riskoptionistostaywithyourexisting productinyourexistingmarket: you The Corporate Ansoff Matrix move intoanewquadrant (horizontallyorvertically)youincreaserisk. The Matrixessentiallyshowstheriskthataparticularstrategy willexposeyouto, theideabeingthateach timeyou businesses cangrow, andhelpspeoplethinkabouttherisksassociatedwitheachoption. Sometimes calledtheProduct/Market business peopleaquickandsimpleway ofthinkingaboutgrowth. The Ansoff Matrixwas firstpublishedintheHarvard BusinessReviewin1957, andhasgivengenerations of Understanding thetool you cannarrowthemdownandchoosetheonesthatbestsuityoursituation. This is where you can use a strategic approach, such as the Ansoff Matrix, to start screening your options, so that And why? new channels, andlaunchingnewmarketing campaigns. That’s great!Butwhichoftheseideasshouldyouchoose? hundreds ofideasaboutthingstheycoulddo, includingdevelopingnewproducts, openingupnewmarkets and Successful businesspeoplespendalotoftimethinkingabouthowtheycanincreaseprofits. They typicallyhave Understanding therisksofdifferent options From Mindtoolshttp://www.mindtools.com/pages/article/newTMC_90.htm For handout Annex 3: Background informationonthe Ansoff Matrix

New markets Existing markets Existing products development penetration Market Market E xpansion Grid, thematrix(seeFigure1below) showsfourways that Diversi cation New products development Product 57 Inclusive Business Models Module 8 Business analysis tools 1. Use ofthetoolisstraightforward: How tousethetool 2. same people. Hereyoumight: You aretryingtosellmoreofthesamethings Market penetration Advantages different people. Hereyoumight: market. You aretryingtosellthesamethings You aretargetingnewmarkets, ornewareasofthe Market development

classify differentapproaches. Plot theapproachesyou’ Manage riskappropriately from yournormalcustomers. different age, genderordemographicprofiles Target differentgroupsofpeople, perhapswith transporters, cooperatives) Use differentsaleschannels(e.g. traders, communities, cities). Target differentgeographicalmarkets (e.g. other markets). Buy acompetitorcompany(particularlyinmature Increase yoursalesforceactivities. Launch priceorotherspecialofferpromotions. Introduce aloyaltyscheme. more ofit. existing market tochooseyourproduct, ortouse Advertise, toencouragemorepeoplewithinyour Good asastartingpoint Mak Easy andquicktoimplement Open mindtowhatcanbedoneandnewideas “break” you. Y product oraboutwhatmakes thenewmarket “tick”. Y Y Y ou have firstly thought throughwhat you have to do if things don’t work out, andthatfailurewon’t ou have plenty of resources to cover a possible lean period while you are learning how to sell the new ou buildthecapabilitiesneededtosucceedinnewquadrant. ou researchthemovecarefully. e decisionsonwheretogo re consideringonthematrix. The tablebelowhelpsyouthinkabouthowmight . Ifyou’re switchingfromonequadrant toanother, make surethat: other maynotbeaffected. one businesssufferfromadversecircumstances, the The mainadvantage ofdiversificationisthat, should different productsorservicestocustomers. of scale, becauseyouaretryingtosellcompletely using existingexpertiseorforachievingeconomies This strategyisrisky: there’s oftenlittlescopefor people. Hereyoumight: Here, youaresellingmorethingstothesame Product development Disadvantages Diversification Improve customerserviceorquality. varieties ofcassava products, driedcassava) Develop relatedproductsorservices(e.g. packaging existingproductsinnewways. Extend yourproductbyproducingvariants, or Does notincludeexternalenvironment(mark Lack ofdetails: product andcustomerassessments) toogeneral et, 58 Inclusive Business Models Module 8 Business analysis tools quadrants whythatapproachisnotappropriateortoorisky. Consider the best approach for the next business development phase and fill the quadrant. Annex 4: Template tousefor Ansoff Matrixanalysis Or: Why not? Or: Why What todoifresultsaredisappointing?: Investments tomake: What researchisneeded?: How?: Market development not? Or: Why What todoifresultsaredisappointing?: Investments tomake: What researchisneeded?: How?: Market penetration Or: Why not? Or: Why What todoifresultsaredisappointing?: Investments tomake: What researchisneeded?: How?: Diversification not? Or: Why What todoifresultsaredisappointing?: Investments tomake: What researchisneeded?: How?: Product development E xplain in the other 59 Inclusive Business Models Module 8 Business analysis tools 4. 3. 2. 1. situation.are: These Five Forces Analysis assumes that there are five important forcesthat determine competitive power inabusiness Understanding thetool profitable. However, itcanbeveryilluminatingwhenusedtounderstandthebalanceofpowerinothersituations. Conventionally, thetoolisusedtoidentifywhethernewproducts, servicesorbusinesseshavethepotentialtobe a situationofweakness, andavoidtakingwrongsteps. This makes itanimportantpartofyourplanningtoolkit. With aclearunderstandingofwherepowerlies, youcantake fairadvantage ofasituationstrength, improve the strengthofapositionyou’re consideringmovinginto. situation. This isusefulbecauseithelpsyouunderstandboththestrengthofyourcurrentcompetitiveposition, and The Porter’s FiveForces toolisasimplebutpowerfulforunderstandingwherepowerliesinbusiness March – April 1979, pp. 86–93. classic article which introduces it is “How Competitive Forces Shape Strategy” in Harvard Business Review 57, profitability ofanindustry. Sincepublication, ithasbecomeoneofthemostimportantbusinessstrategy tools. The The toolwas createdbyHarvard BusinessSchoolprofessor, MichaelPorter, toanalysetheattractiveness andlikely Assessing theBalanceofPower inaBusinessSituation From Mindtoolshttp://www.mindtools.com/pages/article/newTMC_08.htm For handout Annex 5: Porter’s FiveForces 5.

Thr Thr On theotherhand, ifnooneelsecandowhatyoudo, thenyoucanoftenhavetremendousstrength. power inthesituation, becausesuppliersandbuyerswillgoelsewhereifthey don’tgetagooddealfromyou. many competitors, and they offerequally attractive products and services, thenyou’ll most likely have little Competitive are oftenabletodictatetermsyou. your productsandservicestothoseofsomeoneelse, andsoon. Ifyoudealwithfew, powerfulbuyers, thenthey number of buyers, the importance of each individual buyer to your business, the cost to them of switching from Buyer P need suppliers’help, themorepowerfulyoursuppliersare. cost ofswitchingfromonetoanother, andsoon. The fewerthesupplierchoices youhave, andthemoreyou suppliers ofeachkey input, theuniquenessoftheirproductorservice, theirstrengthandcontrol overyou, the Supplier P position andtake fair advantage ofit. weaken yourposition. Ifyouhavestronganddurable barrierstoentry, thenyoucanpreserveafavourable you havelittleprotectionforyourkey technologies, thennewcompetitorscanquicklyenteryourmarket and time ormoneytoenteryourmarket andcompeteeffectively, iftherearefeweconomies ofscaleinplace, orif then thisweakens your power. substitute bydoingtheprocessmanuallyoroutsourcing it. Ifsubstitutioniseasyand viable, you do–forexample, ifyousupply auniquesoftware product thatautomatesanimportantprocess, peoplemay eat ofNewEntry: Power isalsoaffectedbythe abilityofpeopletoenteryourmarket. Ifitcostslittlein eat ofSubstitution: This isaffectedbytheabilityofyourcustomerstofindadifferent way ofdoingwhat ower: Hereyouask yourself how easy itisfor buyers todriveprices down. Again, thisis driven bythe ower: Hereyouassesshoweasyitisforsuppliers todriveupprices. This isdrivenbythenumberof Rivalry: What isimportantherethenumberandcapabilityofyourcompetitors. Ifyouhave 60 Inclusive Business Models Module 8 Business analysis tools tool helpsyouthinkaboutwhatcandotomoveintoa strongerone. increase your power with respect to each force. What’s more, if you find yourself in a structurally weak position, this situations areperfect; however, lookingatthingsinthisway helpsyouthinkthroughwhatcouldchangeto Then lookatthesituationyoufindusingthisanalysisandthinkthroughhowitaffectsyou. Bearinmindthatfew strongly againstyou(youcanseethisintheexamplebelow). way ofdoingthisistouse, forexample, asingle “+” signforaforcemoderately inyourfavour, or “--” foraforce Then, markthekey factorsonthediagram, andsummarizethesizescaleofforceondiagram. An easy in thediagram above. Brainstorm therelevant factorsfor your market orsituation, andthencheckagainstthefactorslistedforforce To usethetooltounderstandyoursituation, lookateachoftheseforcesonebyandwriteyourobservations. Using thetool Figure 1–Porter’s FiveForces These forcescanbeneatlybroughttogetherinadiagram like theoneinFigure1below: Advantages Identifies balanceofpower Helps mak Identifies actionstobetak Helps developactionplanto bemorecompetitive Multiple actorsbuyer Broad analysisofsituation e decisions Threat ofsubstitution: Threat ofnewentry: Supplier power: Supplier • • • • • • • • • • • • • • Cost ofchange Substitute performance Cost ofchanging Your abilitytosubstitute Uniqueness ofservice Size ofsuppliers Number ofsuppliers etc. Barriers toentry Technology protection Cost advantages Economies ofscale Specialist knowledge Time andcostofentry power -seller-competitors en substitution Competitive new entry Threat of Threat of rivalry Disadvantages Not sharpenoughtodevelop actionplan Need torepeatitmanytimes Requires agreatdealofinformation Buyer power: Competitive rivalry: • • • • • • • • • • • • Size ofeachorder Number ofcustomers Costs ofleavingmarket Customer loyalty Switching costs Other differences Quality differences Number ofcompetitors Cost ofchanging Ability tosubstitute Price sensitivity Differences betweencompetitors power Buyer 61 Inclusive Business Models Module 8 Business analysis tools business that’s ina stronger position. Maybe he’llneedtospecialize inasectorofthemarket that’s protectedfromsomeofthese forces, orfindarelated Unless heisabletofindsome way ofchangingthissituation, thislookslike averytoughindustrytosurvivein. This worrieshim: Figure 2–Porter’s FiveForces Example: buyingafarm the situationthrough: and wants toswitchacareerwherehe’s hisownboss. HecreatesthefollowingFiveForces Analysis ashethinks Martin Johnsonisdecidingwhethertoswitchcareersandbecomeafarmer–he’s always lovedthecountryside Example T Buyer P competition putsstrongdownward pressure onprices. Competitive rivalry competitors cancomeintotheindustryeasily, reducingprofits. T here issomethreat ofsubstitution . he threat ofnewentryisquitehigh: ifanyone looksasifthey’re making asustainedprofit, new ower isstrong, againimplying strongdownward pressureonprices. Supplier power: Threat ofnewentry: Threat ofsubstitution: • • • • • • • • • • • • • • • • Supplier New entryquiteeasy: – Low barrierstoentry No technologyprotection business forsometime Some costbene tsifin Some economiesofscale but trainingeasilyavailable Experiences needed, to entertheindustry Not tooexpensive Able tochange Able tosubstitute Similar products Suppliers large Moderate no. ofsuppliers Some substitution: – Ability toimportfood Some cross-productsubst. Neural supplierpower power is extremely high: if someone raises prices, they’ll be quickly undercut. Intense O substitution Competitive new entry Threat of Threat of rivalry – – – – Competitive rivalry: Buyer power: • • • • • • • • • • • • • Overall: – High costofleavingmarket Low customerloyalty Low switchingcosts Commodity products Very manycompetitors High buyerpower: – Ability tosubstitute Extreme pricesensitivity Homogeneous product Very largeorders May becooperatives? Few, largesupermarkets – – power Buyer 62 Inclusive Business Models Module 8 Business analysis tools Annex 6: Template toapplyPorter’s FiveForces Supplier power Threat ofsubstitution Competitive rivalry Threat ofnewentry Buyer power 63 Inclusive Business Models Module 8 Business analysis tools

Identifying commonpriorities recap thebusinessmodelanalysis. However, ifavisittomarket oragribusinessand/or asessiononotherbusinesstoolshasbeenincluded, then Item 1: Ifthesessiondirectlyfollowsbusinessmodelanalysis (session7), arecapmaynotbenecessary. too much, astheprioritiesshouldreallycomefrom theproducersandtheirbuyers. common prioritiestobetterexplain theconcept. However, careshouldbetaken nottoconditiontheparticipants Consideration: After thelasttraining, itwas suggestedinthepresentation thatexamplesbeprovidedofcritical Preparation Timing Option 1: FAO. 2015. Reference material Participants willbeableto: Outputs activities andinterventionstoaddressthemcanbedesignedimplemented(stepthree). common toboththesellerandabuyer(steptwo). Oncethecommonupgrading prioritieshavebeenidentified, This sessionpresentsstepstwoandthreeoftheIBMapproach. Commonupgrading prioritiesarethoseaction-areas Description Se buyers of agricultural produce agricultural of buyers Test templateforprojectingresults. Printtemplateforupgradingactivities. Printtemplateforcommonpriorities. 3 2 Groupwork: Identify andrankcommonupgradingpriorities 1 Groupwork: identifyupgradingprioritiesfromsellerperspective Groupwork: identifyupgradingprioritiesfrombuyerperspective 20minutes 20minutes 14.40 –15.00 RecapofBManalysisandpresentationcommonupgrading 20minutes 14.20 –14.40 Identifycommonupgradingpriorities 14.00 –14.20 30minutes 1½hours 13.30 –14.00 13.30 –15.00 SEE POWERPOINT M9 ssio Identify commonprioritiestopushthebusinessforw Analyse abusinessmodelintermsofproducerandbuyerpriorities n 9A Inclusive Business Models: Guidelines for improving linkages between producer groups and and groups producer between linkages improving for Guidelines Models: Business Inclusive (Chapter4, pp. 31–32). priorities andrankingtool ard GO TO POWERPOINT PRESENTATION 65 Inclusive Business Models Module 9 Step 2: Identifying common priorities after theother, thegroupworkcouldmorecloselysimulatearoundtable: Alternative approachtothisgroupwork–insteadofaskingthegroupsidentifybuyerandproducerprioritiesone desk exercise, butbasedonconversationswiththeproducersandbuyers, possiblythrougharoundtable. Items 2, 3 and 4: understand whattheyareexpectedtodointhegroupexercise. reflect onwhatapriorityis. Write themdownonaflipchart. Guidethemtocomeupwiththeprioritiessothatthey presentation containsguidelinesfortheBlueSkiescase, butthisshouldreallycomefrom participantssothatthey In theplenary, askparticipantstotryidentifybuyers’andsellers’prioritiesforacasealreadystudied. The ii. iii. i.

one participantwilltake theroleofneutral facilitator. consensus ontheircommonupgrading priorities. T will workontheirrespectivepriorities. T Divide hey willthenpresentthem(withinthegrouponly), andtheneutral facilitatorwilltrytohelpthemfind he neutral facilitator will give the recap of the previous business modelanalysis, after which the subgroups each group into two subgroups. One subgroup will play the producers, one subgroup the buyers, and At theintroductionofexercise, remindtheparticipantsthatnormallythisshouldnot bea 66 Inclusive Business Models Module 9 Step 2: Identifying common priorities Designing upgrading activities identification ofpriorities, rather thanlettheparticipantsleavewitherroneousideasofpotential activities. Consideration: Ifnotenoughtimeislefttohavea properdiscussiononpotentialactivities, itisbettertostopatthe activities andwritethemontheflipchart. The slideshouldonlybeusedasreference. The presentationincludesexamplesofactivities fromtheBlueSkiescase. Again askparticipantstocomeupwith that theparticipantscansupportwithintheircurrentjob/projectwithoutadditionalfunding. Items 2: Instructparticipantstoidentifyactivitiesthatthebusinesspartnerscanimplementthemselvesandthose Consideration: Provideexamplesofupgrading activities. Item 1: SeePowerPoint M9b. Timing Option 1: FAO. 2015. Reference material Participants willbeableto: Outputs Se buyers of agricultural produce agricultural of buyers 53 70 or 2. Groupwork: For eachcommonpriorityidentifyupgrading 1. Presentationondesigningupgradingactivities Designingupgradingactivities 1½hours 15minutes 15.30 –17.00 1hr45min 15.15 –15.30 15.15 –17.00 ssio Apply conceptslearnedduringthetr Reflect onw n 9B ays toimprovethecurrentprojectsituation. Inclusive Business Models: Guidelines for improving linkages between producer groups and and groups producer between linkages improving for Guidelines Models: Business Inclusive (Chapter4, pp. 32–33). activities: aining. P T o beimplementedbythebuyerandseller ossible supportparticipantscouldprovide GO TO POWERPOINT PRESENTATION 67 Inclusive Business Models Module 9 Step 3: Designing upgrading activities Annex 1: Template forcommonpriorities Buyer priorities Priorities Seller priorities 68 Inclusive Business Models Module 9 Step 3: Designing upgrading activities Responsible: Activities toaddressthem: Buyer: Producer: Priority 3 Responsible: Activities toaddressthem: Buyer: Producer: Priority 2 Responsible: Activities toaddressthem: Buyer: Producer: Priority 1 Annex 2: Template forcommonpriorities 69 Inclusive Business Models Module 9 Step 3: Designing upgrading activities

Closing session lessons andfollow-upactivities. lessons werenotmentioned, followuptoensuretheyarebroughtup. Close thesessionbyrecappingkey Ask participantstolistwhattheywilltake away from thetraining. After everyonehasspoken, ifanyoftheimportant understanding duringthetraining. the listeveningbeforelastdaytoseeifanychanges needtobemadegiventheparticipants’levelof Item 1: Preparebeforehandalistofkey lessonsyouwant participantstorememberwhentheyleave. Review Preparation Timing Participants willbeableto: Outputs continuous improvementofthetraining. the practical toolstoimplementtheIBMapproach. Additionally, itisimportanttogetparticipants’feedbackfor This sessionisthetraining wrap-up. Itprovidesaspaceforparticipantstoreflect ontheknowledgeacquiredand Description Se ArrangeforFAORep orotherofficertogive a key noteandhandover certificates. Printcopiesof certificatewitheachoftheparticipants’name. Printcopiesof writtenevaluation. 4 Preparelistof key lessonsyouwant participants totake away. 3 2 4. Closingspeech andhandingoutoftrainingcertificates 1 3. Round-tableof participants’feedback 30minutes 15minutes 12.30 –13.00 1. Facilitator asksparticipantstolistmainlearningpoints 15minutes 12.15 –12.30 Workshop closure 12.00 –12.15 15minutes 1hr15min 11.45 –12.00 11.45 –13.00 ssi Identify follow-upactions State mainlearningsfromthetr Provide anev on 10 aluation ofthetraining aining 2. Written evaluation2. Written and recapskey lessons 71 Inclusive Business Models Module 10 Closing session Item 4: Seesamplecertificateinthetraining material. Item 3: Askparticipantstoidentifywhattheyliked mostandleastaboutthetraining. Item 2: See Annex 1forwrittenevaluation form. See Annex 3foralistwithfurtherreadingtobeincludedinthereport. See Annex 2forasuggestedreportingoutline. Reporting List lessons: The followingareoverall lessonsthatparticipantsshouldhavelearnedfromthetraining: T competitiveness ofthechainasawhole. Mainstreaming businessthinkingcangener Informal andsemi-formalmark Support tosmallholdersandbuyersshouldbecase-specific, Improving theirbusinessmodelcanresultindirectbenefitsforsmallholders. Buyers alsoneedsupporttoimprovetheirbusinessmodels good at. E It isimportanttosupportactors continuous innovation isneededtokeep themodelcompetitive. Improving A strongbusinessmodelrequiresthecollabor T here arebothfinancialandsocialmotivations forbusinessestoworkwithsmallholders. here isno “ideal” businessmodel. All modelshaveadvantages anddisadvantages. very actorshouldfocusonwhattheydobest; thereisnoneedtotrypushactivitiesthattheyarenot a business model is a continuous process. There will always be something that can be improved; ets canbeanimportanttransitioning groundformoreformalmarkets. , butnotperformactivitiesontheirbehalf–thatcanthreatensustainability. ation ofdifferentactors. ate importantbenefitsforsmallholdersandimprove accordingtotheircapabilitiesandneeds. , particularlysmalltraders andprocessors. 72 Inclusive Business Models Module 10 Closing session Length oftr T Handouts Speak Speak Speakers wereknowledgeableofcontentareas Teaching methods 9 8 7 6 5 4 3 2 1. Please evaluate theusefulness of eachsession: Training sessions What didyoulike leastaboutthetraining: What didyoulik Knowledge gainedcancontributetoimproveeverydaywork Content w Content w Training contentmetmyexpectations Content Identifying andapplyingtoolstoimprovequalityofresultsexistingprojects Reflecting ontheroleofdifferentactorsinpromotingsustainableIBM Becoming familiarwithconceptsandtoolsforIBM The training metthespecificobjectivesof: Objective scale of1(low)through5(high): We appreciateyourhelpinevaluating thistraining. Pleaseindicateyourrating inthecategoriesbelowbyusinga Annex 1: Evaluationform eaching methodswereappropriate ......

Common prioritiesandupgr Business analysistools Appr Implementing IBM–Stepstofollow IBM drivers Inclusive businessmodelprinciples Building backfrombusiness–theroleofbuyers T O he IBMconcept pening session ers wereclearinthepresentations andguidanceongroupwork ers wereconsistentthroughoutsessions aising abusinessmodel , casestudiesand presentationsclarifiedcontent as easilyunderstood as consistentwithstatedobjectives aining was adequate

e mostaboutthetraining:

ading activities

IBM TRAINING EVALUATION FORM

[date and venue] and [date

1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 1 2345 73 Inclusive Business Models Module 10 Closing session O O Lodging andfoodweresatisfactory Meeting roomswereappropriate Logistics ther commentsandsuggestionsforimprovement verall Iwouldrate thistraining

1 2345 1 2345 1 2345 74 Inclusive Business Models Module 10 Closing session Key pointsfrom closingspeech, mainlessonsbyparticipants. 9. Closing Description ofthebusinessmodelvisited, suggestions toimproveit. 8. Visit to... of eachtool. Description ofbusinesstools, main findingsfromtheapplicationofbusinesstools, advantages anddisadvantages 7. Otherbusinesstools considering aparticularbusinessmodel. 6.2 Groupworkonbusinessmodels: IncludemainresultsfromthegrouptoimplementIBMapproachwhen 6.1 Theoretical concepts: ListthestepstoimplementIBMapproachanddescribe howtodoit. 6. ImplementingFAO’s IBMapproach advantages anddisadvantages ofeachdriverrelativetoinclusivenessandcompetitiveness. Include shortbackgroundonthedriversofBMs, shortdescriptionofcasesandacomparative analysisofthe 5. Facilitating inclusivebusinessmodels: IBMdrivers Include summaryofcasedescriptionandfindingsfromtheanalysisprinciples. Include principlesandquestionstoassesstheinclusivenesscompetitivenessofabusinessmodel. 4. Principlesforinclusivebusinessmodels in thecountry/project. Also includeapartwithsessionfindings, withanysuggestionstostrengthensmallholder-based businessmodels from smallholders. to smallholders, challengeswhenprocuringfromsmallholders, andsuggestedpolicyactions to facilitateprocuring Summarize buyers’interviews, including: general descriptionofbusiness, productrequirements, servicesprovided 3. Buildingbackfrom business: therole ofthebuyer concept andanyparticularissuestoconsiderinthecountryand/orprojects. of flipchartstoincludeinthereport. Alsoincludesessionfindingswithinputsfromparticipants’tobuildtheIBM Include mainconclusionsfromparticipants’definitionofinclusiveandbusinessmodel. Ifpossible, take photos 2. What doesinclusivebusinessmodelsmean? The IBMconcept participants’ expectationsandmainconclusionsfromicebreaker activity. Include main remarks from opening speech, mention the organizations that participants represent, summarize 1. Opening Background: Describeprojectsorinitiativesthatledtotheorganizationoftraining. Acronyms Executive Summary: Maximumfourpagessummarizingmainfindingsfromthetraining. Acknowledgements: Mentionpeoplewhohelpedorganizethetraining. Content Annex 2: Outlineoftraining proceedings 75 Inclusive Business Models Module 10 Closing session Annex 5: Annex 4: Casestudies Annex 3: Annex 2: Training agenda Annex 1: Listofparticipants 12. Annexes reading 11. Additional Main findingsonhowtobuildtheIBMconceptoritcouldbeappliedincountry/project. 10. Conclusions E O valuation results pening statement 76 Inclusive Business Models Module 10 Closing session http://www.kit.nl/sed/wp-content/uploads/publications/2080_the_business_of_agricultural_business_services.pdf working withsmallholdersin Africa. Wongtschwski, M., Belt, J., Heemskerk, W. &Kahan, D. 2013. The businessofagricultural businessservices, http://www.fao.org/3/a-i3404e.pdf Investment Centre. Paglietti, L. & Sabrie, R. 2013. Reviewofsmallholderlinkagesfor inclusive agribusinessdevelopment. FA http://www.kit.nl/sed/wp-content/uploads/publications/1441_TradingUp.pdf IRR &KIT. 2008. Trading up. Buildingcooperation betweenfarmersandtraders in Africa. http://www.kit.nl/sed/wp-content/uploads/publications/885_00frontmatter.pdf Rural Reconstruction).2006. Chainempowerment. Supporting African farmerstodevelopmarkets. KIT (Royal Tropical Institute), FAIDA (Market LinkCompanyLtd.)&IRR(InternationalInstituteof Case studiesonsmallholder-based businessmodels Rabobank. 2012. Framework foraninclusivefoodstrategy. UNDP (UnitedNationsDevelopmentProgramme). 2010. Brokering inclusivebusinessmodels. Oxfam &SFL(sustainablefoodlab).2010. Think biggosmall. IBLF (InternationalBusinessLeaders Forum). noyear. A framework forpractical actionininclusivebusiness. GIZ. 2012. Value LinksManual: themethodologyofvalue chainpromotion. GIZ (German Agency forInternationalCooperation). 2012. Guidetoinclusiveagribusiness. a comparative review. CTA (Technical Centre for Agricultural andRural Cooperation). 2013. Guides for value chaindevelopment: CIAT (InternationalCenterfor Tropical Agriculture). 2014. LI Other methodologies This lististobeincludedinthetraining report. Annex 3: Additional reading business modelsthatlinksmallholderstomark ets. N K Methodology: a participatory guide to O

77 Inclusive Business Models Module 10 Closing session

Inclusive Business Models TRAINING MODULES

Various types of inclusive business models (IBMs) can connect small producers to agricultural value chains. Supporting these business models and strengthening the linkages that connect smallholders to markets can improve the overall competitiveness of a value chain and reduce poverty. The training targets designers and implementers of farmer-market linkage projects including ministries, development organizations and NGOs, and can add value not only to smallholder-based development initiatives but also to the business activities of other actors involved in agricultural value chains including processors and buyers of agricultural produce. The IBM training package consists in a facilitator’s manual accompanied by a series of PowerPoint presentations. The manual provides guidance to the facilitator on how the sessions should be organized as well as on expected outputs, preparatory activities, reference notes, description of suggested activities and additional tools such as case studies or templates for group work.

Food and Agriculture Organization ISBN 978-92-5-109982-7 of the United Nations (FAO) Viale delle Terme di Caracalla

00153 Rome, Italy 978 9251 099827 www.fao.org I7968EN/1/10.17