A strategic collaboration of organizations for the purpose of meeting specific market objectives over the long term and for the mutual benefit of all 'links' of the chain. Though conceptually simple, Value Chains represent a marked change in management behaviour and organizational strategies. Within this context, the further removed a chain link is from the final customer, the less knowledge it has of customer preferences. Further, traditional relationships are often characterized by a measure of mistrust. Consequently, this system is not well positioned to respond to market change.
Necessary change is either slow or perhaps missed altogether.
In contrast, Value Chains provide a process and a structure to respond to specific markets and customers more effectively. To this end, the Value Chain is defined by collaboration across the links and is rooted in the development of 'trust' relationships and the sharing of information, costs and benefits. The chain structure is linked by means of interactive information systems and data sharing that are vital to each chain link in responding to customer preferences in the immediate term and more importantly, market change over the long term. Value Chains are currently under study by the Agriculture and Food Council of Alberta and under the direction of the Value Chain Action Team. The study which is funded by the Canadian Adaptation and Rural Development Fund, commenced in March of 1998 and is being released in November.