Value Chain/Market System Approach
AFE promotes a framework for the design and implementation of market development programs that combines the strengths of value chain analysis with participatory methods for identifying sustainable market-based solutions that create benefits for the poor and that promote the competitiveness of industries.
In developing its programs, AFE carries out interviews with market actors and key informants to gain a greater understanding of market trends, industry dynamics, and the role and interrelationships of value chain participants. The objective is to identify constraints hindering business growth and competitiveness and then to identify, assess, and promote commercially viable solutions to these issues. AFE uses an array of tools and methodologies including strategic planning exercises, business planning exercises and participatory focus group discussions with key industry actors to identify the most appropriate facilitation activities.
The major steps in the AFE methodology are presented graphically below:
In all of AFE's program design and implementation activities, effects are made to respect the following principles:
- Facilitate market-based solutions
- Identify program activities (facilitation activities) based on challenges to market-based solutions
- Work toward a clear vision of market-based solutions (have an exit strategy)
- Separate the roles of provider and facilitator of the market-based solution
- Promote competition in the provision of market-based solutions
- Structure relationships with providers of market-based solutions in a businesslike manner
- Make programs flexible and responsive to opportunities
- Promote coordination of donor efforts
- Develop a positive attitude towards the private sector (including the role that middlemen can play)
Working with Lead Firms/Inclusive Businesses