Creation of an alliance

LMIC markets are characterised by uncertainty, variations in available resources and major income disparities within the same country. Therefore, it is vital to gain as wide a perspective as possible about the targeted markets. In order to assure a systematic approach, we propose an expanded version of the value chain concept originally defined by Michael Porter in his book « The Competitive Advantage: Creating and Sustaining Superior Performance ». According to Porter, the value chain refers to the organization of a company or a business unit as a whole; each group of activity in the company, such as operations, logistics or marketing, are a segment of the chain. Each segment consumes resources and adds value to the final output of the company. Our concept of value chain focuses on the product itself and not on the internal organization of a company. Thus, we refer to it as the Product Value Chain (PVC), where each segment of the chain is an activity that adds value to the final solution. A generic version of our proposed Product Value Chain tool is shown below:

Generic Value Chain Canvas. This generic version should be expanded into a more detailed and technology-specific chain.

Analyzing this value chain is vital as there is a tight relationship between each segment and the final product, as well as between the segments themselves. In order for the chain to be sustainable, each contributing segment needs to reliably provide value to the chain as well as retrieve value for itself, i.e. it must be suitably incentivized. For example, one segment is the transport of the product. The transporter brings value to the product by making it locally available, but also needs to earn a suitable margin for this task. Each segment of the chain must be broken down to identify key suppliers, partners and other stakeholders who need to contribute to the sustainable availability and operation of the product. It also helps to identify potential challenges, which should be addressed as the technology is developed through the inputs of the key stakeholders. The information derived from the PVC analysis can thus be used to verify that all the specifications of the product are correct. For the X-ray example, a simplified but specific Product Value Chain looks like this:

The specific value chain as defined in the case of the X-ray example

This exercise allows the identification of the key stakeholders who could be the key enablers in the various chain segments. For Cameroon, conducting the analysis reveals that the National Radioprotection Agency is critical, because their approval is indispensable for the medical usage and proper commissioning of the technology. The same is true about the local radiographer organizations who are also vital players. Finally, this exercise also helps to bring out the importance of having continued and self-sustaining personnel training solutions, due to the high personnel turnover that is often found in LMICs.

One of the important addroles of this tool is to help establish tradeoffs across the value chain. For example, developing an ultra-robust solution might reduce need for maintenance and repairs, but could increase the cost of the technology and make it harder to sell; or spending time to designing a simpler man-machine interface may reduce the need for training and so forth.