Source: adapted from G. Gereffi (2001) "Shifting Governance Structures in Global Commodity Chains, With Special Reference to the Internet", American Behavioral Scientist, Vol. 44 No. 10, pp. 1616-1637.
Producer and Buyer-driven Value Chains
Global value chains (GVC) come in two major categories depending on which actor has the most significant influence. This can be either the producer (manufacturer) or the buyer:
  • Producer-driven GVC tend to have high barriers of entry since many commodity chains require capital/technology intensive production and economies of scale, such as in the automobile and aeronautical industries. Under such circumstances, the value chain is mostly coordinated by the producers and the capacity of the distributors to deliver parts provided by subcontractors and finished goods to the marker.
  • Buyer-driven GVC tend to have low barriers to entry. Producers are bound to the decisions of buyers through the functions of design and marketing, notably when retailing and brand names are concerned. The most significant sectors concern agriculture, garments, footwear and toys.