Exploring strategic upgrading options of smaller shrimp producers in Ecuador: A global value chain perspective

Karla Patricia Diaz Ordónez

Student thesis: Master thesis


This study explores the situation of smaller shrimp producers in Ecuador. As many other producers from developing countries they are facing major changes in the way their operate their businesses. They are today competing in the global economy where the coordination and integration with other actors in so-called Global Value Chains (GVCs) determine their success. This raises a number of challenges for these firms which in many cases may be suffering from inadequate managerial and financial resources, little experience of cooperation with other firms and difficulties in meeting new product standards and quality requirements. With this point of departure the study embarks on an exploratory journey to discover whether it can find any indications to what the smaller producers can do to improve their competitiveness in the industry. The study applies the Global Value Chain (GVC) framework to develop an appropriate methodology which includes important aspects such as chain governance characteristics and firm-level upgrading. Data is collected through a range of secondary sources and primary input from 20 semi-structured interviews with producers and other actors in the Ecuadorian shrimp industry. The results are presented on two levels. The first level provides a mapping of the Ecuadorian shrimp industry and a discussion of global drivers that shapes the industry. It also includes an analysis of governance elements related to chain coordination and rule making and monitoring. The second level emphasises on the smaller producers by examining their operational practices, linkages with other actors in the chain, and upgrading efforts. Overall, the thesis provides a number of interesting indications. First, it suggests that the chain is moving away from a market-based structure to the modular-based type due to increased product specification brought forward by legislative developments. Second, it proposes that the producers play a limited role in the chain serving as input suppliers in a relationship with the actors forward in the chain that is based on little more than price and volume. Third, in this setting the producers have in general only been able to introduce modest cases of process upgrading that are not likely to generate a competitive advantage in the chain. The producers face in general a number of internal and external barriers. It is proposed that all producers should improve their production efficiency and on a collective level consider the strategic option of taking part in forming a co-operative that could give them the scale of resources and scope to initiate various forms of upgrading. The study ends with a call for further studies into the viability of this option along with a more general research agenda.

EducationsMSc in Business, Language and Culture, (Graduate Programme) Final Thesis
Publication date2009
Number of pages126