The green gold from Sri Lanka : An explorative research of the value chain of tea in a developing country.
Sammanfattning: Background: Price pressure, together with factors as commodization and demands for lower production costs has had a negative impact on further investments on the tea industry in Sri Lanka. Developing countries must persist in their efforts to catch up with the rapid growth and increased global trade to maintain an important source of growth. Despite increased recognition regarding the importance of economic growth, where it is crucial for a company’s ability to profit with long-term viability by finding a unique combination and collaboration of activities within the value chain, there is still a confusion of how an emerging vertical integration can strengthen the tea industry. Purpose: The purpose of this research is to evaluate, define and describe the value chain of actors and activities from raw material to finished product that activate value increments within the tea industry in Sri Lanka. In order to reach this aim, a deeper understanding of how enterprises choose their way of distribution commodities or value-added product. The empirical data is combined with a theoretical framework that investigates the challenges with vertical integration within the tea industry, focusing on strengthen Sri Lankan tea producers’ value chains. Delimitations: Distinction that investigates Sri Lanka and its value chain of tea. Methodology: This minor field research was performed with an evaluating research design in Sri Lanka. A qualitative approach has been used in combination to the ethnographic method that carries out the collection of data. Semi-structured interviews have been conducted with companies within the tea industry in Sri Lanka to meet the research objective. Conclusions: The vertical integration can be strengthened through informal integrate functions and its emergence can thus promote business networks. Actors linking through investments by brokers can thereby simplify the process of value adding activities to the current tea industry in Sri Lanka.
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