Question

ment. Figure 5.2: Five GVC governance types at the firm level Modular Market Relatonal Capsve Herary Lead End Uke Lead Cutoreers Fim Integrated Frm Fim Lead Fm Turn key Supplher Relatonal Suppler Price Companent Material Supples Componeot Materal Supplers Captive Supplers Materals sadidng Degree of Explat Coordnaton Degree af Power Asymemetry Low High Source: Gereffi et al (2005), 89 Question 1. (See Figure 5.2) You are a management consultant with expertise in leveraging global value chains for developing small and medium enterprises (SMES). An SME has con- tacted you for advice about how they can escape being a 'captive supplier and become a 'turn-key supplier. What is the gist of your advice?

Answer 1

As The SME contacted me to get escape being a Captive suppliers, here the Firm is controlled and owned by the customer firm and there is exclusive contract between the Vendor Firm and Customer Firm, further the SME want to become Turnkey Supplier, here customer company will focus on Design, Product idea creation, Innovation, R&D Approach, branding and sales, but the Vend Firm will take risk of Manufacturing products as designed and innovated by the customer Firm, to become Turnkey supplier in the market, I could advise Vendor Firm to implement and maintain following things as stated below:

• They should improve their infrastructure for specific category of Manufacturing, further, they should have various Internal resources like Necessary Land/Space, Site, Machineries, Input Material (good quality), Tools and others arrangement like Process mapping and design, good safety follow up and standard placement
• They should have sufficient Manpower and arrangement for Mechanization, automation,
• They should have good strategic team, who could work on various strategic decision and managing prioritizing of various projects
• They should focus on scalable growing and prepare various policies, procedures for internal purpose and maintain the same,
• They should be more aware on various external risk like legal compliance, Taxation and Political risk
• They should have good supply chain strategy which will connect suppliers to customers and help them for receiving the project and managing incoming project,