Foreign Affairs and International Trade Canada
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What are Global Value Chains?
A Global value Chain (GVC) can be defined as the full range of activities a business performs to produce a product or service and deliver it to the customer from its conception to its end use.
When activities are scattered internationally, a GVC exists. The previously internal business processes become fragmented and separable, dividing the production and support processes among many locations and/or international firms, leveraging each hub’s core competencies: firms do only what they do best. In a GVC a product might be:
- developed in Montreal, while parts manufacturing is done in China;
- assembled in India;
- packaged in Turkey; and
- sold in Europe, with an American firm offering after-sales support.
In order to take advantage of these opportunities, firms must have clarity of strategy, distinctive competencies and compatible, well-functioning business relationships.
