Clarification details
Updated December 2019. This document has been updated in its entirety to address new issues that have arisen from moderation.
Students are required to identify the value chain of a product or service and explain the set of activities in the process to deliver a product or service to the market. For example, the value chain for cheese would start with milk production and collection, then go to processing and packaging, then to distribution, then to marketing and sales. What occurs at each step should be explained.
Students need to explain an innovation within the value chain, identifying the stage of the value chain that the innovation occurs in, and explain how the innovation meets market needs.
Examples of innovations in the value chain include:
- adding probiotics to camembert to cater for the health-conscious segment of the market
- enabling traceability of a meat product to enhance consumers’ trust in ethical processing and food safety
- developing a red variety of kiwifruit for the market in China where red is considered lucky and capable of warding off evil.
Merit and Excellence
At Merit, a detailed explanation is required of how the enhanced product will meet market needs and add value to the product. For example, if a change to fruit packaging is being introduced at the outbound logistics stage of the chain, the student would thoroughly explain the producer’s packaging requirements and consumers’ expectations such as protecting the product and minimising packaging waste. The student should discuss how the research, development and other costs associated with the innovation would add value to the fruit products long-term.
For Excellence, the innovation is evaluated in the context of market needs. If the innovation is a grading system to ensure the quality of beef for export, the student would explain in detail how grading meets the current and future needs of the target market.
The student should also provide detailed explanations of how the innovation impacts on all relevant stages of the value chain, such as operations, outbound logistics, and marketing. The consequences of these changes for the business should be explained.