Reaping the benefits of value innovation: Lessons for small agribusinesses in Africa

Small agribusinesses play a vital role in sustaining the gross domestic product (GDP) of numerous economies in Africa. The survival and continual growth of these businesses in the global economy is essential to poverty minimisation, sustaining the livelihoods of individuals and subsequently the growth of African economies as a whole. The strategy to stimulate agricultural development advocated by prominent African agricultural organisations and policy makers is to boost investments from the private sector into agriculture by getting domestic and global financial organisations to invest in agro-industry and therefore, agribusiness. This paper argues that such a strategy has the potential to increase the debt of African countries and proposes a more effective alternative. By adopting the strategic logic of value innovation, African small agribusiness owners and/or managers can use and even reduce their current resources or create new ones that can lower their costs substantially, and at the same time, allow them to differentiate themselves. This approach, which has the potential to transform the industry, has had very little exposure in terms of its application in the agricultural industry in Africa. Also, very limited research on value innovation in the context of small agribusinesses in Africa exists. A theory building study was conducted using empirical evidence from a theoretical sample of cases. Reasons why value innovation as strategy is not utilised by small agricultural businesses in Africa were identified and a theoretical model ? the awakening model ? developed to assist small agribusinesses in Africa to adopt this logic and boost their growth and increase their profits for a more prosperous Africa.