Commercialization Inabilities of Rural Value Chain Activities in Emerging Markets: The Theory of Constraints Approach

Abstract

Why value chain activities of rural economies in emerging markets are not commercial? Carpenters in rural Tanzania have been working hard to improve their lives, but they remained poor as they cannot create value for customers and capture a sizable value from the activity. This qualitative case study uses the Theory of Constraints to detect the limiting factors for the commercialization abilities of carpenters in rural Tanzania. Access to finance and basic amenities, technology, business management skills, business attitude, and commitment are the weakest links that limit the ability of carpenters to commercialize their activities. Enhancing technology adoption, building business attitude, culture and skills for rural carpenters is important to commercialize carpentry activities in emerging markets. Linking the Theory of Constraints and the Value Chain theory in management sciences sets an empirical suggestion to commercialize rural economies in emerging markets. Commercialization of rural value chain activities can be done by changing the firms’ abilities to create value to potential customers and capture value from the activity.