Professionalization of rural economies by changing their industry architecture through a business ecosystem approach: evidence fro m the beekeeping indutry in Tanzania

Abstract

This PhD thesis analyses the professionalization of rural economies by changing the industry architecture of the beekeeping industry in Tanzania through the business ecosystems approach. The beekeeping industry in Tanzanian has a huge potential for commercialization. But, firms in the industry, beekeepers in particular, has not been able to create enough value and equally capture a sizable value from the activity. Therefore, beekeepers and other firms in the beekeeping industry need to find a new approach to create value to customers and to fairly capture a sizable value from the beekeeping activity. This thesis is grounded from the following theories: The theory of constraints; business model canvas; industry architecture; value chain/system; business ecosystems and business governance. It is qualitative action research which was carried out in the Mvomero district, Tanzania. For that purpose, a snowball and purposive sampling techniques were used to select cases and sample to participate in the study. Data were obtained through interviews, observations, and discussions. My findings indicate that insufficient financial resources to invest in the beekeeping activities, lack of proper knowledge and skills on commercial beekeeping and management, and lack of business orientation are core challenges that limit the commercialization of beekeeping activities in Tanzania, Mvomero region in particular. These factors are not the same for all actors in the beekeeping value chain: They affect most beekeepers who are the core producers of honey. Therefore, if beekeepers cannot improve their productivity, quality, and hygiene of honey, the beekeeping activity cannot capture enough value for all firms in the beekeeping industry. After the identification of the challenges, this research examines the potential ways to respond to value creation and value capture challenges. The focus is on two major ways to deal with these challenges: first, the change in the industry architecture through the business ecosystems approach, and second, the governance of the ecosystem to create value to customers and capture value for all participating firms in the ecosystem, beekeepers in particular. Both have the potential to respond to commercialization challenges in the beekeeping industry. In the former approach, it was revealed that the existing beekeeping industry architecture presents a value proposition to customers through three channels: beekeepers, processors, and honey traders. Also, the existing business relationship between actors in the beekeeping industry is arms'-length based which is more competitive and limits the ability of beekeepers to capture a sizable value from the activity. Beekeepers create lesser value as well as appropriate relatively lower revenue because they have limited capacity and means to perform some important activities. Therefore, beekeepers should team-up with other actors with complementary skills and asset so as they can improve their value-creating ability and appropriate a sizable value from the activity. The beekeeping industry architecture should change from a transactionbased business relationship to a collaborative business relationship, that is a business ecosystem. In the ecosystem, beekeepers have to collaborate with other firms/actors through a honey collection centre. The business orchestrator should invite other beekeeping actors, particularly beekeepers, organise the ecosystem and manage the collection centre to present a value proposition to the customer. But this does not happen automatically. The ecosystem should be governed through an integrated or hybrid approach: the governance structure which includes beekeepers or their association in the management and operation of the honey collection centre. These findings are valuable for strategic initiatives of beekeepers, other core actors in the beekeeping industry and their supporting entities like projects, non-governmental organisations, donors and government entities including the ministry of industry, trade and marketing; the ministry of natural resources and tourism; small industries development organisation and local government authorities example community development offices that are meant to improve the performance and wellbeing of beekeepers in rural areas. This study shows that changing the industry architecture through a business ecosystems approach and their governance can be powerful tools in the professionalization of beekeeping activities in Tanzania. However, more research is needed to develop an all-inclusive framework that can function as a guideline to improve the professionalization of beekeeping activities in developing countries.