Foreword

The aims of research and analysis are the description of Tavush marz’s1 economy: revelation of its
efficiency, description of economic interrelations and clusters, as well as the revelation of long-term
development using the Micro Franchising tool.

Tavush marz’s economic competitiveness is viewed in both national and local frames of the global
economy’s development. The regions, communities, and enterprises within the region are also observed
within this context. Further, the national economic competitiveness is a baseline for comparisons of its
sub economic systems.

Analysis of national competitiveness has been implemented in recent years in Armenia, and annual
reports of this information have been recorded (“Economy and Values” NGO2).
Those involved in assessing community competitiveness also have experience and knowledge in the
economic competitiveness field. PACA3 (Participatory Appraisal of Competitive Advantages) methodology
has been adopted and used in different urban communities of Armenia by the German ProSME (GTZ/
PEM) project, with active participation by Business Pareta Ltd.

Business Pareta Ltd implemented appraisal of competitive advantages and value chains of two rural
communities in March and April of 2009, and conducted a business development projects in the
Sarukhan and Vardenik communities of Gegharkunik marz4. The project was financed by Near East
Foundation and Armenia Fund USA

The implementation of local economic development projects has been included in the agenda of
Hayastan All-Armenian Fund since August 2009. Gaining consensus on strategies and implementing
local economic development in Armenia are main priorities. It is within this context that Hayastan All-
Armenian Fund supported the first appraisal of competitive advantages in Tavush marz via the
implementing partner, Business Pareta Ltd.
Summary of the implemented analysis is presented in this document.

Structure of Analysis

The statistical summary of the marz, its position in comparison with other marzes of Armenia, the
structure of the economy, and its competitive analysis are introduced in the first part of the analysis.
The second part of the analysis includes competitiveness of the marz and sub- regions, as well as a
description of the economic sectors using Porter’s Diamond.

The third part of the analysis includes economic clusters, their relationships, the strengths and weakness
of existing structures, and missing structures necessary to develop Tavush’s value chains of economic
efficiency.

The fourth part brings forth possibilities for micro franchising.
Each section ends with conclusions and suggestions directed to executives, local and national governing
bodies, funding organizations, and the social sector.

Methodology Used in Analysis

The methods and tools used in this analysis are:
- Comparative and dynamic analyses of statistical data, Porter’s Diamond for discovering competitive
positions, PACA methodology for participatory appraisal of competitive advantages, Systematic
interviews for revealing territorial and sector clusters, Mini workshops for assessments of sector
productivity.