Though it is not equivalent to its potential, the leather industry in Ethiopia has been onernof the key industries which support the special economic need of the nation called foreignrncurrency generation, besides other economic benefits. Evidently, irrespective of thernpotential availability of relatively competitive resource base, cheap labor, policies andrnstrategies, incentives as well as support institutions, the value captured by the core actorsrnor individual firms and the export performance of the industry shows wider gap from thernexpectation mainly due to weak asymmetric power relation and looser coordinationrnamong different level of actors.rnBut competitors, especially many emerging economies, have shifted their developmentrnstrategies or business environment from simple export-oriented firm level thinking to anrnemphasis on gaining access to higher value adding strategies in global value chains.rnTrue, this necessitates systemic efficiency and competency of all actors along the valuernchain. Actually global value chain approach (VCA), as a method and developmentrnstrategy, gives possibilities to appropriately analyze the efficiencies, competencies,rnopportunities and perhaps also the risks of the whole value chain and help forward therndevelopment or upgrading strategies so as to be globally competitive.rnIn this respect, Ethiopia's leather value chain is characterized by very low supply of rawrnmaterials with poor quality, complex routes of input recovery, sluggish material flow withrnwider gap between end users expectations and producers' performance, very low valuernadded, dysfunctional information flow, weakly exercising of governance functions andrnless coordination among macro-, meso- and micro-level actors along with some rivabyrndirections or policies.rnThus, the immediate measures to be taken so as to make the sector competitive are to fillrnthe gaps of those suboptimal value chain attributes and to reconcile and align thosernantagonistic directions and policies accordingly.rnKey Words: value chain, value added, governance, coordination, transaction cost,rnproduct flow, information flow, critical success factors, leverage points, benchmark,rnupgrading