This article aims to guide the design and implementation of action‐research projects in value‐chain analysis by presenting a strategic framework focused on small producers and trading and processing firms in developing countries. Its stepwise approach – building on the conceptual framework set out in a companion article – covers in detail what to do, questions to be asked and issues to be considered, and integrates poverty, gender, labour and environmental concerns.‘Upgrading’ strategies potentially available for improving value‐chain participation for small producers are identified, with the ultimate purpose of increasing the rewards and/or reducing the risks.