Creating and Developing a Category Strategy

This video describes the critical elements of a robust category strategy, and what to be considered in order to be successful!


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A well designed category strategy starts with thinking about a company’s Mission, Vision and Values. A category strategy, regardless of the category, must support your organisation’s business objectives both financial and non-financial. This business alignment is a necessary step to ensure stakeholder involvement in and support for your category strategy.

Procurement’s key objective is to keep the business running with adequate suppliers of goods and services and your strategy needs to describe how, as a category manager, you will ensure this. Analysing the current state and describing a desired future state are the foundations of a good strategy. Necessary inputs are a thorough supply market analysis, knowledge of actual and potential suppliers, risk plans - you need to plan for what might go wrong - and designing an appropriate suite of measurements to drive performance improvement.


A strategy can be defined as a method or plan chosen to bring about a desired future such as the achievement of a goal or a solution to a problem. It is the art and science of planning and marshalling resources for their most efficient and effective use. Consequently we can describe three critical aspects of an effective  category strategy:

1. The importance of a category strategy to guide actions.

2. The importance of stakeholder involvement to ensure support.

3. The importance of measurements to drive goal achievement and performance improvement.

The basis for a category strategy is to align an organisation’s overall objectives as described by its Mission, Vision and Values and thereby define a plan for optimising Procurement performance to support the business objectives. The documented strategy starts with a thorough analysis of the Current state - How much is the spend, with which suppliers, on what commodities and which stakeholders are spending the money. What is the current performance (financial and otherwise) and what is the level of satisfaction with the current state. Understand both stakeholder and supplier viewpoints!

Next what is the desired future state; what innovation may be possible; can you increase integration in the supply chain. Support this ideal state view with a supply market analysis, using tools such as PESTLE analysis, Porter’s Five Forces and a Kraljic matrix. Analyse the suppliers who participate in the market - include both potential and your current suppliers - know where the bargaining power lies - with you or with your suppliers and assess your options. Inevitably things will go wrong so a risk analysis is vital - what happens if there is a disruption in your supply chain? How do you mitigate a potentially costly risk?

Finally, how will you ensure you are on track to deliver and importantly what improvements are possible. Address this by designing a balanced measurements and analytics programme and share progress with your stakeholders.

The realities of strategy are that there are no correct answers. Strategy exists in a world of uncertainty and you will have to make choices. Ensure success by taking leadership, use facts to support your strategy, ensure stakeholder involvement and perhaps most importantly, although operational issues will arise and get in the way - take time to think about strategy!

Faculty name: Graham Chalmers
Duration: 20:11 Min.
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