Additional Purchasing Factors Beyond Kraljic
Koen Vandermarliere, Business Consultant, Belgium
I usually do a Porter analysis on the commodity, vendor and product level. This means that I review 5 area's that impact that commodity:
: Depending on the existence (or lack) of competition in the market, your purchasing approach will be different.
: How easy is it to start in this market and become a competitor? This might impact your decision regarding the terms of your agreement.
: What are the possibilities to substitute the product by another one?
: What are the other customers doing, who are they, are you a big fish or a small fish in the sea? Is their demand growing or decreasing?
: How is the supply chain set up, are raw material abundant or scarce...
All these points will have an impact on the position that you can take when setting up your strategy for a commodity, a product or even a vendor.