The Procurement Glossary » Category Strategy
Category Strategy
Sourcing & RFx
Definition
A plan for how a business will source and manage a specific spend category to maximise value and manage risk.
Explanation
A category strategy is built from spend analysis, market and supplier analysis, and business needs. It sets the sourcing approach (competition, consolidation, partnership), the supplier base shape, and the levers to pull — and is refreshed periodically.
Example
The IT-hardware category strategy standardises on two OEMs and shifts to a leasing model to control refresh cost.
Related terms
- Category Management — Managing related groups of spend as strategic business units, each with a tailored strategy and dedicated ownership.
- Strategic Sourcing — A structured, data-driven approach to sourcing that aligns supplier selection with long-term business goals rather than one-off price hunting.
- Spend Analysis — The process of collecting, cleaning, classifying and analysing purchasing data to understand what an organisation buys, from whom and for how much.
- Supplier Consolidation — Reducing the number of suppliers in a category by concentrating spend with fewer, better-managed vendors.
Related concepts
- Spend Analytics — Turning raw procurement transaction data into a clear, categorised picture of what an organisation buys, from whom, and where the savings are.
Frequently Asked Questions
What is Category Strategy?
A plan for how a business will source and manage a specific spend category to maximise value and manage risk. A category strategy is built from spend analysis, market and supplier analysis, and business needs. It sets the sourcing approach (competition, consolidation, partnership), the supplier base shape, and the levers to pull — and is refreshed periodically.
Can you give an example of Category Strategy?
The IT-hardware category strategy standardises on two OEMs and shifts to a leasing model to control refresh cost.
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