Category Management Strategy

CATEGORY MANAGEMENT STRATEGY

Category Lead :

Author :

Date :

Category Team members for this project: 1. CATEGORY ANALYSIS Scope / Definition: Identify what is included, and where there could be uncertainty/doubt, what is not, included within the Category

'As Is' Position This should include analysis of expenditure (e.g. Pareto breakdown) cross referenced with contracts undertaken (A contracts register for the category should be provided as Appendix 1 and include renewal dates, contract values and lead officer)

Also to be included here are any barriers and potential issues relevant to successful delivery, e.g. customers views, performance issues, Client obstacles etc.

It is also important to identify any Social and Environmental deliverables being received.

Future demand projections could also be highlighted here, i.e. rise and fall in demand

Supply Positioning Strategic Security Strategic-Critical Risk and Strategic Potential Tactical- Tactical Profit Acquisition

When placing suppliers in the matrix, you should consider the positive aspects as well as the risks. For example, could the supplier help with service innovation/transformation?

2. NEEDS ANALYSIS Stakeholders Use stakeholder mapping to identify a list of key stakeholders (exclude Suppliers) and their interest/influence/input in the category. This need not be an exhaustive list but should include those who may have some influence on direction/outcomes. If necessary, develop a Stakeholder management plan to describe how to approach those perceived as reluctant / opposed.

'Needs' Analysis Identify if there are any statutory requirements for delivering this service, inter- dependencies on elements of the category on other services etc. 3. MARKET ANALYSIS Benchmarking Please provide any summary benchmarks, whether these be comparisons with other LA's, private sector organisations or trade bodies. Indicate if information can be considered reliable and fact based or if it is indicative. Review any market intelligence already gathered from previous exercises PEST

Political Economic e.g. Legislation e.g. Structure of supply market, Government Policy Local capability and capacity Local policy and politics Number & size of suppliers Corporate objectives Demands and supply levels

Social Technical Sustainable e.g equalites, job/training e.g. Manufacturing methods/cost Demographics Methods of service delivery Expectations of service users Market leaders/developments

Note: you may need to include Legal and/or Environmental factors in this analysis. Porter’s Five Forces New Entrants

Industry and Competitive Supplier’s Power Buyer’s Power Rivalry

Substitutes

Using Porter’s Five Forces can help you to establish the key factors influencing the market, including the potential for competition.

Supplier Preference Development Key Customer Attractiveness Nuisance Exploitable

Establish a view of the suppliers’ preferences regarding us a customer / potential customer. Would we be seen as a desirable customer and therefore be in a more powerful position? If not, what would we need to do and can/should we do it? 4. SUMMARY SWOT Analysis

Strengths Weaknesses

Opportunities Threats

Risk Register Create and attach a Risk Register / Risk Analysis for the project, including Mitigating Actions.

Market Management Matrix (or Relationship Management Matrix)

Rethink Strategic Suppliers’ Strategic Potential Control Leverage

Our Customer Profile

This combines the outcomes of the Supplier Positioning (SP) and the Supplier Preference matrices. Control We have a low profile with the supplier in whom we do not see strategic potential. There is little point in developing a deeper relationship with them. Leverage A low Supplier SP with a high Customer Profile, i.e., potentially, a one-sided relationship; we matter to the supplier, but do not see advantages in developing strategic potential with them. The question here is not so much ‘should we develop a deeper relationship?’ as ‘are we maximising our leverage here?’. Also, are we taking an unduly high proportion of their turnover and if so do we need a plan to reduce that risk? Rethink A low profile with the supplier with whom we think there could be strategic potential. The problem is, we don’t think we have their attention. This is a tricky area and essentially we have three options depending largely on why we’ve decided our profile is low with a particular supplier: • Raise our profile by increasing our spend • Market ourselves more effectively to the supplier through other means. It might mean changing our point of contact. It might mean doing something altogether more imaginative to change the supplier’s perception of us as a customer, like offering to work with them on new ways of doing business or new market opportunities • Change to a supplier with whom we would have a higher profile Strategic The area of greatest potential in that we have suppliers to whom we matter, and who we believe offer us the potential to do interesting things. Some of these may well be happening already, but we should now plan a structured, managed relationship which is truly integrated into both organisations. 5. RECOMMENDATIONS AND ACTION PLAN

Options considered for future delivery Briefly summarise options considered for moving forward and reasons option dismissed.

Preferred Option and proposed benefits This should provide a fairly detailed breakdown of the forecast Financial and non- financial benefits, how it will be delivered, opportunities for further collaboration, RAID Analysis (Identify Risks, Assumptions, Issues and Dependencies to successfully delivering plan.). This should describe the desired outcome.

Resource Implications Identify any resource implications (and potential solutions) in implementing this new strategy.

Detailed Timeline for Implementation Provide a timeline for delivery of the constituent parts that form the strategy, and will deliver the desired outcome. Identify the quick wins, short term solutions, medium term options and long term strategies as well as priorities based on maximisation of savings/benefits. Should a Contract Manager be appointed at the outset of the project?

Scorecard for Review & Monitoring Create the scorecard and identify any applicable review dates and proposals on how progress against strategy plan will be monitored.