A firm buys a particular product that has low business impact and low supply market complexity. How would this product be categorized using the Kraljic classification model?
In the Kraljic Matrix, products are classified based on their impact on the business and the complexity of the supply market. The four categories are:
Leverage Items: High business impact, low supply market complexity.
Noncritical Items: Low business impact, low supply market complexity.
Bottleneck Items: Low business impact, high supply market complexity.
Strategic Items: High business impact, high supply market complexity.
A product with low business impact and low supply market complexity fits into the Noncritical category. These items typically have many suppliers, are easy to manage, and do not significantly affect the firm's operations or profitability.
References
Kraljic, P. (1983). "Purchasing must become supply management." Harvard Business Review, September-October 1983.
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