Majority of companies have many suppliers due to their complex supply chains and business structures. Just as companies segment its customers; they also have must segment their suppliers. Explain how many segmentation categories exist for most companies. In addition, how are these suppliers’ segments are managed by these companies.
Expert Answer
The four generic levels of segmentation are:
Strategic
Business essential
Leveraged
Arm’s length
There are various attributes that determine the supplier’s segment. Each attribute can have many levers that influence segmentation. Below are the most common attributes used by an organisation for segmentation:
Supplier Spend. Annual spend with the supplier becomes a key lever
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