ABSTRACT
The entry describes Kraljic's 2 by 2 matrix based on portfolio management concepts. The vertical axis is arranged to differentiate suppliers by profit impact to the firm from low to high; the horizontal axis is arranged by supply risk to the firm, also from low to high. Kraljic theorized that, if the firm could classify categories of purchased materials in terms of profit impact and supply risk, buyers could analyze the supply market for these materials and determine the appropriate strategic supply positions.
