A portfolio model for component purchasing strategy and the case study of two South Korean elevator manufacturers

A new approach to purchasing portfolio modelling, stemming from Kraljic's matrix, for developing purchasing strategies that are aligned with competitive priorities, is developed to address the weaknesses of existing approaches that are preventing widespread application, especially in SMEs. The importance of strategic purchasing to achieving competitive priorities and the need to align it with business strategy is argued through a literature review, which is also used to establish that purchasing portfolio modelling is an effective tool in achieving this alignment. The new approach is applied to two South Korean elevator manufacturers.