Building a category strategy: objective, market view, route to market and review trigger

A category strategy is a document that answers four questions. Most organisations answer two, and the two they skip are the ones that make the document useful.

The objective states what the category must deliver, in terms the business recognises. Not "achieve savings of 4%", which is a target rather than a strategy and contains no theory of how the market would produce it. Carrickmoor's coagulant objective should read something like: secure continuity of coagulant supply against a 21-day interruption, at a price that tracks published feedstock and energy indices within two percentage points a year, with a qualified alternative chemistry proven at full scale within 24 months. Every part of that is testable, and any of it can be failed. That is what makes it an objective.

The market view states what you have found and how confident you are. Supplier count, capacity and utilisation, barriers to entry, where power sits, and, critically, the date of the analysis and the source of each figure. A market view with no date is worse than no market view, because it will be believed. Carrickmoor's coagulant market view should carry the 92% figure: that its own requirement is 92% of all spare capacity in the country.

The route to market states the commercial mechanism. The sourcing option, the lot structure, the contract length, the price mechanism, and the evaluation model including the price formula. This is the section you will have to defend to an unsuccessful bidder, and it is dealt with in its own right in the next section because the price formula is a bigger decision than most buyers realise.

Contract length deserves one paragraph of its own because it is usually set by habit. The correct length is the longer of two things: the payback period on any investment the supplier must make to serve you, and the time it takes you to re-establish a competitive position if you need to. For coagulant, a supplier asked to install dedicated storage needs a term long enough to finance it; a buyer in a market that halved in four years needs a term short enough to react. Those pull in opposite directions and the resolution is structural rather than a compromise on the number: a three-year term with a break at 24 months and an indexed price mechanism gives the supplier a financeable horizon and gives you a decision point before the market can move as far as it moved last time.

The review trigger states what would make this strategy wrong. This is the missing section at Carrickmoor and it is the reason the whole case compounds. A trigger has four parts: an observable event, a threshold, a named owner, and a pre-agreed action. Anything missing one of those is a good intention.

Look at what the coagulant triggers would have done. The first supplier exit fires the first trigger, four years ago, and the strategy is reopened while there are still four producers and a real choice. The price divergence trigger fires at the end of year one, when the excess is a few hundred thousand pounds rather than GBP 2.48m a year. The bid count trigger fires at the first competition that attracts two bidders. Any one of them, on its own, catches this. The strategy was not wrong when it was written. It was wrong within a year, and there was no mechanism in the organisation whose job was to notice.

That is worth stating as the general principle, because it is what the exam is testing when it asks about strategy review. A strategy is a decision taken with the information available on a date. Its expiry is not the contract expiry; it is the moment the information changes. If you have not written down what change would matter, you have implicitly asserted that no change would, and that assertion is almost never true and is never defensible.