Understanding segmentation of non-core business suppliers: a case study

Supplier segmentation is a much-discussed topic in the literature and one that is gaining importance in business-to-business (B2B) markets, also in areas that are not related to companies’ core business. This study aims to understand the supplier segmentation of non-core business suppliers. More concretely, it focusses on the dimensions that currently carry the most weight when it comes to supplier segmentation, the procedures used to manage the supplier portfolio, the influence that segmentation has on buyer-supplier relationships, and finally, the external factors that influence segmentation and how. A case study was carried out with the corporate travel department of a company in the energy sector, involving participant observation and seven semi-structured interviews with a total of eight employees whose functions are related to this department and the management of the supplier portfolio. This dissertation shows that segmenting and management of the non-core business supplier portfolio are important activities within companies. Segmentation is carried out considering the multiple dimensions: volume of purchases, quality, security of service delivery, supplier’s irreplaceability, stability, uncertainty, and ability to innovate and be digital. In terms of portfolio management, the main differences between the segments arise in terms of relationships, since suppliers that are more important to companies have closer relationships with them. Finally, the COVID-19 pandemic, the internationalization of companies, digitalization, and legislation have consequences for the selection and management of suppliers.