What does the term “strategic supplier” refer to?

The term “strategic supplier” refers to suppliers that are critical to an organization’s competitive advantage. These suppliers typically provide products or services that are essential for the company to perform effectively in its market or industry. They contribute to the unique value proposition that sets the organization apart from its competitors. Engaging with strategic suppliers often involves developing close relationships to ensure alignment with the organization’s goals, fostering innovation, and achieving long-term success.

This concept emphasizes the importance of identifying and nurturing relationships with suppliers that can significantly influence the organization's performance and market position, rather than just focusing on cost considerations or the sheer number of suppliers used. This understanding aligns with the strategic framework of sourcing, where collaboration, long-term partnerships, and shared objectives lead to mutual benefits and enhanced competitiveness.