You are working for a company with 500 unique products. You must aggregate these products. The team

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You are working for a company with 500 unique products. You must aggregate these products. The team has decided that they will build a simple way to group products by coming up with six categories. Each category only has three choices. They will apply the categories sequentially. For example, they first break the products into Large, Medium, and Small. Then for each size, they break into Red, Yellow, and Blue; for each color, they break into three more subcategories; and so on for the six categories. What is wrong with this approach?
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