STRATEGY MANAGEMENT

ADL - MATRIX

SUMMITED BY: GRO

NITISH GOEL
SANTOSH GHILDIYAL
ANKIT PHARTIYAL
LAISHRAM ARNOLD SING
DHEERAJ KUMAR
• Developed in the late 1970s by the highly
respected consultancy co, Arthur D Little.
• The co. is based in Boston, Massachusetts and
founded by Arthur Dehon Little.
• Use for developing business strategies, as well as
for strategizing marketing plans for a particular
product line or for a single product
• Helps a business to plan its strategies based on:
Competitive Position – How strong is strategic
position.
Industry Maturity – At what stage of its lifecycle
is the business unit.
  Four steps in creating ADL Matrix:

1. Determining the SBUs of the company (strategic

segmentation done by clearly defined procedures)

2. Identifying phases of industrial maturity for each

SBU (this should be done for each business in all
SBUs)

3. Determine SBUs competitive position (company's

competiveness in specific, narrow defined industry)

4. Plotting sizes and positions of SBUs on ADL Matrix

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 The Industry Maturity Stage
The industry maturity is based on the assessment of the
following criteria:

•Embryonic: Introduction stage characterized by rapid

market growth and very little competition.
•Growth: Market continues to strengthen and sales
increase.
•Mature: Market is stable, there's a well established
customer base and a lot of competition.
•Aging: Demand decreases and companies start to
abandoning the market.
 The Competitive Position
 The competitive position of a firm is based on the assessment of the
following criteria:

 Dominant: This is a comparatively rare and typically short-lived. In

many cases is either to a monopoly or a strong and protected
technology leadership.

 Strong: Market share is strong and stable, regardless of competitors.

The firm has a considerable degree of freedom over its choice of
strategies and is often able to act without its market position.

 Favorable: Business line enjoys competitive advantages in certain

segments of market. However there are many rivals, and no clear leader
among stronger rivals.

 Tenable: Position in overall market is small or niche, either

geographical or defined by product. Competitors are getting stronger.

 Weak: Continuous loss of market share. Business line is too small to

maintain profitability.
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 • (Chief Player in Market) – Strengthen the
Strategy 1 consumer base & aggressive push for market
share
(dominant , • The more control over the customer base, the
Embryonic) easier it will be to prevent the competitors from
entering into the game.

Strategy 2
(DOMINANT , • Should focus its strategies towards maintaining
its market share as well as its market position.
GROWTH)

STRATEGY 3 • Hold on to your market positions and grow your

(DOMINANT, market share .
MATURE) • Reinvest as necessary.

STRATEGY 4 •Focus on holding onto market position, and the market

share it’s bound to fall and nothing much can be done
(DOMINANT,
about it.
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AGEING) SM_ADL MATRIX_GROUP 7 7
 Strategy 5 • Requires an aggressive effort to improve
(STRONG , competitive position as well as to increase the
market share.
Embryonic)

• Requires an aggressive effort to improve

competitive position as well as to increase the
Strategy 6 market share.
(STRONG, GROWTH) • Focus should be slightly more on improving the
competitive position.

• Since the industry is maturing at this point,

STRATEGY 7 there’s need to safeguard the market position.
• At the same time try to grow the market share,
(STRONG , MATURE) keeping it proportionate to the growing
market share of the industry.

STRATEGY 8 •Two options either to tightly hold on to your market

position, or to cut down on the expenses so as to harvest
(STRONG , AGEING) more profits.
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 Strategy 9 • Improve the market position and should keep
(FAVORABLE , pushing to increase its market share.
• Improve Competitive advantage & Invest
Embryonic) Selectively.

Strategy 10 • Business should make investments to boost

(FAVORABLE, GROW its market position, and thus increase its
TH) market share.

STRATEGY 11 • Strategy should aim at identifying a niche

market, to protect the business’s market position
(FAVORABLE , and to grow its market share.
MATURE) • Reinvest Selectively.

STRATEGY 12 •With the exit point approaching, the ideal strategy here
(FAVORABLE , is to cut out expenses, start harvesting profits and
AGEING) develop a phased withdrawal plan.
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 Strategy 13 • Efforts should be directed towards improving the
(TENABLE , market position.
Embryonic) • Invest Very Selectively.

• The business with such odds cannot survive until

Strategy 14 it finds a niche for itself.
(TENABLE, • Or can add in a strong differentiating factor to
entice the consumers and increase its market
GROWTH) share.

• As with the above strategy, here too need to find

STRATEGY 15 a niche and guard it closely.
(TENABLE , • And if that’s not possible, quitting the industry is
MATURE) advisable

•This situation is not likely to bring in any substantial

STRATEGY 16 profits, thus the business should think of planning a
(TENABLE, AGEING) phased withdrawal or abandoning the industry.
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 • This is a bad situation, and the business needs
Strategy 17 to measure the rewards of staying in the
industry against the costs.
(WEAK ,
• If it’s not a profitable proposition, it’s best to
Embryonic) get out of the market.

• Can work on ways to improve both the

Strategy 18 market share and the market position
(WEAK, GROWTH) • Can call it quits.

• Either work on ways to turnaround the

STRATEGY 19 competitive position and market share.
(WEAK , MATURE) • Simply plan a phased out withdrawal.

STRATEGY 20 •The only choice a business has in this extreme

(WEAK , AGEING) situation is to abandon.
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 HP fuels BPCL’s vision
( By adopting Adl matrix )
• The Indian oil sector was under government control until economic
reform process began in the year 1991.

• Subsequently, many fields viz., LPG, lubricants, refinery and even oil
exploration and production were thrown open for private investment.

• The government of India has announced complete deregulation of the

oil industry in April 2002.

• BPCL’s change initiative started towards the end of 1996 with the help
of Arthur D. Little, Inc.(ADL).

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• ADL’s methodology involved co creating a vision for the company,
determining its current reality, conceptualisation of gaps between vision
and current reality.

• According to ADL matrix BPCL lies in strong and mature category.

• They have to safe there market position and also grow there market
share.

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The Challenges –

• Manage enterprise growth efficiently.

• Be prepared for a liberalised environment with competitive

IT infrastructure.

• Achieve performance, reliability and scalability of applications.

• The overriding dimension of this exercise was on increased customer

focus.

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 Innovating with HP
•The company had a host of in-house developed systems which ran on PCs.

•The data generated by many point solutions got consolidated at the regional
offices and then, again, at the central office.

•All this exercise of data gathering, capture and consolidation was unwieldy
and time-consuming.

•After a detailed study, their team concluded the need for replacing the
existing batch process with ERP system (SAP/ R3 software was chosen).

•For fulfilling its demanding data requirements in a centralized setup as part

of its re-architected IT infrastructure, BPCL chose HP Surestore XP256 and
XP512 disk storage systems and Ultrium tape library.

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 Benefits--
• The deployment of HP’s storage boxes has made the
management of enterprise wide data easier and faster .

• Reduction in process hierarchy.

• Future initiatives such as its Petro card debit cards can leverage
on the IT infrastructure.

• Enhanced operational competitiveness through best-in- class

technology.

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 THANK - YOU

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