THE

ADL
MATRIX

PREPARED BY:
GROUP 4
AGENDA
 HISTORY
 INTRODUCTION
 DEFINITION
 THE ADL MATRIX
 ADVANTAGES
 DISADVANTAGES/LIMITATIONS
HISTORY
 The ADL Matrix or Arthur D Little Strategic
Condition Matrix is a Portfolio Management
technique that is based on the Product Life
Cycle (PLC). It is developed in the 1980’s by
Arthur D. Little, Inc. (ADL), one of the best-
known consulting firms, intended to help a
company manage its collection of product
businesses as a portfolio.
INTRODUCTION
 The ADL matrix represents a company’s
various businesses in a 2-dimensional
matrix.
 It is a structured methodology for
consideration of strategies which are
dependent on the life cycle of the industry.
The ADL approach uses the dimensions of
environment assessment and business –
strength assessment i.e. Competitive Position
and Industry Maturity.
INTRODUCTION
 The environment assessment is an identification of
the industry’s life cycle and the business strength
assessment is a categorization of the company’s SBU’s
into one of five competitive positions, these five
competitive positions by four life cycle stages. The
combination between the dimensions yields 5
(competitive positions) by 4 (life cycle stages) matrix.
The positioning in the matrix identifies a general
strategy.
 The ADL Matrix is often associated with strategic
planning at business unit level. However, it works equally
well when applied to product lines, or at the level of an
individual product.
LET’S DEFINE!
Competitive Position

 Dominant
 Strong
 Favorable
 Tenable
 Weak
 Competitive Position
◦ determined by strategic actions and
competitor’s strategies
 Dominant

◦ This is a comparatively rare and

typically short-lived.
 Strong

◦ Market share is strong and stable,

regardless of competitors
 Favorable

◦ Business line enjoys competitive

advantages in certain segments of market
 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.
 Industry Maturity

 Embryonic
 Growth
 Mature
 Aging
 Industry maturity = “Industry life
cycle”
◦ Embryonic
 The introduction stage
◦ Growth
 The market continues to strengthen
◦ Mature
 The market is stable
◦ Aging
 Demand decreases
THE ADL MATRIX
STAGE OF INDUSTRY MATURITY
EMBRYONIC GROWTH MATURE AGINGS
• Fast Grow • Fast Grow Position • Defend position • defend
DOMINANT • Build Barriers Act • Attain cost • Attain cost • Renew
• Offensively Leadership Leadership • Focus
COMPETITIVE POSITION

• Renew • Renew • Consider

• Defend position • Fast grow withdrawal
• Act offensively • Act offensively

• Differentiate fast • Differentiate lower • Lower cost • Find niche

STRONG grow cost • Focus • Hold Niche
• Attack small firms • Differentiate • Harvest
• Grow with industry
• Differentiate • Focus • Focus • Harvest
FAVOURABLE • Focus • Differentiate • Differentiate • Turnaround
• Fast grow • Defend • Harvest
• Find niche
• Hold niche
• Turnaround
• Grown with industry
• Hit small firms

• Grow with industry • Hold niche • Turnaround • Divest

TENABLE • focus • Turnaround • Hold Niche • Retrench
• Focus • Retrench
• Grow with industry
• Withdraw
• Find niche • Turnaround • Withdraw • Withdraw
WEAK • Catch up • Retrench • Divest
• Grow with industry • Niche or withdraw
Four steps in creating ADL Matrix
 Determining the SBU’s of the company
 Identifying phases of industrial

maturity for each SBU

 Determine SBU’s competitive position
 Plotting sizes and positions of SBU’s

on ADL Matrix
Advantages of an ADL Matrix
 It’s detailed enough to be quite specific
 It conveys a lot of information in one easy

diagram
 Conclusions are easy to draw from it
 It provides a nice way to map your entire

portfolio in one image

 It’s easy to use
 The discussions generated are often of high

value
Limitations of an ADL Matrix
 Aspects of the model are subjective, such as
the industry lifecycle
 Competitive movements can impact the
analysis
 It can be time consuming
 The model can be out of date relatively

quickly
 The life cycle has no standard length,
 The length of life cycle may be influenced by

competitors
PRESENTORS
◦ MALAPITAN, MELANIE
◦ NULLEN, JENS
RESEARCHERS
◦ LANDICHO, JUSTINE
◦ PINTOR, DOMINIC
POWERPOINT
GROUP 4 ◦ CENTENO, JHENLY ROSE
◦ PERTEZ, JESSA LYN