Purpose
ADL Matrix technique is used to manage the business by making judgement around the overall market life cycle and own placement within that market.
The ADL matrix is also called as the strategic condition matrix, which is a quick tool for creating a list of products. The ADL matrix was first invented in 1970 by Arthur D. Little , one of the best known consulting firm intended to help the company manage its collection of product businesses as a portfolio. It is a management technique that is based on the product life cycle. The ADL matrix represents the 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 product. The ADL approach uses the dimensions of environment assessment and business strength assessment that is the competitive position and the industry maturity. It is used to gain more insight into the competitive position of the organization.
The ADL matrix is used for developing the business strategies, as well as for improving the market plans of a particular product line or a single product. In ADL approach, the line of business is define by a product or organizational unit. It must identify the businesses by finding commonalities among products and business lines using the following criteria as a guideline,
- Common rivals
- Prices
- Customers
- Quality
The industry life cycle stage of each business is made on the basis of business market share, investment, profitability, and cash flow. The ADL matrix will only determine the current industry life cycle phase. It is combination of two dimensional matrix that helps to use the ADL for marketing decision making in the business solutions.
Some of the articles related to ADL matrix techniques are as follows,
- Applications of ADL Matrix - https://www.researchgate.net/publication/258518402_Application_of_ADL_Matrix_in_Developed_Industrial_Companies
- ADL Matrix - https://creately.com/usage/adl-matrix-template/
- Summary of ADL Matrix - https://www.valuebasedmanagement.net/methods_adl_matrix.html
- ADL Matrix for Technology Decisions - http://johnbessant.org/wp-content/uploads/2018/04/Tool-The-Arthur-D.-Little-ADL-Matrix.pdf
- ADL Matrix Analysis - https://www.researchgate.net/publication/227462822_PRODUCT_PORTFOLIO_ANALYSIS_-_ARTHUR_D_LITTLE_MATRIX
- ADL Matrix: Product Analysis - https://ideas.repec.org/a/ora/journl/v1y2011i1p754-760.html
- Competence Based ADL Matrix - https://apps.dtic.mil/dtic/tr/fulltext/u2/1077111.pdf
- ADL Matrix Strategic Management - https://www.icsi.edu/media/webmodules/Financial%20and%20Strategic%20Management.pdf
- ADL Matrix: Decision making Model - https://bib.irb.hr/datoteka/114246.Comprehensive_strategic_decision_making_model.pdf
- ADL Matrix: Business Analysis - https://www.businessmanagementideas.com/strategic-management/business-portfolio-analysis-matrix-strategic-management/18787
- ADL Matrix Technique - http://www.strategiimanageriale.ro/papers/130105.pdf
The ADL matrix is classified into two such as,
- Business Strength Measurements - Deciding the business measurements for each product or service based on few factors,
- Dominant - The market leader of the business have a strong position where there is little competition in the business market to reach the goal. It will have a protected technology leadership
- Strong - The market share is strong and stable, regardless of the competitors. This firm has a considerable degree of freedom over its choice of strategies and is often able to act without its market position being threatened by the competitors.
- Favourable - The business line enjoys the competitive advantages in certain segments of market.
- Tenable - It is a position in the overall market, where the competitors are getting stronger.
- Weak - It is the continuous loss of market share. The business line is too small to maintain the profitability.
- Life Cycle Stages in ADL - There are four industry life cycle in ADL Matrix. They are,
- Embryonic - It is the introduction stage, characterized by rapid market growth, very little competition, new technology, high investment and high prices.
- Growth - The market continues to strengthen, increases the sales, and the company brings the new product to the market.
- Mature - The market is stable, that is well established customer base, and the energy is put towards differentiating from the competitors.
- Aging - The demand increases, customers start abandoning the market, the fight for the market share among remaining competitors gets too expensive,and the company begin leaving the market.
