ADL Matrix: Arthur D Little
Introduction
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on strategy formulation. ADL has two main dimensions - competitive position and industry maturity. Competitive position is driven by the sectors or segments in which a Strategic Business Unit (SBU) operates. The product or service which it markets, and the accesses it has to a range of geographically dispersed markets that are what makes up an organization's competitive position i.e. product and place.

Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be renamed an 'industry life cycle.' Of course not only industries could be considered here but also segments.

  • Competitive Position - How strong is your strategic position?
  • Industry Maturity - At what stage of its lifecycle is the industry?
Industry Maturity

There are four categories of industry maturity (also referred to as the industry life cycle):

  1. Embryonic – The introduction stage, characterized by rapid market growth, very little competition, new technology, high investment and high prices.
  2. Growth – The market continues to strengthen, sales increase, few (if any) competitors exist, and company reaps rewards for bringing a new product to market.
  3. Mature – The market is stable, there’s a well-established customer base, market share is stable, there are lots of competitors, and energy is put toward differentiating from competitors.
  4. Aging – Demand decreases, companies start abandoning the market, the fight for market share among remaining competitors gets too expensive, and companies begin leaving or consolidating until the market’s demise.
Competitive Position

The five categories for competitive position are as follows:

  1. Dominant – This is rare and typically short-lived. There’s little, if any, competition, usually a result of bringing a brand-new product to market or having built an extremely strong reputation in the market (think Microsoft).
  2. Strong – Market share is strong and stable, regardless of what your competitors are doing.
  3. Favorable – Your business line enjoys competitive advantages in certain segments of the market. However, there are many rivals of equal strength, and you have to work to maintain your advantage.
  4. Tenable – Your position in the overall market is small, and market share is based on a niche, a strong geographic location, or some other product differentiation. Strong competitors are overtaking your market share by building their products and defining clear competitive advantages.
  5. Weak – There’s continual loss of market share, and your business line, as it exists, is too small to maintain profitability.
Strategy

 

Embryonic

Growth

Mature

Aging

Dominant

All out push for share. Hold position.

Hold position.
Hold share.

Hold position.
Grow with industry.

Hold position.

Strong

Attempt to improve postion. All out push for share.

Attempt to improve position. Push for share.

Hold position.
Grow with industry.

Hold position or harvest.

Favorable

Selective. Selectively attempt to improve position.

Attempt to improve position. Selective push for share.

Custodial ormaintenance. Find niche and attempt to protect it.

Phased out withdrawal or harvest.

Tenable

Selectively push for position.

Find niche and protect it.

Phased out withdrawal or find niche and hang on. 

Phased out withdrawal or abandon.

Weak

Up or out.

Tumaround or abandon.

Tumaround orphaned out withdrawal.

Abandon

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