logo

ADL Matrix

Knowledge Center

Summary, forum, best practices, expert tips and information sources.

15 items • 476.096 visits

ArabicChineseDutchFrenchGermanItalianJapaneseKoreanPortugueseRussianSpanishSwedish

Summary

The ADL Matrix from Arthur D. Little is a portfolio management method.


The ADL portfolio management approach uses an industry assessment and a business strength assessment as its dimensions. The industry measurement is an identification of the life cycle of the industry. The business strength measure is a categorization of the corporation's SBU's into one of five (six) competitive positions: dominant, strong, favorable, tenable, weak (and non-viable). This yields a matrix of 5 competitive positions by 4 life cycle stages. Positioning in the matrix identifies a general strategy.


Defining the line of business in the ADL matrix

ADL matrix portfolio management

In the ADL Matrix approach, the strategist must identify discrete businesses by finding commonalities among products and business lines using the following criteria as guidelines:

  • Common rivals

  • Prices

  • Customers

  • Quality/Style

  • Substitutability

  • Divestment or liquidation

Assessing the Industry Life Cycle stage in the ADL Matrix

The assessment of the Industry Life Cycle stage of each company is made on the basis of:

  • Business market share,

  • Investment, and

  • Profitability and cash flow.

Assessing the competitive position in the ADL Matrix

The competitive position of a firm is based on an assessment of the following criteria:

  • Dominant. Rare, often the result from a almost-monopoly or protected leadership.

  • Strong. A strong company can follow a strategy without too much consideration of moves by rival companies.

  • Favorable. Industry is fragmented. No clear leader among stronger rivals.

  • Tenable. The company has a niche, either geographical or defined by the product.

  • Weak. Business is too small to be profitable or survive over the long term. Critical weaknesses.

LIMITATIONS

Some known limitations of the ADL Matrix are:

  • There is no standard life cycle length.

  • Determining the current industry life cycle phase is difficult.

  • Competitors may influence the length of the life cycle.


Special Interest Group

ADL Matrix Special Interest Group.


Special Interest Group
Special Interest Group (151 members)

Forum

Forum discussions about the ADL Matrix. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.


topic ADL Matrix Cases / Examples
Who could contribute a short case on applying the ADL Matrix? Thx.....
Rating5
 
🔥 What are Criteria for Selection of a Portfolio Management Method?
Hi, I have seen many models and matrices for portfolio managment such as Drucker’s product classification (1963), BCG Growth-share Matrix followed by McKinsey/GE Market Attractiveness-Competitive Posi...
Rating3
 

Start a new topic

Start a new topic about the ADL Matrix

Best Practices

The best, top-rated topics about the ADL Matrix. Here you will find the most valuable ideas and practical suggestions.


Expert Tips

Advanced insights about the ADL Matrix. Here you will find professional advices by experts.


Subject

Pitfalls of Applying Portfolio Matrices

Portfolio Management, Best Practices, Using ADL Matrix
- Care should be taken to generate sufficent information (knowledge) and avoid many forms of cognitive bias of managemen...
Subject

Avoid this Life Cycle Pitfall

Portfolio Management, Product Lifecycle Management
Watch out for a frequently made mistake that is based on a wrong interpretation of life cycles: Do not assume au...
Subject

Exercise ADL Matrix

Portfolio Management
A simple exercise involving 5 business units can be found here....
Information Sources

Various sources of information regarding the ADL Matrix. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


Presentation

ADL Matrix Diagram

Portfolio Management
Download and edit this 12manage PowerPoint graphic for limited personal, educational and business use. Republishing in ...

Research Links

Jump to further research sources regarding the ADL Matrix.


NWS

News

VID

Videos

PRS

Presentations

 
BKS

Books

ACA

Academic

WIK

More


Compare with the ADL Matrix:  BCG Matrix  |  McKinsey Matrix  |  STRATPORT  |  Product Life Cycle  |  Bass Diffusion Model  |  Innovation Adoption Curve  |  Profit Pools  |  Four Trajectories of Industry Change  |  Forget Borrow Learn  |  Product/Market Grid  |  Three Dimensional Business Definition


Return to Management Hub: Finance & Investing  |  Marketing & Sales  |  Strategy & Innovation


More Management Methods, Models and Theory

Special Interest Group

Special Interest Group

Do you know a lot about the ADL Matrix? Become our SIG Leader and gain worldwide recognition as an expert.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2023 12manage - The Executive Fast Track. V16.3 - Last updated: 27-9-2023. All names ™ of their owners.




12manage is looking for BA/MBA students. More info.