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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
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:
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:
Assessing the competitive position in the ADL Matrix
The competitive position of a firm is based on an assessment of the following
criteria:
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Dominant. Rare, often the result from a almost-monopoly or
protected leadership.
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Strong. A strong company can follow a strategy without too
much consideration of moves by rival companies.
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Favorable. Industry is fragmented. No clear leader among stronger
rivals.
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Tenable. The company has a niche, either geographical or defined
by the product.
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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:
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There is no standard life cycle length.
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Determining the current industry life cycle phase is difficult.
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Competitors may influence the length of the life cycle.
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Pitfalls of Applying Portfolio Matrices
Portfolio Management, Best Practices, Using ADL Matrix...
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Avoid this Life Cycle Pitfall
Portfolio Management, Product Lifecycle Management...
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Exercise ADL Matrix
Portfolio Management...
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ADL Matrix Diagram
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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
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Three Dimensional Business Definition
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