ADL matrix

0
2476
Strategic condition matrix - ToolsHero

This article explains the ADL matrix, developed by Arthur D. Little, in a practical way. After reading you will understand the basics of this powerful strategy tool.

Introduction

To gain more insight into the competitive position of organizations, Arthur D. Little developed the strategic condition matrix (ADL-matrix). The ADL matrix consists of two important dimensions: the competitive position and industry maturity (maturity of the product).

ADL matrix, two questions

Industry maturity is similar to the Product Life Cycle (PLC) and is translated into an Industry life cycle of a product in the ADL matrix. When investigating the concepts of the competitive position it is important to answer the following two questions:

  • How strong is the organization’s strategic position?
  • At what stage of its lifecycle is the industry/segment?

In the  model below, Arthur D. Little ‘s ADL matrix is highlighted, in which the combination of various stages in the competitive position and in the industry maturity are decisive for an organization’s strategy:

ADL matrix example & advantages, by Arthur D. Little | ToolsHero

Industrial maturity

There are four categories of industry maturity:

Embryonic stage

The introduction of the product is characterized by a rapid growth market, very little competition and (still) high sales prices.

Growth stage

The market continues to strengthen and sales increase, there are few (if any) competitors.

Maturity stage

The market and market shares are stable, there is an established customer base and the price is lowered because of the growing competition.

Ageing stage

The demand for the product decreases and companies are abandoning the market. Companies stop consolidating or leave the market.

Competitive position

Arthur D. Little formulated five categories for the competitive position within the ADL matrix:

Dominant

At this stage there is little or no competition because a brand-new or unknown product is brought to market.

Strong

The market share is strong and stable, regardless of what the competition is doing.

Favourable

The organization enjoys competitive advantages in certain segments of the market. There are many competitors.

Tenable

The position of the organization in the overall market is small and market share is based, among other things, on a niche or some other form of product differentiation.

Weak

The organization experiences continual loss of market share and it business line is too small to maintain profitability.

More information

  1. Hax, A. C., & Majluf, N. S. (1983). The life-cycle approach to strategic planning.
  2. Proctor, T. (2014). Strategic marketing: an introduction. Routledge.
  3. Sirkis, R. L., Race, S. M., & Little, A. D. (1981). Principles of Strategic Planning for the Food-Service Firm How to select a strategy based on your competitive position in the industry. Cornell Hotel and Restaurant Administration Quarterly, 22(1), 35-41.

How to cite this article:
Van Vliet, V. (2011). ADL matrix. Retrieved [insert date] from ToolsHero: http://www.toolshero.com/strategy/adl-matrix/

Add a link to this page on your website:
<a href=”http://www.toolshero.com/strategy/adl-matrix/”>ToolsHero.com: ADL matrix</a>

Did you find this article interesting?
Your rating is more than welcome or share this article via Social media!

5 / 5 (2 votes)

LEAVE A REPLY

Please enter your comment!
Please enter your name here