The ADL Matrix is a strategic planning tool developed by Arthur D. Little to analyze the competitive position of a company's business units. It evaluates two dimensions: 1) the competitive position which can be dominant, strong, favorable, tenable, or weak; and 2) the industry maturity from embryonic to growth, maturity, and aging stages. By plotting a business unit on the matrix according to these dimensions, companies can assess strengths and weaknesses to guide strategic decisions. However, the model has limitations as industry life cycles can vary in length and positioning is not always clear-cut.

1. Strategic
Product
Management
Arthur D Little Strategic Condition
Matrix
/PGDM/KIAMS/2021
A publication of
Dr. Rajesh K Satpathy

2. Arthur D Little Strategic Condition Matrix

3. To gain more insight into the
competitive position of
organizations, Arthur D.
Little developed the strategic
condition matrix, which is also known
as the ADL Matrix.
The ADL Matrix consists of two
important dimensions: the competitive
position and industry maturity
(maturity of the product).
What is the ADL Matrix?

4. 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:
1. How strong is the organization’s Strategic Position?
2. At what stage of its lifecycle is the industry/segment?
What is the ADL Matrix?

5. Arthur D Little Strategic Condition Matrix

6. The Competitive Position…
A company’s competitive position is determined by strategic
actions and competitors’ strategies.
Quality and strength of competitive position are indicators of
a company’s strength.
The ADL matrix categorizes every segment of the company
according to its position which can be dominant, strong,
favorable, tenable or weak.
What is the ADL Matrix?

7. The Competitive Position…
1. Dominant: This is a comparatively rare and typically short-lived.
In many cases is either to a monopoly or a strong and protected
technology leadership. i.e. Intel Corp, Microsoft in OS
2. Strong: Market share is strong and stable, regardless of
competitors. The firm has a considerable degree of freedom over
its choice of strategies and is often able to act without its market
position being unduly threatened by its competitors. i.e.
Qualcomm Snapdragon
What is the ADL Matrix?

8. The Competitive Position…
3. Favorable: Business line enjoys competitive advantages in
certain segments of market. However there are many rivals, and no
clear leader among stronger rivals. Results in the market leaders a
reasonable degree of freedom. Eg. Samsung, Sony
4. Tenable: Position in the overall market is small or niche, either
geographical or defined by product. Competitors are getting
stronger. Eg. Tesla
5. Weak: Continuous loss of market share. The business line is too
small to maintain profitability. Eg. Skoda India
What is the ADL Matrix?

9. ADL
Matrix?

10. Industrial Maturity
There are four categories of industry maturity…
1. Embryonic stage
The introduction of the product is characterized by a rapid growth
market, very little competition and (still) high sales prices.
2. Growth stage
The market continues to strengthen and sales increase, there are
few (if any) competitors.
What is the ADL Matrix?

11. Industrial Maturity
There are four categories of industry maturity…
3. 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.
4. Ageing stage
The demand for the product decreases and companies are
abandoning the market. Companies stop consolidating or leave
the market.
What is the ADL Matrix?

12. Four steps in creating ADL Matrix:
1. Determining the SBU’s of the company (strategic segmentation
done by clearly defined procedures)
2. Identifying phases of industrial maturity for each SBU (this
should be done for each business in all SBU’s)
3. Determine SBU’s competitive position (company’s
competitiveness in specific, narrow defined industry)
4. Plotting sizes and positions of SBU’s on ADL Matrix
What is the ADL Matrix?

13. ADL matrix has several limitations…The main limitations…
1. The life cycle has no standard length,
2. Determining the current position of an industry in its life cycle
is awkward,
3. The length of life cycle may be influenced by competitors.
What is the ADL Matrix?

14. Thank You !!