14 Strategic Product Management - Arthur D Little Strategic Condition Matrix

Strategic Product Management - Arthur D Little Strategic Condition Matrix

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. Togainmoreinsightintothe
competitive position of
organizations, Arthur D.
Littledeveloped thestrategic
conditionmatrix,whichisalsoknown
astheADLMatrix.
TheADLMatrixconsistsoftwo
importantdimensions:thecompetitive
positionandindustrymaturity
(maturityoftheproduct).
What is the ADL Matrix?

4. ADL Matrix, two questions…
Industry maturity is similar to theProduct 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. TheCompetitivePosition…
Acompany’scompetitivepositionisdeterminedbystrategic
actionsandcompetitors’strategies.
Qualityandstrengthofcompetitivepositionareindicatorsof
acompany’sstrength.
TheADLmatrixcategorizeseverysegmentofthecompany
accordingtoitspositionwhichcanbedominant,strong,
favorable,tenableorweak.
What is the ADL Matrix?

7. TheCompetitivePosition…
1.Dominant:Thisisacomparativelyrareandtypicallyshort-lived.
Inmanycasesiseithertoamonopolyorastrongandprotected
technologyleadership.i.e.IntelCorp,MicrosoftinOS
2.Strong:Marketshareisstrongandstable,regardlessof
competitors.Thefirmhasaconsiderabledegreeoffreedomover
itschoiceofstrategiesandisoftenabletoactwithoutitsmarket
positionbeingundulythreatenedbyitscompetitors.i.e.
QualcommSnapdragon
What is the ADL Matrix?

8. TheCompetitivePosition…
3.Favorable:Businesslineenjoyscompetitiveadvantagesin
certainsegmentsofmarket.Howevertherearemanyrivals,andno
clearleaderamongstrongerrivals.Resultsinthemarketleadersa
reasonabledegreeoffreedom.Eg.Samsung,Sony
4.Tenable:Positionintheoverallmarketissmallorniche,either
geographicalordefinedbyproduct.Competitorsaregetting
stronger.Eg.Tesla
5.Weak:Continuouslossofmarketshare.Thebusinesslineistoo
smalltomaintainprofitability.Eg.SkodaIndia
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!!