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Methods and concepts for Value Based Management (VBM)

ADL Matrix

The ADL matrix from Arthur D. Little is a portfolio management method that is based on product life cycle thinking. The ADL portfolio management approach uses the dimensions of environmental assessment and business strength assessment. The environmental measure is an identification of the industry's life cycle. The business strengths measure is a categorization of the corporation's SBU's into one of five (6) competitive positions: dominant, strong, favorable, tenable, weak (and non-viable). This yields a 5 (competitive positions) by 4 (life cycle stages) matrix. Positioning in the matrix identifies a general strategy.

In the ADL approach, the line of business or SBU is not especially defined by a product or organizational unit. The strategist must identify discrete businesses by finding commonalties among products and business lines using the following criteria as guidelines:

This assessment of the industry life cycle stage of each business is made on the basis of:

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

Known limitations of the ADL matrix include: