ADL Matrix is comprised of the industry life-cycle and the strength of the organization’s strategic position. Industry lifecycle is broken up into four stages and strategic position is comprised of five categories.
- Industrial Maturity
- Embryonic Stage: This describes an industry that is relatively new, and as such, has very few organizations that compete against each other. However, the industry is still in existence because it is of peak interest in society and growing rapidly. As such, organizations in this industry are able to sell their products and services at a high cost.
- Growth Stage: These industries are not as new, but are still cutting edge. Because they are slightly more established than an embryonic industry, the market for these industries is larger, thus creating more opportunity for sales. However, to keep up with the demand, growth stage industries might be comprised of a few more companies, increasing competition.
- Maturity Stage: Well-established industries fall into this category. These industries are characterized as having stable or growing shares as well as an established and reliable customer base. Because of the influx of cash, organizations in a mature industry can lower their prices. However, they have to make sure that the cost and quality of their goods and services are comparable with those of other companies. Competition is typically heavier in these industries because there are more organizations to keep up with customer demand.
- Aging Stage: This stage describes industries that are dying out. More specifically, demand for the products and services of the organizations within this industry are outdated or unnecessary, and customers are abandoning these products in favor of more cutting-edge, innovative goods. Competition is minimized as organizations will merge or get out of the industry.
- Competitive Position
- Dominant: Organizations that dominate the market are typically those that exist where there is very little or absolutely no competition. Typically, these are companies that offer brand-new products or services or those that individuals have not heard much about.
- Strong: This position describes organizations that have a steady stream of customers, but share their customer base with other companies in the industry. However, these organizations are able to maintain strong bottom-line performance, regardless of that of their competition.
- Favorable: These organizations have a number of competitors, but have certain unique characteristics that allow them to have control over certain segments of the market but not others.
- Tenable: Companies in this position do not enjoy the majority of the market share. Organizations have a number of competitors and have to work to differentiate themselves. In fact, any area of the market that they do appeal to is primarily based on a very idiosyncratic feature of their products and services that other companies in the industry do not have.
- Weak: These organizations see consistent decreases in the proportion of the market that they occupy in the industry. As such, these companies continually lose customers, and are therefore not very profitable.