Flashcards on Arthur D. Little Matrix: Portfolio Analysis
Arthur D. Little Matrix: Comprehensive Portfolio Analysis Guide
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Portfolio Analysis Techniques
16 cards
Card 1
Question: What common aspects do all portfolio analysis techniques share?
Answer: They require strategic segmentation, use two axes (X and Y), divide axes into quadrants (4 or 9) for recommendations, graphically represent businesses
Card 2
Question: What is the general purpose of dividing axes into quadrants in portfolio analysis techniques?
Answer: To establish specific strategic recommendations for each quadrant by categorizing businesses according to the axes' variables.
Card 3
Question: In portfolio analysis charts, what does the size of a circle typically represent?
Answer: The relative importance of a business within the portfolio with respect to certain variables (e.g., revenue, market share).
Card 4
Question: How does the Arthur D. Little (ADL) Matrix differ from the Boston Consulting Group matrix?
Answer: ADL is more dynamic and multidimensional: it adapts better to specific business-unit or sector situations by considering multiple variables beyond mar
Card 5
Question: What are advantages of using the ADL Matrix?
Answer: It adapts to specific business or sector situations by considering variables beyond market share, uses the industry life cycle (more dynamic and relia
Card 6
Question: What are disadvantages of the ADL Matrix?
Answer: Axis variables can be difficult to assess and the method can introduce subjectivity.
Card 7
Question: List key variables considered for the 'competitive position' axis in the ADL Matrix.
Answer: Relative market share; mastery of essential capabilities; profit margin relative to competitors; activity costs; brand image and commercial implementa
Card 8
Question: List key variables considered for the 'sector maturity' axis in the ADL Matrix.
Answer: Sales growth rate; competitive environment (number of competitors, rivalry, bargaining power of customers/suppliers, substitutes, threat of new entran
Card 9
Question: What strategic recommendation is given for a Business Unit in a 'Dominant' competitive position during the 'Introduction' and 'Growth' stages?
Answer: Introduction: Efforts to achieve extra market share (before more competitors appear). Growth: Maintaining competitive position and increasing market s
Card 10
Question: What is the recommended strategy for a 'Dominant' unit in 'Maturity' and 'Decline'?
Answer: Maturity: Maintain and defend market share (growing with the sector) and maintain competitive position. Decline: Maintain market share (defensive stra