Have a stunning day. Our goal for today is to continue with the topic of the ADL Matrix. In our next post, we will proceed to do our own personal critique of this model.

Have you perceived again that the month of October is almost over, and what is more extraordinary, how time flies? We are heading toward Christmas time. And, unbelievable or not, we have been living, globally, for almost two years, under a sanitary crisis, that still has not been able be eradicated yet. We truly hope the COVID19 vaccines designed to keep us alive may not affect our humanity under long-term circumstances. We sincerely pray for that, because many of us decided to trust the vaccine’s immunization, as it is our case, regardless of the type of vaccine and the risks of the unknown for the long-term with them.

Foreigner. We were also teenagers then. Last week we uploaded a comparison of two Youtube videos interpreted by the band Foreigner. As a mature professional, I am trying to put myself in the shoes of those who are now teenagers. So, I am using examples of the music that we, as the new cohort of global decision-makers listened to when we were teenagers too. I am putting myself in the shoes of those who are now between 12 to 19 years old, by showing you that we were also teens, and we experienced the same feelings, expectations, rejection of the status-quo rules, hopes, and troubles of a teen then.

The whole purpose of displaying our Generation X teen music (as examples for this saga) is to make you think. To reflect through music, through painting, through art. Foreigner piece “Say you will” was set on the table for you to compare the music arrangement under two completely different formats. The first one, interpreted by the basic instruments of the band; and the second one, 30 years later, with the addition of a symphonic orchestra and a choir. Which do you like the most? It is up to each personal choice. As I mentioned previously, we are simply trying to offer new and simple elements of counterweight direction for supporting how art has been made for centuries in our effort to save it. Art was made happily and extraordinarily without the recent disruptive technologies that are now substituting humans´ creations. We are pro-anthropologically human when it comes to music made with traditional instruments. We recognize that if we don´t support it, music (and any form of art) played with tangible traditional instruments will disappear because it will be substituted by keyboards playing under software as has happened since the 2000 decade. Symphonic rock is an example of an exquisite blend between the ancient quality of symphonic orchestra with true rock band instruments, and this intermingled solution can be applied to every single type of music genre. Moreover, the interpretation of any music genre using truly true instruments is a superb delicate ode to the homo sapiens creation, and we must celebrate it, keep it, protect it, and promote it, regardless of the vicissitudes and deviations of our technologies in the human timeline. Eleonora Escalante Strategy will continue provoking thoughtful reflection about these matters, always.

Data is adulterated and unclean. Last week a reader contacted me, complaining why it is so time-consuming to have reliable data taken from the Internet nowadays. We suggested to him that each tool that we show here is easy to calculate and draw using Excel or using business intelligence software, but the big issue is with what info are we filling in. Information is polluted, it is not correctly gathered, it is changeable, and many times invented at the government or companies´ bureaus, or simulated incorrectly. Each industry association and company is on duty to clean it for the sake of its peers. Just to clean all this mess will take years. Even the most experienced consulting house with decades of reasonable databases custody recognize how hard it is to manage trustworthy information. A year is the minimum reasonable period for us to at least try to acquire consistent and steadfast information for getting critical factors right, particularly in the context of dynamic settings as we live right now.

ADL strategic condition model explained. Last Friday we left the Arthur D. Little matrix unfinished. In consequence, alors, let´s start. Look again to the ADL matrix below:

Today, we will offer a basic explanation of the ADL matrix, as it was conceived, and as it has been taught in business schools´ corporate strategy or marketing strategy courses. Then, next Friday, we will proceed with our critique by means of our integrated strategy philosophy.

Last week we explained that the X-axis of this matrix represents the life cycle in 4 stages: Embryonic (our lovely Eleonora Escalante Strategy start-up is located here), growth, mature and aging. In order to categorize the factors for each stage of the industry life-cycle, we would like you to refresh the chapter about this topic that I wrote during the Strategy regatta that we participated in, at the Volvo Ocean Race 2017-2018. We offer the following URL: Industry structure, competition, and key success factors over the life-cycle.

Critical factors considered to determine the position of the SBU in the life-cycle are demand, technology diffusion when it comes to product innovation, manufacture and production characteristics, locational shifts and global trade, type and intensity of competition, resources, and capabilities adaptation to change, etc. Look at the life cycle below:

The Y-axis offers 5 quadrants: weak, tenable (or acceptable with minimum canons), favorable, strong, and dominant. Here we go to describe them (1).

1. Weak: At this low level, SBUs performance are generally unsatisfactory, even if market opportunities exist. However, when an SBU is in this bottom rank, it is either because the SBU is too big and inefficient in terms of competitiveness. Or is too small to cope with the competitive pressures of the rest of participants in the same industry.
2. Tenable: A tenable SBU is that one that is capable or being held or maintained because it complies with the minimum requirements to pass. For example, a tenable student is the one that passes with the minimum 6.0 required to continue in the academic entity.  In the case of the SBUs, although these can remain in this category, and can justify their existence, these SBUs are vulnerable because of increased competition, and they require to innovate with tenacity, and are best suitable for opportunities if certain degree of specialization is applied.
3. Favorable: This is the row of those with a bit more than the average. The SBU that is plotted in any of the quadrants of this position are usually there because all the market participants do have reasonable degree of freedom, and no competitor stands out clearly above the other one. It is a blessing to be here, particularly if the SBU is profitable. Because there is a greater than average possibility to increase market share with persistent business strategies. What we don´t like about this competitive position is the recipe of ADL Matrix to attack small competitors and to continue doing cost cutting in detriment of the industry. Wait for our critique about this model in our next publication.
4. Strong: The stronger the SBU in its respective industry and competitive position (regardless the stage of the life cycle), the better it is to have freedom of choice. These companies are able to act in choosing different corporate and business strategies, because these have a space of maneuvering that no competitor can affect.
5. Dominant: This position was always difficult to reach, until the decade of the 2000s. With the arising of new disruptive technologies, and particularly after the appearance of the Iphone (2008), the technological industries of NAIQIs _{(Nanotechnology, Artificial Intelligence, Quantum Supremacy and the Internet all together)} presented a breeding ground of monopoly and market dominance all over us. For example: the lack of regulation and global adoption of the products and services coming from the 5 big techs with market value above 1 trillion dollars _{(as of Sept 2021)}:  Apple Inc. ($2.35 trillion), Microsoft Corp. ($2.2 trillion); Alphabet Inc. ($1.85 trillion); Amazon.com Inc. ($1.7 trillion) and Facebook Inc. ($1 trillion). These companies all together have been able to influence the behavior of the whole way of doing business everywhere. This is affecting every single industry on earth, because we are being pushed to accept that it is normal to replace humans with technologies for the sake of productivity and efficiency. And this is and will be extremely dangerous for the next generations. The good regulation that can stop the dominant position of NAIQIs is based in DBR (Design-Based Research) academic and scientific investigation results. And science-academics is way back behind in how provide a counterweight or counterbalance to the risks associated with the excessive usage of disruptive technologies. We just recently woke up to realize how important is to counterweight in these matters.

If you wish to download the slides, please click here:

Our song for today is from Bon Jovi: “Living on a prayer”. Again, today we will stand in our position as Generation X teenagers (I was 16 years old when Bon Jovi composed it), sharing three musical videos, of the same song: the original one from 1986; the symphonic one performed by the Royal Philharmonic Orchestra, and the Rock´n Mob version performed by 270 musicians gathered at Gorki Park a couple of years ago. Which background is simply above all the best in terms of quality and excellence, and which do you like the most?

Blessings and see you again soon. We will continue next Friday. Thank you for reading to me.

Sources of reference utilized today:

(1) https://www.routledge.com/Strategic-Marketing-Planning/Gilligan-Wilson/p/book/9781856176170

(2) Tudor, Ionescu Florin; Valeriu, Curmel “Product Portfolio Analysis-Arthur D. Little Matrix”. Bucharest Academy of Economic Studies, Marketing Faculty. https://www.researchgate.net/publication/227462822_PRODUCT_PORTFOLIO_ANALYSIS_-_ARTHUR_D_LITTLE_MATRIX

Disclaimer: Illustrations in Watercolor are painted by Eleonora Escalante. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. Nevertheless, the majority of the pictures, images, or videos shown on this blog are not mine. I do not own any of the lovely photos or images posted unless otherwise stated

Published by eleonoraescalantestrategy

Corporate Strategy Artist, San Salvador, El Salvador View all posts by eleonoraescalantestrategy