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Product Portfolio Analysis - Arthur D. Little Matrix

Author

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  • Ionescu Florin Tudor

    (Academia de Studii Economice din BucureÅŸti, Marketing)

  • Curmei Catalin Valeriu

    (Academia de Studii Economice din BucureÅŸti, Marketing)

Abstract

In recent decades we have witnessed an unseen dynamism among companies, which is explained by their desire to engage in more activities that provide a high level of development and diversification. Thus, as companies are diversifying more and more, their managers confront a number of challenges arising from the management of resources for the product portfolio and the low level of resources with which companies can identify, at a time. Responding to these challenges, over time were developed a series of analytical product portfolio methods through which managers can balance the sources of cash flows from the multiple products and also can identify the place and role of products, in strategic terms, within the product portfolio. In order to identify these methods the authors of the present paper have conducted a desk research in order to analyze the strategic marketing and management literature of the last 2 decades. Widely were studied a series of methods that are presented in the marketing and management literature as the main instruments used within the product portfolio strategic planning process. Among these methods we focused on the Arthur D. Little matrix. Thus the present paper has the purpose to outline the characteristics and strategic implications of the ADL matrix within a companyâ€(tm)s product portfolio. After conducting this analysis we have found that restricting the product portfolio analysis to the A.D.L. matrix is not a very wise decision. The A.D.L. matrix among with other marketing tools of product portfolio analysis have some advantages and disadvantages and is trying to provide, at a time, a specific diagnosis of a companyâ€(tm)s product portfolio. Therefore, the recommendation for the Romanian managers consists in a combined use of a wide range of tools and techniques for product portfolio analysis. This leads to a better understanding of the whole mix of product markets, included in portfolio analysis, the strategic position held by each product within a market, the performance potential of product portfolio and the financial aspects related to the resource allocation process for the products within the portfolio. It should also be noted that the tools and techniques specific to product portfolio analysis do not give accurate answers, despite the appearances created by the analysis stage, where the products are plotted rigorously. However, their main virtue is simplicity, as these highlight the managersâ€(tm) need for further investigations.

Suggested Citation

  • Ionescu Florin Tudor & Curmei Catalin Valeriu, 2011. "Product Portfolio Analysis - Arthur D. Little Matrix," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 754-760, July.
  • Handle: RePEc:ora:journl:v:1:y:2011:i:1:p:754-760
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    More about this item

    Keywords

    product portfolio; ADL matrix; life cycle; competitive position; strategic analysis;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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