Page 180 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Double or Quit

Though business prospects look attractive here the company’s competitive capabilities are weak.
Either invest more to exploit the prospects or, if not possible, better “exit” from the SBU.

Phased Withdrawal

Already covered in previous page.

Custodial

Here both competitive capabilities and business prospects are unattractive or average. Bear
with the situation with a little bit of help from the other product divisions or get out of the SBU
so as to focus more on other attractive businesses.

Try Harder

Here business prospects are attractive, but competitive capabilities are average; strengthen
their capabilities with infusion of additional resources.

Cash Generation

Here the SBU has strong competitive capabilities, but its business prospects are unattractive. Its
operations can be continued at least for generating cash flows and profits. However, further
investments cannot be made in view of unattractive business prospects.

Growth

Here the SBU has strong competitive capabilities, but its business prospects are average. This
SBU requires additional infusion of funds. This would help the SBU to grow.

Market Leadership

Here the SBU has strong capabilities, and its business prospects are also attractive. It must
receive top priority so that the SBU can retain its market leadership.
Arthur D Little Portfolio Matrix (ADL)

Arthur D Little Company’s matrix links the stages of the product life cycle with the business
strength. On the vertical axis, businesses are classified with respect to their business strength as
weak, tenable, favoured, strong or dominant. Along the horizontal axis, four steps in the product
life cycle, i.e. embryonic, growth, mature and decline are marked. This makes a four-by-five
matrix as shown in the Figure 9.8.

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