Ansoff Matrix vs. Other Growth Strategies: Which Works Best for Businesses?

Every business, whether it’s a multinational corporation or a startup, faces the same fundamental challenge: how to grow strategically. Companies need to decide whether to expand into new markets, create new products, or focus on improving what they already offer.

The Ansoff Matrix is one of the most widely used frameworks for guiding growth decisions. However, businesses also use other strategic models, such as Porter’s Generic Strategies, Blue Ocean Strategy, and the BCG Growth-Share Matrix. Each framework provides a different perspective on how companies can achieve sustainable expansion.

If you are studying business strategy, understanding these models is crucial. But more importantly, it is essential to know when to use each strategy and how they compare in real-world business scenarios.

In this blog post, we explore the Ansoff Matrix vs. other growth strategy frameworks and examine how Singaporean companies apply them to stay competitive.

Understanding the Ansoff Matrix

The Ansoff Matrix, developed by Igor Ansoff, provides four key growth strategies:

• Market Penetration: Expanding within an existing market with current products.
• Market Development: Entering new markets using existing products.
• Product Development: Creating new products for existing markets.
• Diversification: Entering entirely new markets with new products.

Companies use this model to assess growth opportunities while balancing risk and resource allocation. However, while the Ansoff Matrix focuses on where and how a company can expand, other strategic models offer different insights into business growth.

Ansoff Matrix vs. Porter’s Generic Strategies

Key Difference:

• Ansoff Matrix focuses on growth strategies (expanding markets or products).
• Porter’s Generic Strategies focus on competitive positioning (cost leadership, differentiation, or focus strategy).

Example: NTUC FairPrice

NTUC FairPrice, Singapore’s largest supermarket chain, uses a combination of both models:

• Market Penetration (Ansoff): Expanding store locations and offering promotions to increase customer loyalty in Singapore.
• Cost Leadership (Porter): Competing on price by offering lower-cost groceries through bulk purchasing and operational efficiency.

When to Use Ansoff vs. Porter:

• Use the Ansoff Matrix when deciding whether to expand into new markets or develop new products.
• Use Porter’s Generic Strategies to determine how to position the business competitively in those markets.

Ansoff Matrix vs. Blue Ocean Strategy

Key Difference:

• Ansoff Matrix assumes businesses operate in competitive markets and must expand within existing industry structures.
• Blue Ocean Strategy focuses on creating entirely new market spaces with little or no competition.

Example: Grab

Singapore-based Grab initially followed Market Development (Ansoff) by expanding its ride-hailing services beyond Malaysia and Singapore into Southeast Asia. However, it later applied Blue Ocean Strategy by:

• Expanding into food delivery (GrabFood) and digital banking (GrabPay)—services that disrupted traditional industries.
• Differentiating itself from competitors like Uber by offering localised services tailored to Southeast Asian markets.

When to Use Ansoff vs. Blue Ocean:

• Use the Ansoff Matrix if the goal is to expand within existing industries.
• Use Blue Ocean Strategy if the goal is to create a new market space with little direct competition.

Ansoff Matrix vs. BCG Growth-Share Matrix

Key Difference:

• Ansoff Matrix focuses on growth opportunities based on markets and products.
• BCG Growth-Share Matrix evaluates which business units or products deserve investment based on market share and market growth rate.

Example: Singtel

Singtel, Singapore’s leading telecommunications company, applies both frameworks:

• Market Development (Ansoff): Expanding into regional markets like Australia (Optus) and India (Airtel) to grow beyond Singapore.
• BCG Matrix Analysis: Evaluating its various business units, such as:
  • Cash Cow: Its core telco services, which generate stable revenue.
  • Stars: Investments in 5G technology and cybersecurity.
  • Question Marks: Digital ventures that may or may not succeed in the long term.

When to Use Ansoff vs. BCG Matrix:

• Use the Ansoff Matrix to decide how to expand into new markets or develop new products.
• Use the BCG Growth-Share Matrix to determine which business units or products deserve more investment.

Which Strategy Works Best?

Each model serves a different purpose:

• Ansoff Matrix is best for businesses looking for structured growth strategies.
• Porter’s Generic Strategies help companies position themselves competitively.
• Blue Ocean Strategy is useful for companies aiming to create new market spaces rather than compete directly.
• BCG Growth-Share Matrix is valuable for companies managing multiple products or business units and deciding where to invest resources.

The best approach depends on the company’s goals, industry, and competitive landscape.

Final Thoughts

There is no one-size-fits-all growth strategy. While the Ansoff Matrix provides a structured way to expand, businesses often combine it with other strategic models to make more informed decisions.

For university students studying business strategy:

• Understand when to use the Ansoff Matrix vs. other frameworks.
• Apply real-world examples to demonstrate strategic thinking in assignments.
• Recognise that businesses rarely rely on just one model—strategic decisions involve multiple factors.

By mastering these frameworks and knowing how and when to apply them, you will be better equipped to analyse business growth strategies effectively.