Mintzberg’s ( Five )5Ps of strategy
- Henry Mintzberg (pictured above,) Bruce Ahlstrand and Joseph Lampell, in their 2005 book “Strategy Bites Back”, present 5 “P’s” as a way to define strategy. Each “P” shines a spotlight on what strategy is / means / encompasses from a different angle, to provide a comprehensive overview that is probably more useful than definitions that try to fit all into a couple of sentences.
- Henry Mintzberg, in his book, points out that people use “Strategy” in several different ways, the most common being these five:
- Strategy is a Plan, a “how,” a means of getting from here to there.
- A strategy can be a Ploy too; really just a specific manoeuvre intended to outwit an opponent or competitor.
- Strategy is a Pattern in actions over time; for example, a company that regularly markets very expensive products is using a “high end” strategy.
- Strategy is Position; that is, it reflects decisions to offer particular products or services in particular markets.
- Strategy is Perspective, that is, vision and direction.
Strategy is a PLAN
- A carefully crafted set of steps that a firm intend to follow in order to be successful
- strategy is a plan – some sort of consciously intended course of action, a guideline (or set of guidelines) to deal with a situation
- By this definition, strategies have two essential characteristics: they are developed consciously and purposefully
A kid has a “strategy” to get over a fence;
a firm has one to dominate a market for a particular service or practice area.
Strategy as a PLOY:
- Strategy can be a ploy, too, which is really just a specific “manoeuvre” intended to outwit or trick an opponent or competitor.
- Ploys often involve using creativity to enhance success
- Mintzberg says that getting the better of competitors, by plotting to disrupt, dissuade, discourage, or otherwise influence them, can be part of a strategy. This is where strategy can be a ploy, as well as a plan.
Example: The kid may use the fence as a ploy to draw a bully into his yard, where his Doberman Pincher awaits intruders.
- Likewise, a firm may threaten to establish a new practice area in order to discourage a competitor from trying to do the same. Here the real strategy (as plan, that is, the real intention) is the threat, not the new practice area itself, and as such is a ploy. Threatened litigation often falls into this category.
a grocery chain might threaten to expand a store, so that a competitor doesn’t move into the same area;
or a telecommunications company might buy up patents that a competitor could potentially use to launch a rival product.
Ploys can be especially beneficial in the face of much stronger opponents. Military history offers quite a few illustrative examples. Before the American Revolution, land battles were usually fought by two opposing armies, each of which wore brightly colored clothing, marching toward each other across open fields. George Washington and his officers knew that the United States could not possibly defeat better-trained and better-equipped British forces in a traditional battle. To overcome its weaknesses, the American military relied on ambushes, hit-and-run attacks, and other guerilla moves. It even broke an unwritten rule of war by targeting British officers during skirmishes. This was an effort to reduce the opponent’s effectiveness by removing its leadership.
3. Strategy as a Pattern:
- The degree of consistency in a firm’s strategic action.
- This view focuses on the extent to which a firm’s actions over time are consistent. A lack of a strategic pattern in plan and action may result in lag behind in competition.
- Sometimes, however Strategic plans and ploys are both deliberate exercise, strategy emerges from past organizational behavior. Rather than being an intentional choice, a consistent and successful way of doing business can develop into a strategy.
- strategy is also a pattern – specifically, a pattern in a stream of actions. By this definition, strategy is consistent in behaviour, whether or not intended. The outcome of strategy does not derive from the design, or plan, but from the action that is taken as a result.
- For instance, imagine a manager who makes decisions that further enhance an already highly responsive customer support process. Despite not deliberately choosing to build a strategic advantage, his pattern of actions nevertheless creates one.
- In contrast, Apple is very consistent in its strategic pattern: It always responds to competitive challenges by innovating. Some of these innovations are complete busts.
4. Strategy as a POSITION:
- strategy as position refers to a firm’s place in the industry relative to its competitors
- “Position” is another way to define strategy – that is, how you decide to position yourself in the marketplace. In this way, strategy helps you explore the fit between your organization and your environment, and it helps you develop a sustainable competitive advantage.
- For example, your strategy might include developing a niche product to avoid competition, or choosing to position yourself amongst a variety of competitors, while looking for ways to differentiate your services.
- McDonald’s, for example, has long been and remains the clear leader among fast-food chains. This position offers both good and bad aspects for McDonald’s. One advantage of leading an industry is that many customers are familiar with and loyal to leaders. Being the market leader, however, also makes McDonald’s a target for rivals such as Burger King, KFC and Wendy’s. These firms create their strategies with McDonald’s as a primary concern.
Strategy is a PERSPECTIVE…
- Because each person is unique, two different executives could look at the same event differently—such as a new competitor emerging—and attach different meanings to it. One might just see a new threat to his or her firm’s sales; the other might view the newcomer as a potential ally.
- Executives who adopt unique and positive perspectives can lead firms to find and exploit opportunities that others simply
- In the mid-1990s, the Internet was mainly a communication tool for academics and government agencies. Jeff Bezos looked beyond these functions and viewed the Internet as a potential sales channel. After examining a number of different markets that he might enter using the Internet, Bezos saw strong profit potential in the bookselling business, and he began selling books online. Today, the company he created—Amazon—has expanded far beyond its original focus on books to become a dominant retailer in countless different markets.
- The Plan provides the roadmap by which the firm intends to achieve its goals.
- Ploys add a dimension of feint and manoeuvre, where one firm’s gain is another’s loss and competitive advantage is critical.
- Pattern emphasizes that strategy is not a once-off event but a constant stream of decisions and resultant actions that drive the firm forward, over time, towards its goal.
- Position adds that different firms have different mixes of markets, clients and services that they provide to those clients.
- Finally Perspective provides an insight onto how the firm and its strategists are informed by their own professions, their perceptions of business, and the unique characteristics of each firms own “world.”