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Mintzberg's 5 Ps of Strategy Developing a Better Strategy

Learn about these five strategy definitions. iStoc photo! "ai#on "hat's your approach to developing strategy$ Many of us brainstor% opportunities& and then plan ho' 'e'll ta e advantage of the%. (nfortunately& 'hile this type of approach is i%portant& 'e need to thin about %uch %ore than this if 'e 'ant to be successful. )fter all& there's no point in developing a strategy that ignores co%petitors' reactions& or doesn't consider the culture and capabilities of your organization. )nd it 'ould be 'asteful not to %a e full use of your co%pany's strengths * 'hether these are obvious or not. Manage%ent e+pert& ,enry Mintzberg& argued that it's really hard to get strategy right. -o help us thin about it in %ore depth& he developed his 5 Ps of Strategy * five different definitions of .or approaches to/ developing strategy. )bout the 5 Ps Mintzberg first 'rote about the 5 Ps of Strategy in 0123. 4ach of the 5 Ps is a different approach to strategy. -hey are5 0. 6. 7. 8. 5. Plan. Ploy. Pattern. Position. Perspective. By understanding each P& you can develop a robust business strategy that ta es full advantage of your organization's strengths and capabilities. 9n this article& 'e'll e+plore the 5 Ps in %ore detail& and 'e'll loo at tools that you can use in each area. 0. Strategy as a Plan Planning is so%ething that %any %anagers are happy 'ith& and it's so%ething that co%es naturally to us. )s such& this is the default& auto%atic approach that 'e adopt * brainstor%ing options and planning ho' to deliver the%. -his is fine& and planning is an essential part of the strategy for%ulation process. :ur articles on PEST Analysis & SWOT Analysis and Brainstorming help you thin about and identify opportunities; the article on practical business planning loo s at the planning process in %ore detail; and our sections on change management and project management teach the s ills you need to deliver the strategic plan in detail. -he proble% 'ith planning& ho'ever& is that it's not enough on its o'n. -his is 'here the other four Ps co%e into play. 6. Strategy as Ploy Mintzberg says that getting the better of co%petitors& by plotting to disrupt& dissuade& discourage& or other'ise influence the%& can be part of a strategy. -his is 'here strategy can be a ploy& as 'ell as a plan. <or e+a%ple& a grocery chain %ight threaten to e+pand a store& so that a co%petitor doesn't %ove into the sa%e area; or a teleco%%unications co%pany %ight buy up patents that a co%petitor could potentially use to launch a rival product.

,ere& techni=ues and tools such as the Futures Wheel & Impact Analysis and Scenario Analysis can help you e+plore the possible future scenarios in 'hich co%petition 'ill occur. :ur article on Game Theory then gives you po'erful tools for %apping out ho' the co%petitive >ga%e> is li ely to unfold& so that you can set yourself up to 'in it. 7. Strategy as Pattern Strategic plans and ploys are both deliberate e+ercises. So%eti%es& ho'ever& strategy e%erges fro% past organizational behavior. ?ather than being an intentional choice& a consistent and successful 'ay of doing business can develop into a strategy. <or instance& i%agine a %anager 'ho %a es decisions that further enhance an already highly responsive custo%er support process. Despite not deliberately choosing to build a strategic advantage& his pattern of actions nevertheless creates one. -o use this ele%ent of the 5 Ps& ta e note of the patterns you see in your tea% and organization. -hen& as yourself 'hether these patterns have beco%e an i%plicit part of your strategy; and thin about the i%pact these patterns should have on ho' you approach strategic planning. -ools such as USP Analysis and ore ompetence Analysis can help you 'ith this. ) related tool& @?9: )nalysis& can help you e+plore resources and assets .rather than patterns/ that you should focus on 'hen thin ing about strategy. 8. Strategy as Position >Position> is another 'ay to define strategy * that is& ho' you decide to position yourself in the %ar etplace. 9n this 'ay& strategy helps you e+plore the fit bet'een your organization and your environ%ent& and it helps you develop a sustainable competiti!e a"!antage . <or e+a%ple& your strategy %ight include developing a niche product to avoid co%petition& or choosing to position yourself a%ongst a variety of co%petitors& 'hile loo ing for 'ays to differentiate your services. "hen you thin about your strategic position& it helps to understand your organization's >bigger picture> in relation to e+ternal factors. -o do this& use PEST Analysis & Porter#s $iamon" & and Porter#s Fi!e Forces to analyze your environ%ent * these tools 'ill sho' 'here you have a strong position& and 'here you %ay have issues. )s 'ith >Strategy as a Pattern&> ore ompetence Analysis & USP Analysis & and %&IO Analysis can help you craft a successful co%petitive position. Aou can also use SWOT Analysis to identify 'hat you do 'ell& and to uncover opportunities. Bote5 -here can be a lot of overlap bet'een >Strategy as Position> and other ele%ents of the 5 Ps. <or instance& you can also achieve a desired position through planning& and by using a ploy. Don't 'orry about these overlaps * Cust get as %uch value as you can fro% the different approaches. 5. Strategy as Perspective -he choices an organization %a es about its strategy rely heavily on its culture * Cust as patterns of behavior can e%erge as strategy& patterns of thin ing 'ill shape an organization's perspective& and the things that it is able to do 'ell. <or instance& an organization that encourages ris Dta ing and innovation fro% e%ployees %ight focus on co%ing up 'ith innovative products as the %ain thrust behind its strategy. By contrast& an organization that e%phasizes the reliable processing of data %ay follo' a strategy of offering these services to other organizations under outsourcing arrange%ents. -o get an insight into your organization's perspective& use cultural analysis tools li e the ultural Web & $eal an" 'enne"y#s ultural (o"el & and the ongruence (o"el . (sing the 5 Ps 9nstead of trying to use the 5 Ps as a process to follo' 'hile developing strategy& thin of the% as a variety of vie'points that you should consider 'hile developing a robust and successful strategy. )s such& there are three points in the strategic planning process 'here it's particularly helpful to use the 5 Ps5 0. 6. 7. "hen you're gathering infor%ation and conducting the analysis needed for strategy develop%ent& as a 'ay of ensuring that you've considered everything relevant. "hen you've co%e up 'ith initial ideas& as a 'ay of testing that that they're realistic& practical and robust. )s a final chec on the strategy that you've developed& to flush out inconsistencies and things that %ay not have been fully considered. (sing Mintzberg's 5 Ps at these points 'ill highlight proble%s that 'ould other'ise under%ine the i%ple%entation of your strategy. )fter all& it's %uch better to identify these proble%s at the planning stage than it is to find out about the% after you've spent several years * and %illions of dollars * i%ple%enting a plan that 'as fla'ed fro% the start. Eey Points

-he 5 Ps of Strategy 'ere created by ,enry Mintzberg in 0123. 4ach of the 5 Ps stands for a different approach to strategy5 0. 6. 7. 8. 5. Plan. Ploy. Pattern. Position. Perspective. )s a Plan& strategy needs to be developed in advance and 'ith purpose. )s a Ploy& strategy is a %eans of outs%arting the co%petition. "ith strategy as a Pattern& 'e learn to appreciate that 'hat 'as successful in the past can lead to success in the future. "ith Position& strategy is about ho' the organization relates to its co%petitive environ%ent& and 'hat it can do to %a e its products uni=ue in the %ar etplace. Perspective e%phasizes the substantial influence that organizational culture and collective thin ing can have on strategic decision %a ing 'ithin a co%pany. (nderstanding and using each ele%ent helps you develop a robust& practical and achievable business strategy. This site teaches you the skills you need for a happy and successful career; and this is just one of many tools and resources that you'll find here at (in" Tools. Click here for more, subscribe to our )ree ne*sletter, or become a member for just $1. - See more at http !!""".mindtools.com!pa#es!article!mint$ber#-%ps.htm&sthash.r'())d*+.dpuf

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A small tribute to Henry Mintzberg by Fred Creedon University College Cork BISPhD

Five Ps !or Strategy

Posted on January 11, 2012

In order to hel# to develo# understanding o! strategy Mintzberg develo#ed $hat is kno$n as the % Ps o! Strategy& 'hese are( Strategy as Plan Strategy as Intended Pattern Strategy as )mergent*Unintended Pattern Strategy as Position Strategy as Pers#e+tive Strategy as Plan Mintzberg de!ined this as some sort of consciously intended course of action, a guideline (or set of guidelines) to deal with a situation. The example of ame Theory where Strategy is a +om#lete #lan( a #lan $hi+h s#e+i!ies $hat +hoi+es ,the #layer- $ill make in every #ossible situation& Strategy as Pattern

Mintzberg de!ines strategy as consistency in !eha"ior, whether or not intended. Strategy may also emerge as #atterns. $hi+h +an be seen as the resulting a+tions& For e/am#le $hen Henry Ford originally develo#ed the Model '. the strategy $as to only o!!er the +ar in the +olor bla+k. by strategy as a #attern. this $as an intended strategy& An e/am#le o! an unintended strategy as #attern +an be seen $ith ho$ Ikea began to !lat #a+k their !urniture. the original idea !or this $as borne o! one o! the +om#anies designers trying to load a table into their +ar. $hen they realised that it $ouldn0t !it and they $ould have to remove the legs o! the table. they realised that +ustomers $ould !a+e the same issue $hen #ur+hasing the #rodu+t. and as su+h a vital as#e+t o! Ikea0s strategy emerged unintentionally&

Strategy as Position Strategy as a #osition re!ers to the environment in $hi+h the organisation o#erates in and the mediating !or+e bet$een the internal and e/ternal +onte/t& )/am#les o! this may be an organisations strategy to$ards dealing $ith environmental !a+tors su+h as e/treme heat. dis#osal o! $aste. use o! green I'& Strategy as Pers#e+tive 'his as#e+t o! strategy is +on+erned $ith ho$ the organisation itsel! sees the business environment& For e/am#le an organisation may de+ide to be the #a+esetters. al$ays at the bleeding edge o! te+hnology and may sell their #rodu+ts based on te+hnologi+al advan+es& Another organisation may de+ide to be !ollo$ers $here they learn !rom the mistakes o! the #a+e setter and only ado#t #roven te+hnologies and may be more +on+erned $ith 1uality and reliability rather than bleeding edge te+hnology& )/am#les o! this in the automotive industry +an be seen in ho$ Ford have re+ently began the market the ne$ Ford Fo+us as the te+hnologi+al leader in the #rodu+t +ategory& By using Ford0s e+onomies o! s+ale Ford have been able to +hea#ly introdu+e te+hnologies su+h as Sel!2Parking. a te+hnology asso+iated $ith #remium brands rather than Ford an auto manu!a+turer that traditionally targets blue2+ollar $orkers Con+lusion By intordu+ing these de!initions o! strategy Mintzberg is able to #rovide a dee# understanding o! some o! the !undamental as#e+ts o! strategy& 3hile these de!initiosn may seem to be +on+erned $ith vastly di!!erent areas. Mintzberg also sho$s that the % Ps +an also be interrelated& 3hile there are many $ays on $hi+h the di!!erent de!initions +an intera+t Mintzberg states that no relationshi# takes #re+edent over the others& Mintzberg !inishes by stating that $hile strategy is

not #ust a notion of how to deal with an enemy or a set pf competitiors or a mar$et. %t also draws us into some of the most fundamental issues a!out organi&ations as instruments for collecti"e perception and action. 'y explicating and using fi"e definitions, we may !e a!le to remo"e some of this confusion, and there!y enrich our a!ility to understand and manage the processes !y which strategies form.