Mintzberg’s 5 P’s of Strategy
Strategy is an extremely complicated and dynamic thing. A great strategy one day could be useless the next, depending on market forces and changes that are outside of your control. Great businesses are always adapting, and that means changing strategy frequently to meet with your needs. While it is great to develop an initial, overall strategy for your business when first getting started, it is unlikely that your chosen strategy is going to last very long. In reality, you will likely need to make many changes along the way if you are going to find your way toward success.
With the understanding that strategy needs to change regularly in business, it is a good idea to turn to a model such as Mintzberg’s 5 P’s of Strategy for assistance. This model, as the name would indicate, includes five different approaches to strategy (each beginning with the letter ‘p’, which makes them easier to remember). In the content below, we are going to take a quick look at each of the 5 P’s.
This is probably where you will naturally start out when thinking about strategy. You will think about producing a plan for your company, which is going to take you from where you are now to where you would like to be in the future. For instance, your strategic plan could include such basics as the products you are going to sell, how you are going to produce those products, and how much they will cost at market. Basic business planning can be thought of as the foundation of a good strategy – it is a great platform to start from, but it is not going to get you all the way to the ‘promised land’.
In this part of strategy, your thinking is going to turn to your competition. There is no way to ignore competition in business – it is always going to be there, and it is always going to have a profound effect in what you can do. You can use a specific ploy to disrupt whatever it is that your competition might be doing to seek out a competitive advantage over you in the market (only in a legal manner, of course). By trying to think one step ahead of the competition, you may be able to take control of your market segment for years to come.
You have to be careful with strategic ploys, however, as they have the potential to distract you from mastering your own business. It would be a mistake to focus so much on your competition that you fail to product quality products or services that you can take to market. Use a strategy ploy or two is part of good business, but make sure the focus remains on your own operation at the same time.
The pattern part of this strategic model is all about noticing what is going on in your business currently so that you can leverage those patterns into future success.
In other words, you are going to figure out exactly what has been working for you by looking to the past, and then you are going to think of ways to continue (or even enhance) those patterns. Often, this kind of strategy isn’t so much intentional as it is accidental. You might be surprised by a pattern that develops in the market, but you can do your best to take advantage of that pattern once it has revealed itself.
It would be a serious mistake to interrupt a current pattern that is benefitting your business simply because it was not part of an original strategy or plan. This is a great example of why it is important to remain flexible and to always be willing to alter your strategy going forward. If a profitable pattern comes to the forefront through the course of regular business, you would be crazy to fight it – rather, you should identify it and then leverage it as much as possible going forward.
All businesses have to fight for position in the marketplace. How are you going to carve out a piece of the market for yourself? Are you going to play in a big market against the big names, or are you going to fight for the top spot in a niche market? There are pros and cons to each approach, and this is just one potential debate as far as positioning is concerned. You can also think about positioning in terms of your method of sales, the quality of product you are going to offer, the price point you are going to compete at, and more. Rather than falling into the market accidentally, your positioning should be very much intentional and strategic in nature, and it should be based on careful market research and projections.
Every business comes at the market from their own unique perspective. For example, you might run a business that is focused on making a classic product that has been for sale for many years – meaning rather than innovation, your perspective on business is one of quality, execution, and cost control. On the other hand, if you are trying to bring new ideas to the market, you will have a perspective and culture that is geared in that direction instead.
A big part of successful strategy is identifying exactly what your perspective on the market is going to be so you can gear all of your decisions to match that concept.
There are many benefits to using Mintzberg’s 5 P’s of Strategy. Not only can this model help you get a good handle on your strategy right up front, but it can also force you to think through a variety of different angles that you may not have considered otherwise. Once you understand how each of the 5 P’s influences your strategic business decisions, you can use them to help you steer the organization toward a prosperous future.
- Mintzberg suggests there are five ways in which the term ‘strategy’ is used. These are called his ‘5Ps for Strategy’. Strategy can mean any of the following:
- Strategy as Plan: The strategy is made in advance of its implementation and is followed up by actual implementation and development.
- Strategy as Ploy: This is a specific manoeuvre intended to outperform a competitor.
- Strategy as Pattern: Strategy ca sometimes be explained in terms of a pattern that emerged rather than something that was preplanned.
- Strategy as Position: This is represented by finding a niche, providing distinctive product, or by exploiting existing competences to deter competitors.
- Strategy as Perspective: This refers organisational culture as strategy can be a result of the way a company views itself.