The five different definitions of strategy, as proposed by Henry Mintzberg, are Plan, Ploy, Pattern, Position, and Perspective. These are often referred to as the "5 Ps of Strategy."
The Mintzberg 5 Ps of Strategy Explained
Mintzberg's 5 Ps offer a comprehensive framework for understanding the multifaceted nature of strategy. They are not mutually exclusive, and effective strategies often incorporate elements of several or all of them.
1. Strategy as Plan
- Definition: A consciously intended course of action, a guideline or set of guidelines to deal with a situation. It is developed in advance and deliberately.
- Explanation: This is the most common and traditional definition of strategy. It involves carefully analyzing the environment, setting objectives, and formulating a detailed plan to achieve those objectives.
- Example: A company's business plan outlining its market entry strategy, including target customers, marketing activities, and sales projections.
2. Strategy as Ploy
- Definition: A specific maneuver intended to outwit a competitor. It is often a short-term tactic as part of a larger plan or independent of one.
- Explanation: This definition focuses on strategy as a trick or maneuver designed to gain an advantage over rivals, often involving deception or surprise.
- Example: A company lowering its prices temporarily below cost to drive a competitor out of business, or announcing a fictitious product to deter competitors from entering a specific market.
3. Strategy as Pattern
- Definition: A consistent stream of actions or decisions, whether intended or not. It is strategy realized over time.
- Explanation: This perspective emphasizes that strategy can emerge from past behavior and decisions, even if those actions were not initially part of a grand plan. It looks at what the organization actually does, not just what it intends to do.
- Example: A company that consistently focuses on customer service, leading to a reputation for excellence, even if there was no formal "customer service strategy" documented initially.
4. Strategy as Position
- Definition: Locating particular products in particular markets. Finding a niche in the environment.
- Explanation: This definition sees strategy as a way of positioning the organization within its external environment to gain a sustainable competitive advantage.
- Example: A company that positions itself as the low-cost provider in a particular market segment, or a brand that carves out a niche as a luxury provider within a competitive industry.
5. Strategy as Perspective
- Definition: An organization's fundamental way of doing things, a shared understanding or mindset that shapes its behavior.
- Explanation: This is the most abstract of the five Ps. Strategy as perspective embodies the organization's ingrained way of perceiving the world and acting accordingly. This includes organizational culture.
- Example: A company with a strong entrepreneurial culture that constantly seeks out new opportunities and challenges the status quo, or an organization with a strong emphasis on environmental sustainability, which permeates all its decisions and actions.
In conclusion, Mintzberg's 5 Ps of Strategy provide a useful framework for understanding the different ways in which strategy can be conceptualized and implemented. By considering all five Ps, organizations can develop more robust and adaptable strategies that are better aligned with their goals and environment.
