Mintzberg 5‘P’s of Strategy

STRATEGY

A strategy is a long term plan of action designed to achieve a particular goal.

The word derives from the Greek word stratēgos, which derives from two words: stratos (army) and ago (ancient Greek for leading). Stratēgos referred to a 'military commander' during the age of Athenia Democracy.

APPROACHES TO STRATEGY Henry Mintzberg Peter Schwartz Margaret J. Wheatley   Harold A. Linstone

MINZBERG SAY’SHenry Mintzberg, in his book, The Rise

and Fall of Strategic Planning , 1994, points out that "strategy" is used in several different ways, the most common being :

1. Strategy is a plan, a "how," a means of getting from here to there.

2. Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a "high end" strategy.

3. Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets.

4. Strategy is perspective, that is, vision and direction.

5 P’s

Plan

Position Pattern

Perspective Ploy

THE 5P’s

PLAN

It is a set 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:

1) They are made in advance of the actions to which they apply

2) They are developed consciously and purposefully.

PLOY

It is a specific manoeuvre intended to outwit an opponent or competitor.

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.

PATTERN

A pattern is a stream of actions. Defining strategy is incomplete and needs an

outline that encompasses the resulting behavior.

The outcome of strategy does not derive from the design, or plan, but from the action that is taken as a result.

A pattern makes a strategy consistent in behavior, whether or not intended.

POSITION

Position implies a specific means of locating a firm in its environment.

In management terms: a "domain" consisting of a particular combination of services, clients and markets.

Position is defined competitively.

PERSPECTIVE

Perspective looks inward into the firm. Strategy is a perspective shared by members

of an organisation, through their intentions and / or by their actions.

In effect, when we talk of strategy in this context, we are entering the realm of the collective mind - individuals united by common thinking and / or behaviour.

CASE Honda is now the leading manufacturers of motorbikes.

The company is credited with identifying and targeting an untapped market for small 50cc bikes in the US, which, enabled it to expand, trounce European competition and severely damage indigenous US bike manufacturers.

By 1965, Honda had covered 63% of the US market. On entering the US market, Honda’s planned strategy

was to compete with the larger European and US bikes of 250ccs and over. These bikes had a defined market, and sold through dedicated motorbike dealerships

Disaster struck when Honda’s larger machines developed faults - they had not been designed for the hard wear and tear imposed by US motorcyclists.

Honda had to recall the larger machines. Honda had made little effort to sell its small 50 cc motorbikes-its staff rode them errands around Los Angeles.

Sports goods shops and ordinary bicycle and department stores had expressed an interest, but Honda did not want to confuse its image in its ‘target’ market of men who bought the larger bikes.

The faults in Honda’s larger machines meant that reluctantly, Honda had no alternative but to sell the small 50cc bikes just to raise money.

They proved very popular with people who would never have bought motorbikes before.

Eventually the company adopted this new market with enthusiasm with the slogan: ‘You meet the nicest people on a Honda.’

The strategy had emerged, agents, managers conscious intentions, but they eventually responded to the new situation.

PLAN : The company identified and targeted an

untapped market for small 50cc bikes in the US.

PLOY: These bikes had a defined market, and sold

through dedicated motorbike dealerships. Compete with the larger European and US

bikes of 250ccs and over.

PATTERN : They proved very popular with people who would

never have bought motorbikes before.

POSITION : Company adopted a new slogan to present itself to

the customers : ‘You meet the nicest people on a Honda.’

Did not want to confuse its image in its ‘target’ market of men who bought the larger bikes.

PERSPECTIVE : The strategy had emerged, through agents,

managers, conscious intentions, but they eventually responded to the new situation.

P Comments

Plan A consciously intended course of action.

Ploy A maneoveour in a competitive game.

Pattern Emergent strategies

Position Environmental fit and relationship with other organizations

Perspective A unique way of looking at the world, and interpreting information from it, judging its opportunities choices and acting

AT A GLANCE

THANK YOU…

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