P R E S E N T E D B Y:M A N I S H A S A B H A R WA L

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Mintzberg 5‘P’s of Strategy

WHAT IS 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.

Origin of the 5 P’s

Henry Mintzberg, Bruce Ahlstrand and Joseph Lampell, in their 2005 book Strategy Bites Back, present 5 "P's" as a way to define strategy

5 P’s

Plan

Position Pattern

Perspective Ploy

THE 5P’s

STRATEGY IS A PLAN

In the most common terms, strategy is a plan, a how, a means of getting from here to there - some sort of consciously intended course of action, a guideline (or set of guidelines) to deal with a situation.A kid has a "strategy" to solve a puzzle, a student has a strategy to pass an exam, a firm has one to dominate a market for a particular service or practice area.Thus, strategy has two essential characteristics:

1. It is made in advance to the actions to which it applies

2. It is developed consciously and purposefully.

STRATEGY IS A PLOY

Strategy is a ploy, which is a "maneuver" intended to outwit an opponent or competitor. A firm may threaten to establish a new practice area in order to discourage a competitor from trying to do the same.

STRATEGY IS A PATTERN

Strategy is pointless if it cannot be realized. Hence, defining strategy as a plan or ploy is not sufficient; a definition that encompasses the resulting behaviour is also needed. Thus, strategy is also a pattern - specifically, a pattern in a stream of actions. 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

STRATEGY IS A POSITION

Strategy is also a position; ie a means of locating a firm in its environment. In ecological terms: strategy becomes that firm's "niche." In management terms: a "domain" consisting of a particular combination of services, clients and markets. Position is often defined competitively

STRATEGY IS A PERSPECTIVE

While position is outwardly focused, perspective looks inward into the firm. Strategy thus becomes an ingrained way of perceiving the world. Some firms are aggressive pacesetters; others build protective shells around themselves. Almost every profession has about it unique perspectives, that indelibly flavor the strategies that firms practicing those professions craft for themselves. A law firm's view of their business is fundamentally different to that of an accounting firm, and engineering firm or a graphic design studio, yet all are staffed by professionals.

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.

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