5ps-of-strategy

Mintzberg’s 5Ps of Strategy In A Nutshell

Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.

Understanding Mintzberg’s 5Ps of Strategy

Mintzberg’s 5Ps of Strategy was created by Canadian management scientist Henry Mintzberg. 

He recognized that in dynamic business environments, a simplistic approach to strategy development was unlikely to deliver success. The strategy may be reasonably effective one day and then useless the next.

To ensure that a strategy is adaptable and has longevity, it must be multidimensional and consider many perspectives.

The five perspectives of Mintzberg’s strategy

Following is a look at each of the five perspectives that Mintzberg identified as being crucial to success:

  1. Plan – what course of action will the business take to realize its future goals? Businesses should hold brainstorming sessions to identify goals and determine how they might be achieved. A plan can then be created by using a SWOT or PESTLE analysis. A sound strategic plan is essential because it is the foundation of the four subsequent perspectives.
  2. Ploy – Mintzberg argues that the strategy should discourage, divert, or influence competitors. For example, a tech company might patent certain inventions to discourage competitor products from entering the market. A business must use strategic ploys to stay one step ahead of the competition. But they should not become so focused on competitors that they lose sight of their own strategy.
  3. Pattern – the previous two perspectives encourage businesses to look forward. However, recognizing a pattern is about looking to the past and determining what has worked well. A restaurant that is known for its specialty seafood should not try to develop a competitive advantage elsewhere. Rather, it should double down on what it does best. It is also important to note that while plans are intended strategy, patterns are realized strategy and may be unintentional. In some cases, a business will need to seek out emerging patterns in its operations and then develop a strategy for each.
  4. Position – how does the business want to portray itself in the market? What target audience or niche should it occupy to gain a competitive advantage? What is the USP and how does it relate to brand strength? Porter’s Diamond and Porter’s Five Forces are useful market force analyses.
  5. Perspective – how does the business perceive the world? What is the “personality” of the business? Perspective should be shared by all members of the organization who are united in common thinking and behavior. For this reason, many equate perspective with culture. For example, a company that has a culture of risk-taking and innovation should base its strategy on highly innovative products and services.

The sixth perspective of Mintzberg’s strategy

While the five perspectives of Mintzberg’s strategy create a multidimensional strategy, some argue that they are too descriptive. That is, they do not offer guidance on how these perspectives might be implemented.

In response, a sixth perspective called Practice was created to help businesses execute their strategies. This can be achieved in several ways:

  • Embodying the strategy, or the physical performance of actions that help the business grow. Streaming services such as Netflix and Prime Video embodied their original content strategies by purchasing studios to create new television shows.
  • Sensing the strategy through one of the five senses. When Coca-Cola released its Coke Zero Sugar beverage to market, the consumer backlash to the awful taste was immense. It is difficult to imagine that Coca-Cola tasted the drink (or its strategy) before release.
  • Keeping the strategy in the present. Many strategies suffer when leaders look too far into the past or conversely, too far into the future. Intel’s strategy of developing future technology led to the company neglecting the present issue of product security. Sony’s focus on past consistency has resulted in repeated mistakes in the Spiderman franchises and in three generations of PlayStation. In both examples, the strategy was based on the intangibility of the past and future. Strategies that are instead based on the reality of the present save businesses from becoming distracted.

Key takeaways

  1. Mintzberg’s 5Ps of Strategy is a strategy development framework that incorporates five key perspectives.
  2. Mintzberg’s 5Ps of Strategy argues that one-dimensional strategies are unreliable from one day to the next because they do not adapt to dynamic markets.
  3. Mintzberg’s 5Ps of Strategy sometimes includes a sixth perspective: practice. Practice enables a business to implement an effective strategic plan by remaining present and undistracted.

Connected Business Frameworks

Ansoff Matrix

ansoff-matrix
You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.

GE McKinsey Model

ge-mckinsey-matrix
The GE McKinsey Matrix was developed in the 1970s after General Electric asked its consultant McKinsey to develop a portfolio management model. This matrix is a strategy tool that provides guidance on how a corporation should prioritize its investments among its business units, leading to three possible scenarios: invest, protect, harvest, and divest.

Porter’s Five Forces

porter-five-forces
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces

McKinsey 7-S Model

mckinsey-7-s-model
The McKinsey 7-S Model was developed in the late 1970s by Robert Waterman and Thomas Peters, who were consultants at McKinsey & Company. Waterman and Peters created seven key internal elements that inform a business of how well positioned it is to achieve its goals, based on three hard elements and four soft elements.

Porter’s Generic Strategies

competitive-advantage
According to Michael Porter, a competitive advantage, in a given industry could be pursued in two key ways: low cost (cost leadership), or differentiation. A third generic strategy is focus. According to Porter a failure to do so would end up stuck in the middle scenario, where the company will not retain a long-term competitive advantage.

Cost Leadership

cost-leadership
According to Porter there are three core strategies for competitive positioning: cost leadership, differentiation and focus. Cost leadership is straightforward, as the player rolling this out will become the lost-cost producer in the industry.

Porter’s Value Chain Model

porters-value-chain-model
In his 1985 book Competitive Advantage, Porter explains that a value chain is a collection of processes that a company performs to create value for its consumers. As a result, he asserts that value chain analysis is directly linked to competitive advantage. Porter’s Value Chain Model is a strategic management tool developed by Harvard Business School professor Michael Porter. The tool analyses a company’s value chain – defined as the combination of processes that the company uses to make money.

Porter’s Diamond Model

porters-diamond-model
Porter’s Diamond Model is a diamond-shaped framework that explains why specific industries in a nation become internationally competitive while those in other nations do not. The model was first published in Michael Porter’s 1990 book The Competitive Advantage of Nations. This framework looks at the firm strategy, structure/rivalry, factor conditions, demand conditions, related and supporting industries.

SWOT Analysis

swot-analysis
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

PESTEL Analysis

pestel-analysis
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Blue Ocean Strategy

blue-ocean-strategy
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

Read next:

Read Next: BCG MatrixGE McKinsey Matrix.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesAnsoff Matrix.

More Strategy Tools: Porter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF Framework.

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