Strategy is not just a notion of how to deal with an enemy or a set of competitors or a market. It also involves some of the fundamental issues about organisations as instruments for collective perception and action.
Mintzberg argued that there is no point in developing a strategy that ignores the competitor’s reactions or does not take into account the organisation’s culture and capabilities.
Mintzberg presented 5 different approaches or concepts of strategy. These are known as ‘5 Ps’ of strategy.
1. Plan
2. Ploy
3. Pattern
4. Position
5. Perspective
Strategy as a Plan :
Planning is something that comes naturally to us. As such, this is the default, automatic approach that is adopted. This involves brainstorming options and planning how to exploit the opportunity.
By this definition, strategy has two essential characteristics :
a) They are made in advance of the actions to which they apply.
b) They are developed consciously and purposefully.
As plans, strategies can be general or specific.
Strategy as a Ploy :
A Ploy is a specific ‘maneouvre’ intended to outwit an opponent or competitor. It involves plotting to disrupt, dissuade, discourage or otherwise influence competitors as a part of a strategy.
A major retail store threatening to expand its size and capacity to discourage a competitor from opening a store in the area, a corporation luring away some key employees or distributors of a competitor in order to weaken the operating capability of the competitor are some examples of ‘ploys’.
Strategy as a Pattern :
Strategic plans and ploys are both deliberate exercises. Sometimes, however, strategy emerges from past organizational behavior. Rather than being an intentional choice, a consistent and successful way of doing business can develop into a strategy.
Thus, defining strategy as a plan is not sufficient. We also need a definition which takes into account the resulting behaviour. Thus the definition of strategy as a ‘pattern’ emerges.
By this definition strategy is consistency in behaviour, whether or not intended.
Strategy as a Position :
"Position" is another way to define strategy - that is, how you decide to position yourself in the marketplace.
In this way, strategy helps you explore the fit between your organization and your environment, and it helps you develop a sustainable competitive advantage.
By this definition, strategy becomes a ‘mediating force’ between the organisation and its environment – both internal and external.
A position can be deliberate, intended or may emerge as a pattern of behaviour.
Strategy as a Perspective :
This approach is based on the way an organisation views the world around itself – the customers, competitors and the environment. Accordingly the conduct their business and deal with situations.
It is every organisation’s perspective that becomes the basis for all its actions and the way it reacts to situations. Some companies are aggressive marketers, some believe in developing new technologies while there are some who believe in productive efficiency.
The 5 Ps should be seen as a variety of viewpoints that one should consider while developing a robust and successful strategy.
While various relationships exist among the different definitions, not any single definition takes precedence over the others. In many ways the definitions compliment each other.
Each definition adds important elements to our understanding of strategy, indeed encourages us to address fundamental questions about organisations in general.
As such, there are three points in the strategic planning process where it's particularly helpful to use the 5 Ps:
1. While gathering information and conducting the analysis for strategy development, as a way of ensuring that everything relevant is taken into account.
2. When you've come up with initial ideas, as a way of testing that that they're realistic, practical and robust.
3. As a final check on the strategy that you've developed, to flush out inconsistencies and things that may not have been fully considered.
Using Mintzberg's 5 Ps at these points will highlight problems that would otherwise undermine the implementation of the strategy.