The Penta Model

The Penta Model is a library of Strategic Choices: the typical options a business has when deciding where to focus and how to compete. It is shaped as a pentagon of five Strategic Positions, on each of the two dimensions, which together hold twenty Strategic Choices and forty Sub-choices.

It is not a recipe. Penta Model's role is to give strategists a complete, well-organized palette of options, so that the choices they make are deliberate and logical instead of subjective, accidental, approximative, or unstructured.

Strategy has always had two dimensions, traditionally called the market-product duopoly. The Penta Model restates them as Problems-to-Solve (PTS) and Solutions-to-Deliver (STD).

The first answers: Where to focus? The second answers: How to compete? Every Strategy, explicit or not, is a combination of choices on both dimensions.

The wording of Problems-to-Solve comes from Jobs-to-Be-Done thinking and from Peter Drucker: a business exists to solve a customer's problem, or to get a job done, or several. When the solution truly fits the problem, a buying customer is created.

The wording of Solutions-to-Deliver is based on the idea that a solution is more than a product, because it also has to be delivered. And the logic is not limited to companies: in the public sector (municipalities, agencies, schools, hospitals) the customer is already there, and success means giving citizens back time and quality of life.

Each dimension holds five Strategic Positions, and each position offers two Strategic Choices types. That makes ten choices per dimension, twenty in total. Each choice can be pursued in more than one way, so the model is a library of patterns, not a checklist. Within each Strategic Choice, we have two major Sub-choices types. Click each Sub-choice in the Graphic View to learn more about it.

The Penta Model evolved from Arnoldo C. Hax's Delta Model, which covers only the solution side: Solutions-to-Deliver. A symmetrical market side, Problems-to-Solve, was added, drawing on the market-growth alternatives in Chris Zook's Beyond the Core and the Six Paths of W. Chan Kim and Renée Mauborgne (Blue Ocean Strategy).

On the solutions side, some Delta Model positions were reshuffled. System Lock-In became Transaction Control and Unique Advantage. Total Customer Solutions became Customer Bonding and Added Value. Several Strategic Choice types missing in the Delta Model were added.

Beyond the Delta Model, the Penta Model integrates other Strategy Models: the Capabilities-Driven Strategy, the Resource-Based View of the firm, Disruptive Innovation and Blue Ocean Strategy. This makes it a particularly integrative library of Strategic Choice patterns.

Porter's Generic Strategies, for instance, are the Cost Leadership and Differentiation choices, with Niche Focus and Market Edges covering the focused strategies. Disruptive Innovation and Blue Ocean Strategy are part of the Emergents and Innovative Value positions.

Each Problems-to-Solve choice type targets a distinct type of customer job and outcome. Niche Focus serves customers with very specific needs. Proximity brings the solution physically or virtually close. Value Stream and Adjacents offer one trusted source for a chain, or a family, of related needs. Trend Markets and New Markets address needs that were never met before, or never even imagined.

Selecting your choices types on both dimensions of the Strategy results in a Strategic Positioning Mix. Real businesses are rarely positioned by one single Strategic Choice type: they combine two or more on each dimension. This goes against the concept of Strategic Centering which recommends the focus on a single core choice.

The model works as a reference cognitive model for the Orient stage of John Boyd's OODA loop. It helps you understand your current positioning. In formulating your Strategy, the choices that you select here then carry through the rest of your Strategy construct, since the Strategic Choices are the foundation of the Strategy.