Mental Models & Strategies for Business Growth
Traditional Mental Model
Authority
The General Manager controls all movements of parts of the organization and influences its functioning.
Control
The company is expected to sell over 5,000 cars to make ends meet and was sold twice.
Resources
Do not open another branch without trained employees and the money.
Structure
A branch consists of the boss, employees, and managers who handle each aspect of its work.
Results
If an employee fails to sell at least 100 cars in a month, they are fired.
New Environments
Vision
Nacrox’s founder envisioned the company as a leader in automobiles worldwide.
Positioning
We aim to be at the forefront of people’s minds when they are considering buying a car.
Communication
We constantly conduct customer surveys to understand what they would like to see included in new designs.
Integration
We have signed contracts with celebrities to promote our cars.
Courage
We are always innovating, believing that we will create the best-selling products of the future. We take calculated risks, confident that they will lead to future success.
Vision
Basic Values
Quality, care, environmental stewardship, creativity.
Basic Purpose
To be innovative and increase the comfort of human beings in their means of transport, facilitating their daily lives.
BHAG (Big Hairy Audacious Goal)
Position Nacrox as the leader in car sales worldwide.
Vivid Description
We will further expand globally and maintain constant innovation, creating new products that exceed people’s expectations. We will provide a unique space of comfort and tranquility that everyone needs.
Strategy
Approach
Establish more branches in all parts of the world, solidifying our position in the minds of people, and never stop exploring new ideas for our products.
Goals
- By the end of this year, install 1,000 branches worldwide.
- Release the new X34 car, which we are currently developing, before 2015.
- Become the company of choice in Asia in less than 5 years.
- Continuously test new technologies.
Generic Strategies: Nacrox is a company with a focus on differentiation because it targets individuals over 21 who want affordable, creative, and high-quality cars.
Mental Models
Traditional Mental Model
- Authority: It is organized hierarchically, and employees follow orders meticulously.
- Control: Plans are compared with the results.
- Resources: Decisions are made within the limits of available resources, and these resources are used efficiently.
- Structure: There is a precise division of tasks. This can create competition between different sectors of the company.
- Results: These are measured in numbers and percentages.
Mental Model for New Environments
- Vision: The image we have of the future.
- Positioning: The firm’s place in the minds of key players.
- Communication: The exchange of ideas within and outside the company.
- Integration: The ability to work as a team, both with members of the organization and with key players in the environment.
- Courage: An attitude that encourages taking risks in unpredictable conditions.
Basic Ideology
It is timeless. It defines what the company represents and why it exists. It answers the question: “Who am I?”
Components:
- Core Values: These are the most important principles of an organization that are always taken into account when carrying out its work.
- Basic Purpose: The purpose of the organization, beyond making money. It reflects the importance of the work and justifies the company’s existence.
Planned Future
It is temporary. It answers the question: “What do I want to accomplish?” It determines what the company wants to be and what it wants to achieve through its efforts and progress.
Components:
- BHAG: A bold and ambitious long-term goal (10 years or more) that serves to unify efforts, encourage people, and build team spirit. It should be necessary, motivating, and easy to understand.
- Vivid Description: Specifies how things will be when the goal is reached. It translates the words of the vision into images that people should always keep in mind.
Product Growth
A product’s growth is observed through the expansion of its sales.
- High: Sales are expanding constantly.
- Low: Sales volume is maintained (whether high or low).
Market Share
The portion of total sales that is allocated to each company or product.
- High: Higher sales than competitors. Holds a larger percentage of the market.
- Low: Sales represent a small portion of the total market.
Star
High growth and high market share. Grows and sells a lot but requires company support to achieve even more. This is a product that is very well-received but may not yet generate significant profit.
Cash Cow
Low growth and high market share. This is a product that has reached maturity and its growth is minimal or non-existent. It does not require much advertising and generates a lot of revenue.
Question Mark
High growth and low market share. These are generally new products entering the market that require continued advertising. They can become successful (stars) or failures (dogs).
Dog
Low growth and low market share.