1. Chapter 7 Enhanced Lecture Slides Metrics Exhibits and Tables
Copyright © 2000 by Marketspace LLC

2. Exhibit 7-1: The Balanced Scorecard -- Strategy Into Operational Terms
Financial
To succeed financially, how should we appear to our shareholders?
Customer
To succeed financially, how should we appear to our shareholders?
Internal Business Process
To satisfy our shareholders and customers, what businesses must we excel at?
Vision and Strategy
Learning And Growth
To succeed financially, how should we appear to our shareholders?
Source: Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,”
Harvard Business Review 74 (January-February): 76, 1996

3. Exhibit 7-2: The Performance Dashboard
Steps of Strategy
Market
Opportunity
Assessment
Business
Model
Customer
Interface
Branding and
Implementation
Evaluation
Opportunity
Metrics
Business
Model Metrics
Branding and
Implementation
Metrics
Customer
Interface and
Outcome
Metrics
Financial
Metrics
Performance Dashboard

4. Supporting Slide 7-A: Introducing the Performance Dashboard
Steps of Strategy:
Market Opportunity
Business Model
Customer Interface
Implementation and Branding
Evaluation
Performance Dashboard:
Market Opportunity
Business Model
Implementation
and Branding
Customer
Financial
Areas Addressed:
Size of market opportunity
Attractiveness of target segments
Competitive landscape
Uniqueness of value proposition
Attractiveness of offering
Firm capabilities relative to competition
Sustainability of competitive position
Branding
Technology infrastructure
Internal organization
Relationship with suppliers and partners
Fulfillment capability
Customer acquisition
Changes in customer behavior
Site experience and usability
Revenue
Profit
Cost
Balance sheet

5. Exhibit 7-3: Life Cycle of a Company
Startup/Beta
Customer
Acquisition
Monetization
Maturity
6 Months - 1 Year
1 Year - 2 Years
2 Years - 5 Years
> 5 Years
Strategy
Develop a platform for rapid growth by building a strong team and creating a flexible site
Build market share as quickly as possible by aggressively spending on partnerships and promotion
Increase revenues and customer lock-in by developing new revenue streams
Control costs and optimize marketing expenditures to achieve profitable growth
Examples*
Business.com tnbt.com
Mvalue.com Paypal.com Evite.com
Yahoo Amazon.com
Schwab AOL
* At time of writing (3/2000)

6. Table 7-1: POV: Bill Gurley on the Power of Conversion Rates
Source: J. William Gurley, “The Most Powerful Metric of All,” CNET News.com, February 21, 2000
URL:

7. Exhibit 7-4: Blueprint to the Performance Dashboard
Step One: Articulate Business Strategy
Step Two: Translate Strategy Into Desired Outcomes
Step Three: Devise Metrics
Step Four: Link Metrics to Leading and Lagging Indicators
Step Five: Calculate Current and Target Performance
Market Opportunity
Opportunity size?
Competitive environment?
Market Opportunity
Market size and growth
Average age and income
Competitor concentration
Business Model
Unique value proposition?
Capabilities vs. competition?
Business Model
Customer perceived benefits
Exclusive partnerships
$ invested in technology vs. competition
For each metric, determine the metrics that it affects and that affect it
Map the linked set of metrics, indicating leading and lagging indicators
Ensure that there is a balance between leading and lagging indicators
For each metric, calculate current level of performance
Determine target level required to meet outcomes described in Step 2
Ensure that targets are consistent with each other
Implementation and Branding
How to develop brand?
How to go to market?
Implementation
Customer brand awareness
System uptime percentage
Number of IT staff
% inaccurate orders
Define goals and value proposition
Develop resource system required to deliver the strategy
Customer
How to acquire customers?
How will customers change?
The customer experience?
Customer
Market share
Purchase/year
Success rate
Service requests/customer
Financial
Financial consequences in terms of revenue, profit, cost and balance sheet?
Financial
Revenue
Profit
Earnings per share
Debt to equity ratio

8. Table 7-2: US Top 25 Web and Digital Media Properties (March 2000)
Source: Media Metrix ( March 31, 2000

9. Exhibit 7-5: Market Research Source -- Bizrate.com

10. Exhibit 7-6: Analyst Source -- Forrester

11. Exhibit 7-7: Financial Information Source -- Hoovers Online

12. Supporting Slide 7-B: Point-Counterpoint: Which is Better -- Online or Offline Data Sources?

13. Supporting Slide 7-C: Point-Counterpoint: Which is Better -- User-Based or Expert-Based Research Content?

14. Exhibit 7-8: Mapping Internet Research Onto the Performance Dashboard
Financial Information
Market Research
Analyst
Market
Implementation
Customer
Financial

15. Exhibit 7-9: Metrics for Seamless Online/Offline Customer Purchase Process
Awareness
Awareness of offline offer vs. awareness of online offer
Knowledge
Perceived benefits of Web vs. offline offer
Pre-Purchase
Information
Available offering information online vs. offline
Currency of information online vs. offline
Evaluation of
Alternatives
Purchase
Security and privacy associated with purchasing
Purchase
Customer service
Response time online vs. offline
Satisfaction
Loyalty
Post-Purchase
Customer loyalty incentive programs online vs. offline
Disposal
Exchange policies online vs. offline

16. Information Sharing Fulfillment Systems
Table 7-3: Metrics for Seamless Internal Business Processes and Operations
Information
Sharing
Ability to open accounts online and offline
Ability to access accounts online and offline
Integrated customer databases
Fulfillment
Systems
Seamless order processing
Seamless order tracking
Integrated inventory keeping

17. Online Investment Process
Exhibit 7-10: Charles Schwab -- Customer Acquisition Stage Step 1: Articulate the Business Strategy
“Use technology to offer innovative products and superior service at lower prices to investors unwilling to pay for investment advice”
Innovative products
3. Resource System
1. Value Proposition
Technology Leadership
Low price
2. Marketspace Offering
Schwab Learning Center
Live Events
Principles of Investing
Understanding Market Cycles
“Did You Know” Q&A
Schwab Signature Services
Schwab AdvisorSource
Options Service
Global Investing Service
Online Chat with Customer Service Representatives
Customer Service via Phone
Customer Service via
Customer Service at Branch
My Watch List
Margin Loans
Money Transfers
Automatic Investing
After Hours Trading
Account Protection
Bill Payment
Overall
General Goal Planner
Investor Profile
Sample Investment Plans
Retirement
Retirement Planner
IRA Analyzer
Product Offering
Online Investment Process
Get Educated About Investing
Plan investments
Decide on Investment
Perform Investment
Post Investment Support
Perform Research
Estate
Estate Tax and Probate Calculator
Alternatives Comparison
College
College Planner
Tax
Tax Strategies
IRS Withholding Calculator
Quotes and Charts
Analyst Center
Stocks and Options
Stock Analyzer
Bonds and Treasuries
Schwab BondSource Services
CDs and Money Markets
SchwabOne
Annuities
Schwab Select Annuity
Life Insurance
Insurance Needs Calculator
Superior service
High-quality
Investment
Information

18. Exhibit 7-11: Schwab Desired Outcome Summary
Martket Opportunity
Significant Opportunity
Financially Attractive Segment
Competitively Attractive Segment
Financial Evaluation
Revenue
Profit
Cost
Balance Sheet
Business Model
Value Proposition vs. Competition
Offer vs. Competition
Capabilities vs. Competition
Sustainability of Value Proposition
Business Model
Implementation and Branding
Brand Associations vs. Competition
Best-in-Class IT Infrastructure
Ability to Deliver Brand Promise
Customer Interface and Outcomes
Lower Customer Acquisition Costs
Transition Customer Base
Outperform Competition on Interface Perceptions
Customer Satisfaction and Loyalty

19. Exhibit 7-12: Charles Schwab -- Customer Acquisition Stage
Market
Opportunity
Business
Model
Implementation
and Branding
Customer
Financial
Avoid crowded markets
Provide unique VP
Build brand
Acquire new
customers
Increase revenue
Target attractive segments
Provide attractive offering
Invest
in technology
Increase usage
Increase system uptime
Play in attractive market
Leverage capabilities to deliver offering
Increase number of IT staff
Increase customer
satisfaction
Optimize cost
Train branch staff
Improve
customer service
Increase customer loyalty
Increase profit

20. Table 7-4: Charles Schwab -- Customer Acquisition Stage Current and Target Levels for Select Metrics
*Source: Nicole Tempest and Warren McFarlan, Charles Schwab Corporation (B). Case no ,
Harvard Business School Publishing, September 13, 1999