!"#"$%&' )%*+&%"+' "$' ),+",&-.

/"0 ", /*12#

3*+,4 56&+2%" /"+7&,2$- "$' 8&92$2$- :35/;8<

Lxxon Mobll ls Lhe world's largesL publlcly Lraded lnLernaLlonal oll and gas company, provldlng
energy LhaL helps underpln growlng economles and lmprove llvlng sLandards around Lhe world.
LxxonMobll ls Lhe world's largesL company by revenue, aL $404.3 bllllon for Lhe flscal year of 2007
and also Lhe largesL corporaLlon by markeL caplLallzaLlon, aL $317.92 bllllon on !uly 20, 2007.

!"#$%&' )*+!,-. /012034$5 6$'$"7=
Mobll norLh Amerlca MarkeLlng and 8eflnlng (nAM&8), ls a mulLlbllllon-dollar dlvlslon of
LxxonMobll. Mobll's sLaLed sLraLeglc vlslon was "Lo be Lhe besL lnLegraLed reflner-markeLer ln Lhe
unlLed SLaLes by efflclenLly dellverlng unprecedenLed value Lo cusLomers."

/*12#&> ?+*1#&6=
When 8ob McCool became Lhe head of Mobll nAM&8 ln 1992, he made lL clear LhaL Lhe
performance of Lhe pasL was noL accepLable. Mobll, ln Lhe pasL, had aLLempLed Lo sell a full range
of producLs and servlces Lo all consumers, whlle sLlll maLchlng Lhe low prlces of nearby dlscounL
sLaLlons. 8uL Lhls unfocused sLraLegy had falled, leadlng Lo poor flnanclal performance ln Lhe early
'90s. 1hls led Mobll Lo adopL Lhe 8alanced Scorecard.

!"#$%&' /012034$5 8"2%'9
1he company's hlgh-level flnanclal goal was Lo lncrease lLs reLurn on caplLal employed by more
Lhan slx percenLage polnLs wlLhln Lhree years. 1hrough markeL research, Mobll dlscovered LhaL
prlce-senslLlve consumers represenLed only abouL 20 of gasollne purchasers, whlle consumer
segmenLs represenLlng nearly 60 of Lhe markeL mlghL be wllllng Lo pay slgnlflcanL prlce
premlums for gasollne lf Lhey could buy aL sLaLlons LhaL were fasL, frlendly, and ouLflLLed wlLh
excellenL convenlence sLores. WlLh Lhls lnformaLlon, Mobll made Lhe cruclal declslon Lo adopL a
"dlfferenLlaLed value proposlLlon".

@*A /*12# 260#&6&$,&' 2,:
Mobll (nAM&8) execuLed Lhe new sLraLegy Lo reconsLrucL lLself from a cenLrally conLrolled
manufacLurer of commodlLy producLs Lo a decenLrallzed, cusLomer-drlven organlzaLlon. A ma[or
parL of Lhe sLraLegy was Lo LargeL consumers who were wllllng Lo pay prlce premlums for gasollne
lf Lhey could buy aL fasL, frlendly sLaLlons wlLh excellenL convenlence sLores. 1helr purchases
enabled Mobll Lo lncrease lLs proflL marglns and revenue from non gasollne producLs.

B4& C*D+ ?&+>0&%,2E&> *9 ,4& !"#"$%&' )%*+&%"+'=
C2$"$%2"# ?&+>0&%,2E&=
1he flnanclal perspecLlve for Mobll had 2 baslc levers: revenue growLh and producLlvlLy. 1he
+&E&$D& -+*A,4 >,+",&-. called for Mobll Lo expand sales ouLslde of gasollne by offerlng
convenlence sLore producLs and servlces, anclllary auLomoLlve servlces (car washes, oll changes,
and mlnor repalrs), auLomoLlve producLs (oll, anLlfreeze, and wlper fluld), and common
replacemenL parLs (Llres and wlper blades). Also, Lhe company declded Lo sell more premlum
brands Lo cusLomers Lo lncrease cusLomer proflLablllLy. 1he meLrlcs used Lo measure Lhls sLraLegy
were: a) 8evenue from non-gasollne producLs b) roflL margln c) Sales volume compared Lo Lhe
resL of Lhe lndusLry d) 8aLlo of premlum producLs sold Lo regular producLs sold.
ln Lerms of 0+*'D%,2E2,., Mobll wanLed Lo slash operaLlng expenses per gallon sold Lo Lhe lowesL
level ln Lhe lndusLry and exLracL more from exlsLlng asseLs by reduclng Lhe downLlme aL lLs oll
reflnerles and lncreaslng Lhelr ylelds. 1he meLrlcs used were !" $%&'()* +%*, -./ 0!((%1 +%2-!/.3
wlLh Lhe resL of Lhe lndusLry b) AcLual cash flow compared Lo Lhe resL of Lhe buslness plan.

FD>,*6&+ ?&+>0&%,2E&=
45. +%/. %6 $%&'()* &7*'1.** *,/!,.08 9!* %D>,*6&+ E"#D& 0+*0*>2,2*$ whlch descrlbes Lhe unlque
mlx of producL and servlce aLLrlbuLes, cusLomer relaLlons, and corporaLe lmage LhaL Lhe company
offers. lL deflned how Mobll dlfferenLlaLed lLself from compeLlLors Lo aLLracL, reLaln, and deepen
relaLlonshlps wlLh LargeLed cusLomers. 1hls Lurned lnLo a sLraLegy ln whlch Lhe company would
LargeL Lhe premlum cusLomer segmenLs by offerlng Lhem lmmedlaLe access Lo gasollne pumps,
each equlpped wlLh a self-paymenL mechanlsm, safe, well-llL sLaLlons, clean resLrooms,
convenlence sLores sLocked wlLh fresh, hlgh-quallLy merchandlse, and frlendly employees. 1he
meLrlcs used were a) Share of LargeLed cusLomer segmenLs b) MysLery shopper raLlng.

Mobll declded LhaL Lhe consumer's buylng experlence was so cenLral Lo lLs sLraLegy LhaL lL
lnvesLed ln a new sysLem for measurlng lLs progress ln Lhls area. Lach monLh Lhe company senL
:28*,./8 *5%--./*; ,% -7/+5!*. 67.( !13 ! *1!+< !, .=./8 $%&'( *,!,'%1 1!,'%19'3. !13 ,5.1
asked Lhe shoppers Lo evaluaLe Lhelr buylng experlence based on 23 speclflc crlLerla. Also as Lhe
company's lmmedlaLe cusLomers were Lhe lndependenL owners of gasollne sLaLlons and Lhey
were such a crlLlcal parL of Lhe new sLraLegy, Mobll lncluded Lwo addlLlonal meLrlcs Lo lLs
cusLomer perspecLlve: c) uealer proflLablllLy d) uealer saLlsfacLlon.

1hls cusLomer sLraLegy led Lo lncreased proflLs due Lo Lhe followlng cycle:

G$,&+$"# 0+*%&>> 0&+>0&%,2E&>=
Mobll's lnLernal process ob[ecLlves lncluded bulldlng Lhe franchlse by developlng new producLs
and servlces, such as sales from convenlence sLores, enhanclng cusLomer value by Lralnlng dealers
Lo become beLLer managers and by helplng Lhem generaLe proflLs from nongasollne producLs and
servlces. 1he plan was LhaL lf dealers could capLure lncreased revenues and proflLs from producLs
oLher Lhan gasollne, Lhey could Lhen rely less on gasollne sales, allowlng Mobll Lo capLure a larger
proflL share of lLs sales of gasollne Lo dealers.

CompleLe cusLomer
sLraLegy

MoLlvaLes
lndependenL dealers
Lo dellver a greaL
buylng experlence

8evenue growLh for
Mobll's flnanclal
sLraLegy


CusLomers buy
producLs and servlces
aL premlum prlces

ALLracL more
cusLomers

Mobll wanLed Lo undersLand cusLomer segmenLs beLLer Lo bulld besL-ln-class franchlse Leams. Cne
of Lhelr oLher sLraLegles was Lo lmprove hardware performance and lnvenLory managemenL,
dellver producLs on spec and on Llme and become Lhe lndusLry cosL leader. Also as a parL of lLs
corporaLe-clLlzen Lhemes, Mobll wanLed Lo ellmlnaLe envlronmenLal accldenLs. 1he meLrlcs LhaL
Mobll used Lo measure lLs effecLlveness were: a) new producL accepLance raLe b) new producL
reLurn on lnvesLmenL c) Share of LargeL markeL d) uealer quallLy raLlng e) 8eflnery yleld gap
f) unplanned downLlme g) lnvenLory levels h) SLockouL raLe l) AcLlvlLy-based cosLs versus Lhe
compeLlLlon [) 8educed number of envlronmenLal lncldenLs and safeLy accldenLs.

H&"+$2$- "$' I+*A,4=
Mobll ldenLlfled LhaL lLs employees needed Lo galn a broader undersLandlng of Lhe markeLlng and
reflnlng buslness from end Lo end. AddlLlonally, Lhe company knew lL had Lo nurLure Lhe
leadershlp skllls LhaL were necessary for lLs managers Lo arLlculaLe Lhe company's vlslon and
develop employees. Mobll ldenLlfled key Lechnologles LhaL lL had Lo develop, lncludlng auLomaLed
equlpmenL for monlLorlng Lhe reflnlng processes and exLenslve daLabases and Lools Lo
analyze consumers' buylng experlences. Some of Lhe meLrlcs used by Mobll Lo measure Lhelr
effecLlveness were: a) 8aLlo of sLraLeglc skllls Lo [ob coverage b) Cn-Llme deploymenL of sysLems
c) ersonal balanced scorecards d) Lmployee feedback.

Mobll now had a compleLe sLraLegy map llnked across Lhe four ma[or perspecLlves from whlch
Mobll's dlfferenL buslness unlLs and servlce deparLmenLs could develop Lhelr own deLalled maps
for Lhelr respecLlve operaLlons. 1hls process helped Lhe company deLecL and flll ma[or gaps ln Lhe
sLraLegles belng lmplemenLed aL lower levels of Lhe organlzaLlon.

8&>D#,>=
1he resulL of lmplemenLlng Lhe sLraLegy map was LhaL Mobll lncreased lLs operaLlng cash flow by
more Lhan $1 bllllon per year and became Lhe lndusLry's proflL leader. 1he dlvlslon (nAM&8)
lncreased lLs reLurn on caplLal employed from 6 Lo 16. Sales growLh exceeded Lhe lndusLry
average by more Lhan 2 annually and cash expenses decreased by 20. uealer quallLy lncreased
each year, Lhe number of consumers uslng Speedpass grew by one mllllon annually, safeLy
accldenLs plunged beLween 60 and 80 and losL oll-reflnery ylelds due Lo sysLems downLlme
dropped by 70. Lmployee awareness and commlLmenL Lo Lhe sLraLegy more Lhan quadrupled.

B"7& 5A".>=
1) ! #$%%&'&() *+,)-.&' $()$./*0 ,)'/)&102 normally when companles employ a cusLomer lnLlmacy
sLraLegy, lL usually focuses on lLs cusLom./ 2!1!0.2.1, -/%+.**.*> ?7, $%&'()* 3'66./.1,'!,'%1
occurred aL Lhe dealers locaLlons, noL aL lLs own faclllLles. Pence Lhe company had Lo focus on
achlevlng operaLlng excellence LhroughouL lLs value chaln of operaLlons.

2) 3-..+($*/)$-( -% ,)'/)&10 /*'-,, -'1/($4/)$-( */( 5&/# )- $((-6/)$-(2 :Speedpass; ls a small
devlce LhaL ldenLlfles a cusLomer and charges Lhelr accounL for purchase of gasollne. 1he ldea
for Speedpass came from a plannlng manager ln Lhe markeLlng Lechnology group who learned
from Mobll's balanced scorecard abouL Lhe lmporLance of speed ln Lhe purchaslng LransacLlon.

3) 7&)&*)$-( -% ./8-' 1/9, $( ,)'/)&102 uslng Lhe sLraLegy maps helped Mobll deLecL ma[or gaps ln
Lhe sLraLegles belng lmplemenLed aL Lhe lower levels ln Lhe organlzaLlon. uslng Lhese, senlor
managers noLlced LhaL one buslness unlL had no ob[ecLlves or meLrlcs for dealers and anoLher
buslness unlL had no measure for quallLy.