Business Analytics for Managers. Thorlund Jesper
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strategic target penetrates right into the core business of the radio station. If the target – to hold on to the average listener for 30 minutes – is achieved, it will mean a bigger market share, increased advertising revenue, and, ultimately, an improved ROE. So, it is expected that an increase in KPI 3 will affect both KPI 2 and KPI 1 positively.
Before launching the BA initiative, the program manager prepares a business case for the project. He expects a larger market share (KPI 2) of up to 25 percent as a result of the increase in average listening time (KPI 3) of 30 minutes. This is expected to improve the pricing of advertising slots, so that the advertising revenues of the radio station increase by $4 million per year. Based on these expectations, he calculates that return on equity (KPI 1) will increase from 9 percent to 13 percent. In addition, he expects that the BA initiative will incur a resource consumption of three employees in four months as well as necessitate purchasing software and consultancy services for $250,000.
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