Charles Schwab

Charles Schwab

From its conception, Charles Schwab & Company’s exploratory innovations and customer-centered orientation lead to massive company growth. Although this momentum seemed unstoppable, 2000 brought shrinking share prices in the U.S. This caused online trading at Schwab to drop by 55%, and decrease revenue, net income, and its stock price. Refusing to gracefully bow out, Charles Schwab and his co-CEO are addressing the need to reverse the decline, rejuvenate growth, and attain a profit margin of 12% or better.

There are many issues to consider when attempting such an ordeal. For instance, the high industry concentration needs to be recognized, along with its accompanying factors. In 2002, there were 261 NYSE firms, with the 10 largest accounting for 59% of the gross revenue in the industry. Schwab & Company should also consider customer’s increasing needs and preferences. As the industry changes, so does the wants of clients. Also, Schwab needs to consider its independent affiliates, and how their attitudes may affect the firm’s name and performance. In addition, market leader loyalty needs to be scrutinized to allow a close comparison between cost of entry and worthwhile financial compensation.

Schwab & Company has a number of available options to help achieve their goals. One thing Schwab could do is focus more on deregulated practice, focusing mostly (if not completely) on their original brokerage group. The industry is flooded with brokerage firms, but Schwab has good