Charles Schwab in 2002

Subject: Case Summary: Charles Schwab in 2002

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Situation

Founded in 1975, The Charles Schwab Corporation provides securities brokerage and related financial services to its customers. With its customer centric philosophy and new technology, Schwab was able to lead the investment fever of 90s.However when the bubble busted, Charles Schwab’s brand was caught in an increasingly competitive and commoditized category, stuck between deep discount brokers and full service firms. In 2002, the company has decided to expand and restructure its services to three classes of investor: self-directed investors, validators, and delegators. These new services were to meet its all customers whom it evolving with.

Problem Statement

1. Schwab has to catch up with new technology and customers’ needs to survive and expand in the highly competitive industry.

2. Even the company succeeds to create a seamless, integrated multi-channel offering, it still need to handle massive organization changes to develop the capabilities and culture required to implement its new business model.

3. Is it possible Schwab to maintain its position in the financial service markets, while global economy declining?

Analysis

Even Schwab was in the difficult situation, it had to compete with its competitors. It had multiple options to reinvent itself quickly and successful.

• The Equity Rating System(ERS)

This system enables individual investors to tap into a sophisticated stock performance analysis model. What is good about Schwab’s system- its objectivity- is also a drawback.

• World New Standard

The ER system successfully