Charles Schwab Customer Focused E-Business Strategy
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Case Details:
Case Code : ITSY042
Case Length : 17 Pages
Period : 1997-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Charles Schwab
Industry : Financial Services
Countries : US
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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Ever since its inception in 1971, Schwab had been the front-runner in adopting the latest technology to help customers make the right investment decisions.
Dave Pottruck, former president and Co-CEO, preferred to call Schwab as a technology firm, which operated in the financial services business. The company commenced stock trading through PCs and software in 1985 and started using the telephone for trading in 1989.
Schwab was one of the first companies in the financial services industry to
recognize the importance of the Internet to boost business.
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Schwab flourished in the mid 1990s, when it commenced online trading using the Internet, through its web-based division, eSchwab. This enabled it become the largest online trading company in the US. Following this, the number of online accounts handled increased manifold, from 335,000 in 1996 to 4.2 mn in 2002 (Refer Exhibit I on the growth of online accounts at Schwab between 1995 and 2002).
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While adopting the Internet wholeheartedly, Schwab was conscious that its other customer service channels such as the branch and telephone network could not be undermined. This was reflected from the fact that though web-trading's popularity was increasing at Schwab (in 2000, 83% of trade was executed online by Schwab compared to 36% in 1997), the company continued to expand its branch network.
The appropriate integration of these channels played a major role in Schwab's success in the discount brokerage industry (Refer Exhibit II for the growth of Schwab's customer accounts, customer assets and number of branches between 1993 and February 2004)... |
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