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Charles Schwab, Inc.: Creating an International Marketspace  
Product Ref: 99/52C Company: Charles Schwab Inc.

Product Type: Case Industry: Banks & Diversified Financials

Related Product(s): Teaching Note
In 1996, Charles Schwab, Inc. (Schwab) pioneered online trading and experienced phenomenal growth by creating a whole new market for its products and services. In doing so it significantly altered its business model. The ease with which information could be obtained over the web meant that investors could bypass the traditional brokers (dis-intermediation) and trade on their own at a much cheaper price. This lured not only many new traders to the market but also many new competitors. Price wars followed, which shrunk margins. In order to retain its dominant position and continue growing, Schwab had to find other ways of expanding the market base. Teaching Purpose: Outlines the important role information technology has played in Schwab's development. It specifically focuses on how Schwab successfully created a new market of customers by pioneering the establishment of web-based trading and how this, in turn, has led to new challenges and opportunities. Students will learn how the Internet has transformed the brokerage industry and led to both dis-intermediation and re-intermediation effects. Students are asked to evaluate Schwab's strategy in the face of rising competition.
Functional Area : Management of Information Systems
Strategy & General Management

Issues: Information System, Competitive Strategy, Information Technology
Length: 16 pages Country: Hong Kong SAR

Pub. Year: 1998 Level of Difficulty: 1
This product type is available in the following language(s):      English
Related Information: N/A
This case is UGC funded.
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