Charles Schwab, Case Study Example

The Charles and Schwab Company, also called Schwab, was a discount brokerage company of the biggest size and with its business operations being conducted online. The company daily transactions capacity was documented at $13 billion worth of online stock, mutual funds transactions as well as bond. This trend in business facilitated for the acquisition of 1.5 million accounts with a value of $ 107 assets in 1999. This translated to an increase of 35% from 1998. Most of the clients who opened new accounts at Schwab preferred portfolio management that facilitate for paying between $ 29.95 and @229.5 online trading in the company.

The clients in Schwab were empowered to buy mutual funds by means of the Schwab Fund Marketplace and Schwab OneSource. It also offered margin loans, life insurance, options trading, IRAs, as well as money market savings. However, Schwab could not offer the services of an investment bank like any other full service organization. The advisors of Schwab included the Morgan Stanley, Lehman Brothers and the Merrill Lynch as well as offering security underwriter’s services. Schwab played the role of distributor as well as marketer instead of being an underwriter in retail financial services as well as products (Akpoyomare, Adeosun & Ganiyu, 2012).

The year 2000 was associated with a rapid proliferation of companies in financial services industry thus raising competition in this field (Baliga, 2009).  This growth facilitated for the need of brand diversification at Schwab and the possibility for merger and acquisition. This could thence allow for a greater scope of products and services from the company (Wit & Meyer, 2005). Schwab must also focus on providing superior services to the clients that entails life insurance, mutual funds, margin loans , investment research and option trading in attempts of gaining a competitive advantage.

References

Akpoyomare, O., Adeosun, L. & Ganiyu, R. (2012). Differentiation and Positioning Strategy: A Toss   of the Same Coin. International Journal of Management and Sustainability , 1(2), pp.53–65.

Baliga, B. (2009). Advanced power rectifier concepts . 2^nd Ed. New York: Springer.

Wit, B. & Meyer, R. (2005). Strategy synthesis . 3^rd Ed London: Thomson Learning.