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ISM 158

ISM 158. Lecture 3 Charles Schwab Case. Fig 1.7 Strategic Alignment Model. Ideally, all four quadrants align to create value. Opportunities. Can IT change basis for competition? Can IT change balance of power among buyers and supplyers? Can IT build or reduce barriers to entry?

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ISM 158

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  1. ISM 158 • Lecture 3 • Charles Schwab Case

  2. Fig 1.7 Strategic Alignment Model Ideally, all four quadrants align to create value

  3. Opportunities • Can IT change basis for competition? • Can IT change balance of power among buyers and supplyers? • Can IT build or reduce barriers to entry? • Can IT increase or decrease switching costs? • Can IT add value to existing products and services or create new ones?

  4. Risks • Can emerging technologies disrupt current business models? • Are we too early or too late to exploit IT opportunity? • Does IT lower entry barriers? • Does IT trigger regulatory action?

  5. Fig 1.8 Analyzing Disruptive Technologies

  6. Fig 1.9 Analyzing Cash Flow Curve

  7. Questions

  8. Case Overview: Charles Schwab • Decision making under rapidly changing environment • Technology providing large opportunities and risks • Regulatory environment changing at same time

  9. Outline for discussion • Background/history of company • Main issues at time of case • Any updates since case?

  10. Company History • Discount Broker 1975 – 1994 • Multi-channel online broker 1995-1999 • Strategic Transition 2000-2002 • What are the differences? • What were strengths and weaknesses in each period?

  11. Financial Services 1980’s

  12. Charles Schwab Discount Broker

  13. Case: Charles Schwab

  14. Time of case

  15. Charles Schwab

  16. Charles Schwab

  17. US Trust Acquisition

  18. Examining the Numbers • Calculating • Return on Assets • Return on Equity • Profit Margins

  19. ISMA MEETING TODAY! • Engineering 2, Room 399, 6-7pm • Right next to the elevators • Open to everyone! Even if you’re new to ISMA. • Please turn in member apps if you have one

  20. Questions, Survey, Break

  21. Student Presentation • Johan Stenberg

  22. Between case and now

  23. Financial Services Market Today

  24. Schwab Private Client

  25. US Trust – State Street

  26. Extending to other Financial Products

  27. Schwab Equity Ratings

  28. Research Offerings

  29. Schwab Capital Markets

  30. 2004 follow up

  31. Schwab Personal Choice

  32. Still struggled

  33. Charles Schwab

  34. More Recently • Very strong 2006 • Recent sale of US Trust Announced

  35. Stock Price History

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