Charles Schwab
pioneered seamless stock trading on
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Internet
in 1996 – much faster than
their large
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competitors
– and went from a tiny firm to the world's largest financial services
company...
More
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The Tree of
Online
Success
→
7 Routes
To High Profits
The company's leaders believed that online
trading was going to become huge. Acting with lightning
speed in accordance
with Charles Schwab's Guiding Principles – always own
the core technology; reinvent the business; and constantly improve what you
do, – the company made fast decisions and was able to introduce online
trading service e.schwab to the market within months of conception.1
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How To
Create Greater Value Online
Initially, Schwab offered two separate
products: the new e.schwab online product where customers paid a flat $29.95
per trade and regular online accounts where customers were charged 20% less
than is a Schwab rep did the deal. Schwab's front-line personnel felt that
customers were confused about the dual pricing structure, and they wanted
both full service and $29.95 trades. Pottruck and Schwab, the company
leaders decided to end the dual pricing structure and merge e.schwab into
the organization.
Though internal documents showed that by moving to
flat-rate pricing the company could take a first-year financial hit of $125
million, the Pottruck and Schwab were able to make this tough decision
quickly as one of the Schwab's guiding principles stated that they would be
willing to risk short-term revenue growth if it was right for the customer
and ensured long-term success.
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