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

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