Effective strategies includes pricing and promotional strategies as well which are more than essential for the companies to bring effectiveness in particular. Among number of companies which experienced heavy competition, the name of Charles Schwab & Co. Inc is one of them. The main perspective of this assignment is to analyze the competition stance of the selected company according to a given case study.
Charles Schwab and Co Inc was basically a CSC principal subsidiary which provides securities brokerage and financial services to its clients. The company had 6.1 million active accounts of their customers and had 304 branches in 47 different states. The company employed over 13,000 employees in the company. By the end of year 1999, the amount of customer assets were $ 561 billion, however Schwab had attracted $ 80.8 billion in new customers’ assets by opened 1,380,000 new accounts.
Significant amount of change has been envisaged in the revenue of the company from the year 1993 to 1998. Revenue of the company was $ 354 million in the year 1997 and then it increased to a level of 38.7%, which was quite high, but it is not got stable for a long span of time.
Tele-Banking is one of the most effective services of Schwab and the company was effective as far as absorbing all sort of technology in it, however, after the revolution of Internet, the entire world of Schwab Inc had changed dramatically. After the arrival of internet technology, new entrants entered in the market to compete with other organizations operating in the same line of business. E-Trade and E-Broker had bought numerous problems for the existing companies like Schwab Inc. Merrill Lynch and other companies offered prices such as low as $ 12 per trade, which is quite low as compared to the average pricing of trade of Schwab. Due to this particular issue, many of the customers had changed their working with Schwab Inc and moved towards other companies. According to the case, E-Trade had reduced price seven times since launching the trading on its proprietary system in the year 1993. According to the case study, everything was under control before the arrival of internet technology in the field of trading and the company was actually enjoying high revenue growth till 1998. In terms of commission charging, Schwab Inc came on the 7th position, and Merrill Lynch was on the highest position. It can be said that cost is the issue due to which Schwab Inc experienced high customer’s turnover and low profit.
Conclusion & Recommendations
Schwab was earning tremendously, and then the company should decrease their commission
It will not effect, if the company would decrease the cost lower than Merrill Lynch
The company should utilize its higher number of assets and customer base
There is a need of revising the pricing strategy of the company
Commission on the trade should be curtail down to a minimum level
The company should become more customers oriented rather that productivity oriented
Promotional strategies of the company should be enhanced considerably and should include online mediums as well, including Social Media Networking as well
Place strategy could be started in Online Mediums as well