Executive Summary (Part 4)

Capacity Management Issues

Throughout its history, Schwab has made several capacity investments to meet customer demand.  Several of these capacity investments will need to be effectively managed in order to allow the firm to succeed in the future.  The key capacity issues center about the following investments and how they will be utilized as Schwab continues to evolve its customer intimacy value discipline and business model for each customer segment:

  • Branch Office Network – should this be upgraded and used as a channel for U.S. Trust?
  • Regional Call Centers, providing TeleBroker and Schwab by Phone – can this be leveraged with cellular communication devices to execute orders comparable to the online service?
  •, CyberCorp & its Web Servers – can or should CyberCorp replace
  • Schwablink & its Network of Fee-based Financial Advisors – can the relationship be saved when customers move to U.S. Trust? Should it be saved?
  • U.S. Trust Wealth-Management human capital – cost of knowledge transfer may be too high, i.e. exodus of human capital to competitors.

Progressing towards customer intimacy will require the evaluation of the existing capacity infrastructure to ensure that the means for delivering “the right product and service to the right customer” is appropriate. Additionally, Schwab’s business model will need to be adjusted to assure that customer demands can be met with a combination of IT and human capital (firm advisors or independent advisors).


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