By Haim Mendelson, Daricha Techopitayakul, Philip Meza
2000 | Case No. EC13 | Length 36 pgs.

This case study describes and contrasts the journeys of four brokerages into cyberspace: discount broker Charles Schwab; and full-service brokers Merrill Lynch, Morgan Stanley Dean Witter and PaineWebber. While online brokers had designed their business models around Internet capabilities, full-service brokers had to adapt business models that were developed long before online trading existed. The case describes the different paths each brokerage pursued in an effort to incorporate the functionality of the Internet into their service offering up until 1999. It also illustrates the difficulties of transforming an organization, especially when the transformation requires the cannibalization of current offerings and the management of channel conflict.

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