PBS, AMP, E-commerce Management

1. Exhibit 2-1: Framework for Diagnosing Market Opportunity Seed Opportunity in Existing or New Value System Uncover Opportunity Nucleus: Identify Unmet and Underserved Needs Identify Target Segments Declare Company’s Resource-Based Opportunity for Advantage Assess Competitive, Technical and Financial Opportunity Attractiveness Make Go / No Go Assessment

3. Table 2-1: Segmentation Approaches

5. Exhibit 2-9: Schwab — Defining Existing or New Value System Release Trapped Value Create New Value

7. Exhibit 2-11: Schwab — Segmentation (1997 Timeframe) Buy and Hold Current Offline Schwab Customer High Net Worth (<$1M) Married Not Schwab Customer Other White Collar Frequent Trades Single Blue Collar Retiree University Student Children > 30 No Children < 30 Mature ( > 55) C I J K D E A G H F M L N O P B High Priority Secondary Priority Tertiary Priority De-emphasize

8. Exhibit 2-12: Schwab — Competitor Map to Segments Medium performance level High performance level Low performance level

9. Exhibit 2-13: Schwab.com Overall Opportunity Assessment

10. Exhibit 3-1: Components of a Business Model Value Cluster Marketspace Offering Resource System Financial Model

13. Exhibit 3-9: Schwab Resource System Optimize Staff in Branches Lower Prices Train IT Staff 24x7 Access Media General S&P Hoovers Phone Branch Online Charge For Value Added Services Provide Lower Commission for Frequent Traders Innovative Products Center of Knowledge and Innovation Investment in R&D Cutting Edge Technology Investment in IT System Reliability Multiple Points of Access Hire IT Staff Competitive Commission Rates Streamlined Operations Learning Center = Resources = Capabilities = Core Benefits Superior Service Partnerships with Content Providers Invest in CSR Training Align CSR Compensation with Quality of Service Customer Service Onesource

14. Exhibit 3-10: Schwab Resource System = Company needs to outsource or partner = Company can perform in-house Optimize Staff in Branches Lower Prices Train IT Staff Capable IT Staff 24x7 Access Media General S&P Hoovers Phone Branch Online Charge For Value Added Services Provide Lower Commission for Frequent Traders Innovative Products Center of Knowledge and Innovation Investment in R&D Cutting Edge Technology Investment in IT System Reliability Multiple Points of Access Hire IT Staff Competitive Commission Rates Streamlined Operations Learning Center Superior Service Partnerships with Content Providers Invest in CSR Training Align CSR Compensation with Quality of Service Well-Trained CSRs Onesource

15. Downsized branch staff High quality Investment Information Innovative products Low price Large, well trained sales force Technology Leadership Supporting Slide 3-K: Schwab Activity System Superior service Investment in IT 24 x 7 Customer service Exceptional team of engineers In-house technology development Large investment in R&D System able to handle large volume Increase in trade volume Increase in non-trade revenue Multiple points of access On-line Phone Branch Comprehensive information Partnerships with content providers Hoovers Online S&P Comstock Media General

16. Supporting Slide 3-L: Schwab Value Proposition “ Use technology to offer innovative products and superior service at lower prices to investors unwilling to pay for investment advice”

17. Exhibit 6-4: The Delivery System Needs to Support and Reinforce the Resource System Processes Assets Systems People Source:Christensen, Clayton M. 2000. Meeting the Challenge of Disruptive Change. Harvard Business Review 78, no. 2 (March-April). MAPPING THE RESOURCE SYSTEM DELIVERY SYSTEM Supply Chains

18. Exhibit 6-13: Schwab IT Infrastructure Source: Tempest, Nicole and Warren McFarlan. 1999. Charles Schwab Corporation (A). Case no. 9-300-024, 9 September. Boston: Harvard Business School Publishing.

22. Exhibit 7-12: Charles Schwab -- Customer Acquisition Stage Business Model Implementation & Branding Customer Financial Build brand Increase system uptime Train branch staff Improve customer service Increase customer loyalty Increase profit Optimize cost Increase revenue Invest in technology Increase number of IT staff Increase customer satisfaction Increase usage Acquire new customers Market Opportunity Avoid crowded markets Play in attractive market Target attractive segments Leverage capabilities to deliver offering Provide unique VP Provide attractive offering