Product design and development strategy at Charles Schwab

Organizational Behavior -- Charles Schwab

How product design is applied in decision-making of that organization?

Charles Schwab focuses primarily on the needs of individual and small business investors over the lifecycles of their investment careers, selectively adding in new products and services to meet unique needs over time (Prasso, 2011). The new product development and design process is also aligned to major shifts senior management sees in the market. This factor driving product design at Schwab has most recently centered on as Do It Yourself (DIY) approach to defining 401K contributions and other investment options (Palmer, 2010). Product design then is defined by stage of the customer life cycle for the majority of new products and services, designed to approximate the level of risk and return consumers in each class of investor consider acceptable (Prasso, 2011).

How different Issues for Product Development are applied in the organization?

There are the external market issues that Schwab must content with when defining a new financial product or service, while also taking into account the internal strengths and key success factors inside the company. VPs and directors of product management are responsible for ensuring new financial services and products stay aligned to internal Schwab requirements while also breaking new ground from a market development standpoint (Palmer, 2010). Creating new services at Schwab is one that also requires planning for ROI and other measures of financial performance, often with a clear definition of who the target markets are and what their per capita income levels are amount of risk they are willing to take, and investment goals. New product development is more of a process for aligning financial services to key members of a customer segment than it is about just crunching numbers in a financial model (Fletcher-MacDonald, 1998). In conclusion, Schwab's product and services strategy is only limited by the availability of internal processes and systems within the company cable of supporting transactions and reporting for customer and business accounts. This aspect of Schwab's product lifecycles explains why product managers need to have extensive information systems expertise to do well (Prasso, 2011).