Business Trade Assignment

Topics: Strategic management, Initial public offering, Economics Pages: 2 (597 words) Published: August 25, 2013
Assignment II - Chapter 5 – Page 186

How E*TRADE Uses the Internet to Gain a Low-Cost Advantage


The E*TRADE closing case is a perfect example of how the advantages of the opportunities offered by Internet could provide companies with possibilities to overcome barriers to entry and compete in the same level with leaders of specific market segmentation. The case also has shown the importance of how the company’s business policy and business strategy can be used to transform a company reliable and viable to its clients even though if it has to control its cost structure.

Case Discussion Questions

1. How have E*TRADE‘s business model and business level strategies changed overtime? The E*TRADE business model was created to take advantages offered by Internet to overcame barriers to entry and to make possible a new business compete with large and established companies. To do so, the company business model was based on its business level strategies that have followed two concepts of the costumers needs: price and quality. The E*TRADE business strategies came up with a new software and hardware that made possible the customers make their own trade with a low costs and high quality. The changed overtime of E*TRADE business model and business strategies started when the company came under pressure of a new generation of online brokerage houses. Those new companies began offered the same services for as low as 50% of E*TRADE’s services. The new strategy had to be taken and E*TRADE started a new differentiation appeal to its costumers offering a new software and hardware even easier to be used for the same price.

2. What is happening in the stockbrokerage industry today? How has E*TRADE been altering its business model and strategies to compete? The today’s stockbrokerage industry is passing by a general process of differentiation. The pressure that...
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