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OtislineA B Slides
OtislineA B Slides
Service
Elevator Manufacturing and Sales Highly correlated to the building cycle Only a few competitors A low-margin business Several buyers involved in the purchase decision -- for example, the building contractor, architect, and building owner Competition between companies is based on price, reputation, and ability to satisfy elevator performance specifications and architectural requirements High barriers to entry
Elevator Service
Low barriers to entry; many elevator service companies were started by prior employees of elevator manufacturers. Fragmented: thousands of elevator service organizations. Stable demand and high profitability. Elevator manufacturers were awarded 60% to 80% of the service contracts for newly-installed elevators.
Cost of service is more important as buildings age and competition for tenants intensifies.
Diagnosis of elevators with microprocessor-based control systems often requires proprietary maintenance devices. The manufacturer was more likely to retain the service contract for these elevators.
Company Overview
Otis is the industry leader. Otis pursues a differentiation strategy. It specializes in elevators for large, complex buildings and sells quality, service and the ability to customize elevators. Its products sell for a premium price.
If the information coming from OTISLINE is used appropriately, the system may enable Otis to become more customer-service oriented. OTISLINE significantly transforms information flow within the organization.
Otis must market OTISLINEs capabilities. A competitive advantage that is not properly positioned is not a competitive advantage at all.
After OTISLINE
Routine Reporting
Zone
Routine Reporting
Problem/complaint reported
Answering Service
Mechanic dispatched and fixes problem
Mechanic
Mechanic paged
Source: Stoddard, D. and Applegate, L., Otisline Teachning Note, Harvard Business School Case #5-187-086
Enhancing OTISLINE is an ongoing but significant responsibility. Competitors will undoubtedly respond with similar systems, probably with some enhancements. Finally, addressing the organizational and human resource issues is critical. The value of OTISLINE to the company is very compelling. Dealing with organization resistance is an important management challenge.