Case Study From Harvard Business Case Study

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Opportunities
. Indian elevator market growth is very promising in the 1995 timeframe,
which is when this case study takes place. The low-end of the Indian
elevator market is experiencing 27% increases in unit shipments, and
17% unit increases overall.
. The market itself is highly fragmented for elevators in India. 70% of
the demand for elevators is at the low-end of the market; 20% at the
middle-end, and 10% at the top-end.
. High levels of recurring revenue are possible in the Indian elevator
market due to the large installed base of elevators and the high
maintenance fees Otis Elevator and other competitors have been able to
charge.
Threats
. As the Schindler Elevator learned in their strategies to enter the
Indian market with elevators (Columbus, 2005) the capricious and very
damaging effects of fluctuating tariffs can put a halt to any light
manufacturing or assembly in addition to the more intensive operations
of building subassemblies for consumption in other areas of the world.
. Otis elevator has a commanding market share and very high loyalty
rates in the installed base of India, making it especially challenging
for any new global competitor to move into the market.

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. Otis Elevator has pre-existing supply chain relationships and could
feasibly drive any competitor out of the market that attempts to reach
critical mass. In effect Otis could "shut out" any competitor in the
market due to their dominance in specific supply chains.
Recommendations
. Revise the product strategy to allow for high degrees of customization
and provide cost structures that allow for products that can be
tailored to the needs of specific small and medium-rise businesses.
. Create a "Replace Otis Now" strategy to target their competitor's
largest installations and get them to switch to Schindler through
aggressive pricing and 3 years of maintenance for free. If Schindler
can be successful with this strategy, their growth will be established
in India.
. Acquire smaller competitors and play the role of market aggregator in
the Indian market. Bring in the most seasoned of CEOs from these
smaller companies to run the Operations Department. Silvio Napoli
needs to be re-assigned to the Schindler headquarters in Switzerland.
This growth by acquisition strategy also gains Schindler an advantage
over tariffs on imported manufacturing components and also gains them
supply.....

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