Otis Elevator

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Question 1: What kind of company is Otis? OTIS Elevators started out in 1853 by the invention of the “safety brake elevator.” Their core business is designing, installing and provide service within the industry of elevators, escalators and walkways. Today OTIS operates worldwide, with headquarter in the U.S. and different facilities located in European and Asian countries. Through this they have managed to become market leaders in their field. Throughout time the business focus of OTIS have changed. Today the focus has moved from the manufacturing area towards a more total solution, where the most important is to provide a high class customer service. This is to be seen through their vision: “To become the recognized leader in service excellence among all companies – not just elevator companies – worldwide.” Question 2: What are the sources of income of Otis? OTIS’s source of income is to be divided in two parts, as follows the development of the market. New markets, as China, mainly profits with new sales, e.g. 62,000 units of elevators and/or escalators were installed in China in 2002. Concerning the more mature and satiate markets, as Western Europe and the U.S., 75 % of the profit is provided service. This allocation of income also reflects the customer demand, as the ability to satisfy elevator performance and specification, together with the service cost often becomes the customer major consideration. This often concludes in discount long-time service contracts offered by the elevator suppliers. The reason for this reaction is understandable as that the elevator service market is high competitive due to its steady demand, low entry barriers and high profitability. A further indication is that the revenue, now coming from China, eventually will move from new sales toward provided service. This is estimated since the Chinese market, by time, will become a more mature market. Question 3: How did Otis report elevator failure before 1986? Before OTISLINE were installed the service personnel were dispatched from local offices. With no interaction between the different offices, OTIS had a minimal level of communication throughout the entire cooperation regarding the service area. Due to this the knowledge sharing was very poor and each local office handled each service request single handed, minimizing the efficiency. Further, the communication throughout the organization was also very poor, where service problems never reached the senior management until they had become critical situations. All together this had a negative impact on the service time causing the customers unnecessary waiting time.

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