Otisline Porters 5 Force

PORTERS 5 force

• Threat of a new entrant: High entry barrier, Competitive and thus difficult for a new entrant
• Threat of substitutes: Transition cost from one elevator to another is very high, however the substitutes available is very high for the sale of new elevators

Major revenue is generated from the services and maintenance, large number of big and small players available and the project is given to the company with the lowest bid.

However with the new microcomputer chip specialized tools were necessary and thus only the installing company could do it

• Buyers bargaining power: During the new installation the buyers bargaining power is very high
• Suppliers: NA
• Internal Competition: Internal competition is very high

Before the OTISLINE came in OTIS was the leader in the elevator market industry. However there were a number of players as we can see from the Porter’s 5 force that the threat of substitutes were pretty high especially in the service sector when the elevators were old and the cost of servicing was pretty high. A service company was also selected based on the responsive time and quality of service provided. Service Industry was stable and generated high profitability. It was a bigger industry than the sale of the elevator itself

 OTIS was in need of a drastic change in the way it provided services. It needed a drastic change in the way it maintained the database of the customers.

VALUE CHAIN BEFORE OTIS

After sales Services: Needed up gradation. This was the requirement for OTIS to increase its competitiveness and maintain its position as the leader in the elevator market.

Marketing and Sales: Needed to maintain good marketing and sales services t maintain the position in the market

Then came OTISLINE

The second question could be answered by using the model which he had taught the impact of an IT solution. The various aspects