. 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.
. 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...
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