...1. Otis has been the market leader in both sales and service segments. Consider the time when OTISLINE was just being conceived. Why do they need to do anything at all, and that too in the service sector? Higher Margins in Services-Elevator industry was highly competitive with players comprising Otis, Westinghouse, Dover, Montgomery, Schindler, U.S. Elevator and Fujitec. Otis was the industry leader in sales and service. The manufacturing companies were more focused on getting service contract rather than sales because the income proportion was substantially high in services as compare to sales. Also due to price wars in Sales, the margin was lower while services accounted for greater profit margin Direct correlation between effective service and sales in elevator industry- The service attracted many player because of its steady and high profitability. Moreover OTIS faces competition from small service providing companies in terms of competitive pricing. Cyclical Demand for New Elevators- Demand for new installations was directly correlated with building and construction cycle while existing services sector had a stable demand. Long-term Service Contracts- The primary basis of selection of service companies were based on prompt responsiveness, optimum quality and reasonable price. Also these contracts were negotiated for a long term which led to stable revenue streams. A centralized customer service system like Otisline different from commercial answering services...
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