Case Study Analysis: Business Strategies of Otis Elevators

This case study analyzes the corporate-level strategies of Otis Elevators, a global leader in the elevator industry. The analysis examines how Otis achieved business growth and development, and how it established a strong competitive position. The study explores the company's use of both vertical and horizontal growth strategies, including expansion into new geographic markets and acquisitions. It also delves into Otis's business diversification strategies, specifically focusing on their profit model and innovative approaches to elevator technology. The case study highlights the company's commitment to innovation, from the invention of the safety elevator to the development of energy-efficient and technologically advanced systems. The assignment provides a comprehensive overview of Otis Elevators' strategic choices, including their adoption of the profit model, and their ability to adapt to changing market conditions, thereby contributing to its continued success in the global market. The study provides recommendations for the further growth and business development of the company.

Running head: BUSINESS CASE STUDY ANALYSIS
Business Case Study Analysis
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Executive Summary
Otis Elevators is one of the largest elevator companies across the globe, that has acquired
a lot of name and fame because of the way by which it has promoted the growth and
diversification of its business worldwide. Otis Elevators has made extensive use of innovation
and vertical and horizontal models of growth in order to expand and multiply its enterprise in all
of countries of the world where it is seen to be operating. This assignment engages in a case
study analysis of the Otis Elevator company, analyzing specifically the corporate level strategies
that the company has made use of in order to attain business growth and development and root
out effectively in the process, all possible competitive and rivalry.

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Table of Contents
Introduction......................................................................................................................................2
1. Company Overview – OTIS Elevators.....................................................................................2
2. Understanding the Corporate Level Competitive Strategy of Otis Elevators..........................4
2.1. Strategies to Attain Vertical and Horizontal Business Growth.........................................4
2.2. Business Diversification Strategies using the Profit Model..............................................5
3. Recommendations for Further Growth and Business Development........................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Introduction
The term competitive strategy refers to the long term plan or approach that is adopted by
a company for the purpose of gaining competitive advantage over rivals or competitors in the
industry or the market in which it operates. The primary aim of a competitive strategy is to create
a position of defense in the industry while also generating what may be termed as a superior
return on investment or ROI, at the same given time (Babafemi 2015). This assignment prepares
a report that analyzes the competitive strategies adopted by OTIS Elevators to stay ahead in its
game, by referring to a case study on the same. The analysis is carried out specifically using the
perspective of corporate level strategy, which is one of the key competitive strategies used by
firms to establish prominence and defeat rivals and competitors. Corporate level strategy is
undertaken by a company when it aims at establishing growth and stability in the industry in
which it operates, for the most part through the provision of innovate and high quality products
and services.
1. Company Overview – OTIS Elevators
Otis Elevators is one of the most well-known of elevator companies in the world and has
made a name for itself because of the high quality and innovative technology of its elevators,
with the company now having a presence in as many as two hundred countries across the globe.
The journey to the top has not been an easy one and the owners and business managers of the
company have had to strive for excellence over the years, given customers a product that they
could find little or no fault with and which added great convenience and efficiency to their lives.
The fact that OTIS Elevators is a company that has always been committed to the goal of growth

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and innovation is something that becomes quite evident when one looks at the history of the
company. In the year of 1852, what may be termed as a safety elevator was invented by Elisha
Otis for the person who he was working for. Upon witnessing the success of the product, Elisa
Otis went onto develop more of such elevators selling as many as three elevators in the year of
1853, with each of these elevators being priced for $ 300 respectively. Sales then slumped for a
couple of years and it was not before 1854 when an elevator was showcased at an exhibition in
New York City by Elisha Otis once again that sales gradually began to rise, and by the year of
1855 the company Otis Elevators was officially formed and launched (based on the case study
provided).
Following its success in the United States of America, Otis Elevators took the decision to go
global and began to set up offices in important cities in Europe and the United Kingdom such as
London as well as Paris, with a purchase being made of an important competitor company,
known as the American Elevator Company. A few of the initial clients of the Otis Elevator
Company in the global sphere included the Hungarian Royal Palace, Balmoral Royal Castle, the
Kremlin, Glasgow Harbor Tunnel, London Underground Railroad as well as the Eiffel Tower.
Elevators were also constructed for apartments and offices located across the length and breadth
of Europe. By the year of 1861 the Otis Brothers took over the company officially and by the
year of 1867, American Elevator Company was officially incorporated into Otis Elevators,
making this company one of the largest and most successful elevator brands in the whole world
(Based on case study provided).

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2. Understanding the Corporate Level Competitive Strategy of Otis
Elevators
Corporate level strategy refers to the plan or decision that is adopted by a company in order
to be able to achieve its business goals and objectives in the manner desired. While a corporate
level strategy is generally long term in its nature and scope, it is flexible enough to allow for
dynamic adjustments to be made along the way, on the basis of changing market conditions and
also on the basis of uncertainty (Basu 2017). Three renowned corporate level strategies as
undertaken by firms worldwide are business growth strategy, business diversification strategy
and business stability strategy. This section will analyze all the three corporate level strategies by
referring to the case of the Otis Elevator Company and its success worldwide.
2.1. Strategies to Attain Vertical and Horizontal Business Growth
The business growth strategies are strategies that make use of methods to derive more
revenue from the sales of goods or products. There are usually two types of business growth
strategies namely, horizontal growth strategies and vertical growth strategies. The vertical
growth strategy is one that is aimed at taking of numerous components that lie in the path of the
company’s operation so that it is better able to control quality, supply as well as other types of
business needs (Puranam and Vanneste 2016). The horizontal growth strategy is a decision made
by a company to produce and distribute products and services in new target markets or
geographic areas (Cirillo 2019). Both strategies appear to be quite evident in the operations and
strategies undertaken by the Otis Elevator company to attain success worldwide. Otis Elevators
decided to formally become a company upon experiencing successful elevator sales in the early
years of the decade of the 1980’s in the USA. Based on such success it took the decision to offer
its elevator produce in new target markets or geographic areas such as in the cities and towns of

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Paris and London among others. Upon expanding to the continent of Europe and experiencing
success in elevator sales over here, the American Elevator Company, a rival or competitor
company which was running operations in this part of the world was gradually acquired by the
Otis Elevator Company with the Otis Brothers formally taking over company operations in the
early to late 1960’s, thus acquiring or achieving immense business growth in the process, while
making its products and services to new geographic areas at the same given time (based on the
case study provided).
2.2. Business Diversification Strategies using the Profit Model
Business diversification strategy is a strategy that is undertaken by an enterprise for the
purpose of ensuring good marketing and sales of a product, primarily through innovation
(Burgelman 2015). More often than not, business diversification is carried out using a profit
model which refers to the strategic attempts that are made by a business to make its products and
services viable and profitable (Burgelman 2015). This profit model is divided into various sub
types. In this case study analysis, the profit model of production will be used to see how Otis
Elevators produced and diversified its elevator products, using innovation to establish business
prominence worldwide.
It is clear from reading the case study that has been provided that one of the key reasons
that accounts for the success of a company like Otis Elevators is the fact that it has taken
recourse to the use of innovation to enhance the appeal of its elevator products and services. It
started by creating an interesting product known as the safety elevator in the 1850’s and 1860’s,
the success of which led the company to expand to foreign shores. By the early part of the
1900’s, the Otis Elevator company had managed to create elevators that were capable of going
up by as many as ninety meters, facilitating in the process, what may be termed as the skyscraper

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revolution in the world. In the era of the Great Depression, Otis Elevators was able to identify a
new revenue stream, by demanding for money to be paid for the adequate upkeep and
maintenance of elevators. More innovations were brought about after the Second World War and
in the years following 1948, and today the company has even managed to diversify its products
and services to include elevators that are characterized by remote access systems. Such systems
make it possible for a company to carry out maintenance work for an elevator from quite a
distance, which in turn results in a reduced down time and makes the maintenance and repair of
elevators far easier and quicker than what it used to be before. Such a system make it quite easy
for the company to track the performance of the business while also keeping track of customer
requests and queries including log service requests from the computers that they were using for
this purpose (based on given scenario).
In the early years of the 21st Century, the elevator business of the Otis Elevator Company
was diversified once again to include a polyurethane coated small and flat steel belt that was
capable of lifting elevator cars and which could provide traction now in the place of the steel
cables that had been used to perform the same action for the last one century. There were many
advantages that came with the introduction and use of such new technology. To begin with,
energy efficiency was brought about, the elevator rides now felt far smoother compared to how
they had felt in the past and the need for a machine room for housing an elevator is something
that was eliminated once and for all. Business diversification was also introduced by bringing
about yet another innovation, that is, the use of a carbon fiber which put elevators in a position to
travel for as much as one kilometer at a stretch, which is double of what it was able to do through
the use of a steel cable. Since the weight of carbon fiber is much less than the weight of steel
cables, it is capable of running by creating a far lesser load and is consequently enable to travel

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over a far greater distance at a given moment compared to what steel cable can do (based on
given scenario).
In the course of the last ten years, the business diversification strategies of Otis Elevators
have caught much attention, with the company slowly and steadily emerging as a top name as
producer of energy efficient elevators. Some of the elevators that are today manufactured by the
Otis Elevator Company are those that come with battery power, switching over to the use of
battery power in the event that the main source of power happens to fail. A regenerative drive
was introduced by the Otis Company in the year of 2005 using which kinetic energy is released
to generate electricity, at the time that the elevator is descending (based on given scenario).
Software solutions have also been experimented with on the part of the Otis Elevator
Company to make sure that customers are provided with the best possible experience when they
decide to make use of an Otis Elevator. There is a Compass Interface System that has been
developed by the company which puts users in a position to determine the exact floor that they
would like to be travelling to prior to entering the elevator to travel up or down (Shaukat et al.
2016). Current requests are evaluated by such a system and the best type of elevator for use by a
particular customer is also something that is determined through the use of this system after
which the customer is directed into that particular elevator. Efficiency is something that is
enhanced by as much as twenty to forty percent through the use of this elevator system, and the
value that this innovation has added to the Otis Elevators has enabled the company to make rapid
and massive sales for the product worldwide (based on given scenario).
Otis is a company that has thus emerged as a major player in the elevator industry
worldwide because of the diversification and innovative strategies that it has undertaken in order

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to enhance the appeal of elevators and to improve marketing and sales in the process. The
company has not left any stone unturned to make use of digital technology, software solutions
and other types of mechanisms and innovations that have enhanced or added to the value of Otis
Elevators, thus creating a high demand for such elevators in each and every part of the world.
Apart from using the production model quite effectively to launch elevators that are appealing
and in demand among customers worldwide, the advertising model is also something that the
company has managed to cash in on to do good business around the world (based on the case
study provided). It needs to be remembered in this respect that digital technology is bringing
about a massive change in the way by which people are communicating about products and
services in today’s day and age. Online platforms are now being increasingly used by businesses
to spread information about the products and the services that they deal in. The interactive
television screen is also a new innovation which Otis Elevators is utilizing in order to get those
who advertise and promote the business to make huge money for the company. There are a
number of advantages that are associated with the use of the interactive television screens that
has contributed to Otis Elevators doing so well upon its use, such as providing customers with
quick and important information about problems, ensuring quick advertising, giving trapped
passengers the option of interacting with rescuers in order to get out of a trapped elevator as soon
as possible and to give bored customers some entertainment when they make use of an elevator
(Based on case study provided).

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3. Recommendations for Further Growth and Business Development
In spite of the fact that Otis Elevators is a business that is doing so well, there are a number
of recommendations that Otis Elevators can keep in mind to improve upon its products in the
future.
 An improvised version of the cable car which enables an elevator to go in vertical or
horizontal direction is something that Otis Elevators can use in order to get ahead of
its competitor Thyssen Krupp in this respect. The fact that such elevators entail the
use of shafts which are of a smaller size make them ideal for use in small sized
buildings, increasing the usable area in a building by as much as twenty five percent
on an average (based on given scenario).
 The Otis Elevator Company can also consider the use of additional pressure cabins
along the lines of what is used in an aeroplane, making it possible for an elevator
system to go up and down at an incredible speed (based on given scenario). By
introducing such an innovation, the company will be able to enhance its revenue
streaming process, making even greater profit than what it is right now (Yuan et al.
2018).
Conclusion
Thus, the analysis of the given case study shows how corporate level strategies like
business growth and business diversification strategies including the use of profit models like
production and advertising models have gone a long way in helping the Otis Elevator Company
to establish its position in the international market place and root out competition in every form.
While a bit of competitive rivalry is something that is still seen to exist for the company, it can

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incorporate the recommendations provided above to eliminate any type of rivalry or the threat to
the business once and for all.