Case Study Analysis: Otis in the Global Elevator Industry, MGMT19128

This case study analyzes Otis Elevator's strategic management within the global elevator industry. The report begins with an executive summary and an overview of the company, including its market position and history. It then delves into an external environmental analysis using the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors impacting Otis. The study critically assesses Otis's capabilities and competencies, including its customer base, brand image, global presence, and technological advancements, in relation to its major competitors. The analysis evaluates whether these capabilities are sufficient to address future challenges, such as strong competition and the threat of imitation. The report concludes by summarizing the company's competitive strengths and weaknesses, emphasizing the need for continued investment in research and development to maintain its leading position.

Running head: Case study based assignment on strategic management
Case study based assignment on strategic management
Name of the company
Name of the University
Author note

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Executive summary
The aim of report is to give an analysis on the case called ‘Otis in the global elevator industry’.
Thus the study starts by giving a brief introduction of the entire discussion and a general
overview of the company based on the given case study. The study proceeds with analysis on the
external environment of the company and its impact on it. For the purpose of external
environmental analysis the paper conducts PESTLE analysis. It also critically analyses the
capabilities and competencies of Otis and whether these factors help the company to remain in
an advantageous position or not. Finally, the study gives a summary of the whole discussion.

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Table of Contents
1. Introduction..............................................................................................................................2
2. Overview of the company........................................................................................................2
3. External environmental forces influencing the company.........................................................3
3.1 Political factors......................................................................................................................3
3.2 Economical factors................................................................................................................3
3.3 Social factors.........................................................................................................................3
3.4 Technological factors.............................................................................................................4
3.5 Legal factors..........................................................................................................................4
3.6 Environmental factors............................................................................................................4
4. Critically analysis the capabilities and competencies of the company.....................................5
5. Analysis of the company's capabilities and competencies are sufficient to cope with the
future challenges..............................................................................................................................6
6. Conclusion................................................................................................................................6
7. References APA.......................................................................................................................6

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1. Introduction
The purpose of the study is to give an analytical report on the concept of strategic
management based on the case study of the global elevator company Otis (Schonell, 2018).
Hence in order to proceed with the discussion the paper will begin by giving an overview of the
company in terms of its markets position and other aspects. In order to analyze in a detailed
manner, the study will analyze the external environment of the company and its impact on it. The
further discussion critically evaluates the capabilities and competencies of Otis and whether
these factors help to remain in an advantageous position or not. Additionally the study also sheds
light on whether the company is capable enough to address future challenges with the
capabilities and competencies. Throughout the entire discussion, the whole discussion gives
references to irrelevant theories of strategic management, and finally, the report concludes by
summing up the entire discussion.
2. Overview of the company
The company Otis is one of the leading companies among the elevator industry. Being
part of the well known united technologies, Otis sells its products over 200 countries across the
globe. Elisha Otis in the year of 1852, invented safety elevator for her employer and in the
following year he went further, started inventing elevators (Schonell, 2018). In the year of 1854,
then he sold 7 elevators and in the year of 1855, he sold 15 elevators. This is how the company
started its journey. Soon after its establishment the company started exploring international
markets of elevator industry and provided elevators for the popular Harbour Tunnel, Hungarian
Royal Palace, Balmoral Castle, Eiffel Tower and many other buildings across Europe. The Otis
brothers continued the process of innovation and by 1901, as an achievement the company made
to possible to make elevators which were able to go up the more than 90 meters by enabling the
revolution of skyscraper (Schonell, 2018). The other achievement of the company was
‘automatic elevator’ which does not require an operator. In the year of 1976, the United
Technologies took over the company and started operating Otis as the subsidiary (Schonell,
2018). Over past decades Otis has been able to become a leading company in making energy
saving elevators. The company also used digital technology in its product and continued

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incorporating innovations in its products while securing its position in the global market of the
elevators as a leader. According to Schonell, (2018), the company presently has approximately
65000 employees, out of which 53000 employees belong from outside of USA. The revenue of
the company marked US$13 billion in the year of 2014.
3. External environmental forces influencing the company
In order to analyze the external environment of the company, the PESTLE analysis will
be conducted which will include political factors, economic factors, social factors, technological
factors, legal factors and environmental factors.
3.1 Political factors
Since Otis operates in the global markets, the government policy of each of the country
impacts the business of the company. As per Georgiou, (2014), the United States of America
enjoys a quite stable climate in terms of politics. Apart from politically stable climate, the
advanced in infrastructure made it possible for the country a favorable destination of business
(Van den Berg, 2016). Thus the flexible trade policies of the government are one of the reasons
why most of the multinational companies chose the country to set up its business. Hence, it can
be said that the impact of the political factors of the on the company is positive to grow further.
3.2 Economical factors
The United States of America has the largest economy across the world. As per
Statista.com, (2018), the GDP of the country increased by 1% in the second quarter of 2018 in
comparison with the previous quarter. In the second quarter of 2018, the GDP of the country
marked $5,100,626 million making up as the leading economy in the world. It is seen that such a
healthy economy of a country pulls a large amount of investment both domestically and
internationally. Thus it can be said that Otis is in an advantageous position in terms of the impact
of the economical factors.
3.3 Social factors
The major social factor that influences the company most is the demand for elevators.
The development of skyscraper has been seen to be increased in the past few decades in a rapid

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manner across the world (Kinateder, Omori & Kuligowski, 2014). Hence naturally the demand
for elevators also was high creating a business opportunity for the company. The growing
demand for automatic elevators without human assistance further created wider opportunities for
Otis. Apart from the skyscraper, the inability of the elderly person to walk up stairs is another
influencing factor on the company (Kwon & Beamish, 2013). Presently, it is seen that nearly all
major buildings including residential as well as commercial have demand elevators so that
people can save both time and physical energy. Hence the growing social trend of elevators in
both the developed countries and developing countries positively influence on the business of
Otis.
3.4 Technological factors
Over the years, Otis has been incorporating the latest technologies in the manufacturing
of elevators. For example, polyurethane-coated steel belt, carbon fibre, energy saving
technology, regenerative drive, digital technology and many other technologies are used by the
company for the purpose of product innovation of the company (Schonell, 2018). Otis has
brought revolutionary change in the elevator industry by introducing ‘automatic elevator’
(Anand & Mahesh, 2016). Beside of manufacturing, the company also provides technological
support and service to its customers. Hence, it is seen that the extensive use of technology helped
the company to position itself as the global leader in the elevator industry.
3.5 Legal factors
Since the company operates in the international market, it is required for the company to
fulfill all the legal directives of the domestic market and international market in order to assure a
smooth business process. The Safety Act of each of the markets that it operates in must be
ensured since accidents often occurred in elevators. The recent Hong Kong Mall accident in
regard to the legal obligation deserves mention. As per Scmp.com, (2018), 18 people died in the
accident for which the Hong Kong business of Otis was fined US$40,800 on safety and security
ground. Thus in order to avoid such obligations, the company needs to take precautionary
measures since it affects the brand image of the company adversely.

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3.6 Environmental factors
Being the largest economy in the world, the USA government has strict directives so that
the business industry does not harm the ecological balance of the environment. Thus the
company keeping the environmental factors in mind has introduced energy-saving technology
which consumes less energy while operating (Sachs, Misuriello & Kwatra, 2015). Thus it can be
said the company assures competitiveness in the industry by focusing on environmental aspect.
4. Critical analysis of the capabilities and competencies of the company
Before analyzing the capabilities and competencies of Otis Elevator Company, the
competitors of the company need to be mentioned. ThyssenKrupp, Schindler Group, Kone and
Mitsubishi Elevator are the major competitors of the company (Schonell, 2018).
 Otis being one of the oldest companies in the elevator industry holds a large customer
base.
 In addition, the company has installed elevators in the most popular building and
structure like Eiffel Tower, Burj Khalifa, World Trade Center and so on which has added
value to the brand image of the company while increasing its competitiveness in the
industry.
 The company provides service over more than 200 countries across the world.
 Meanwhile it gives special attention to product development and incorporating
technologies and intelligent system in its products in order to remain ahead in the
business world.
 On the other hand, the major strength of the company is its huge employees comprising
60000 people across the world.
 The large business network of the company makes it enable to generate a huge amount of
revenue from the industry.
 The company is enough potential with resources to operate in the international markets
like the Asian countries in a more integrated manner.
 The R&D is another resource of the company that makes it capable to implement new
technologies and hold the position in the market.

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5. Analysis of the company's capabilities and competencies are sufficient to
cope with the future challenges
The major future challenge or threats for the company are the strong competition and the
imitation of the company’s product and technology. Thus from the above analysis, it can be seen
that the strong history and customer base will enable the company to company to compete with
other companies since trust is major factor in terms of safety. However, the company is in a
vulnerable position as there is information available regarding the technology used by the
company in its product. Thus Otis needs to focus more in order to keep the product details secret.
6. Conclusion
Thus conclusion can be drawn that the company is enough competitive in the industry.
The company has enough resources and as strong brand image which helps the company to
remain in the advantageous position. However, as per the above analysis, the company needs to
give special attention on R&D since there is threat of imitation of the technologies use by the
company.

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1. References APA
Anand, R., & Mahesh, M. (2016, August). Analysis of elevator drives energy consumptions with
permanent magnet machines. In Smart Energy Grid Engineering (SEGE), 2016 IEEE (pp.
186-190). IEEE.
Georgiou, M. (2014). Political Stability and Economic Growth: A Panel Data Analysis for EU,
Japan and USA (1998-2013). Journal of International Relations 11(8)
Jorgenson, D., Gollop, F. M., & Fraumeni, B. (2016). Productivity and US economic
growth (Vol. 169). Elsevier.
Kinateder, M. T., Omori, H., & Kuligowski, E. D. (2014). The use of elevators for evacuation in
fire emergencies in international buildings (pp. 1-29). US Department of Commerce,
National Institute of Standards and Technology.
Kwon, H. J., & Beamish, J. O. (2013). Older adults in multifamily housing: Residential
satisfaction and intention to move. Family and Consumer Sciences Research
Journal, 42(1), 40-54.
Sachs, H., Misuriello, H., & Kwatra, S. (2015). Advancing elevator energy efficiency. American
Council for an Energy-Efficient Economy: Washington, DC, USA.
Schonell, S. (2018). Case 12 : Otis in the global elevator industry / Stuart Schonell [electronic
resource]. Retrieved from
https://cqu-a.alma.exlibrisgroup.com/view/delivery/61CQU_INST/1297405340003441
Scmp.com. (2018). Lift firm fined HK$320,000 over Langham Place escalator accident.
Retrieved from https://www.scmp.com/news/hong-kong/law-crime/article/2136585/lift-
firm-otis-fined-hk320000-over-hong-kong-mall-escalator
Statista.com. (2018). United States - Gross domestic product (GDP) 2022 | Statistic. Retrieved
from https://www.statista.com/statistics/263591/gross-domestic-product-gdp-of-the-
united-states/

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Van den Berg, H. (2016). Economic growth and development. World Scientific Publishing
Company.