Acknowledgement

First, we owe our particular gratitude to Mr. Harry Jayewardene the Chairman/ Managing

Director of Aitken Spence (pvt) Ltd for giving us the opportunity to carry out a research on

Competitive advantage of one of the subsidiaries of Aitken Spence group.

Mainly our sincere thanks goes to Mr. Kolitha Wijesundera, the Directors of ACE Elevators for

giving us his fullest support whenever needed, and highly appreciate the technical staff including

Mr. Rasika Amarasiri who helped us to gather information on technical background of elevators

in a short notice.

Most importantly we owe our gratitude to our lecturer-in-charge, Ms. Virangi De Silva, for her

invaluable guidance of this thesis. She has mentored and guided us for the past 5 months and

cultivated our capabilities of research. She gave us many insightful and constructive comments

along our research journey. It is always a pleasure to work with Ms. Virangi and appreciated her

remarkable help.

We would take this opportunity to thank each and every person not mentioned here, who helped

us to make this a success.

We dedicate this research for our friends and also who are interested in Business Management

field and future Researches.

1

Contents1.0 GENERAL INTRODUCTION..............................................................................................................4

1.1 History of elevator industry...............................................................................................................5

2.0 Introduction to the Problem...................................................................................................................6

2.1 Statement of the Problem...................................................................................................................7

2.2 Research objective.............................................................................................................................8

2.3 Purpose and scope of the study..........................................................................................................9

3.0 COMPANY PROFILE........................................................................................................................10

3.1 History of the company...................................................................................................................11

3.2 Management Hierarchy...................................................................................................................11

3.3 Product Portfolio.............................................................................................................................13

4.0 Theoretical Perspective........................................................................................................................14

4.1 Chapter Overview............................................................................................................................15

4.2 Competitive Advantages of ACE Elevators.....................................................................................15

4.2.1 Major Competitors of ACE Elevators......................................................................................16

4.2.3 Gaining Competitive Advantage over Rivals................................................................................18

4.3 SWOT Analysis...............................................................................................................................20

4.4 Value Chain Analysis of ACE Elevators.........................................................................................21

4.5 Porter’s Diamond Analysis to ACE.................................................................................................23

5.0 Research Methodology........................................................................................................................25

5.1 Chapter Overview............................................................................................................................26

5.2 Research design...............................................................................................................................26

5.3 Sources of data collection................................................................................................................26

5.4 Sampling Plan..................................................................................................................................27

5.5 Assumptions....................................................................................................................................28

5.6 Research schedule............................................................................................................................28

6.0 Data Analysis......................................................................................................................................29

6.1 Chapter Overview............................................................................................................................30

6.1.1 Analysis of the customer feed back..........................................................................................30

6.1.2 Market Share Analysis..............................................................................................................35

2

7.0 Findings...............................................................................................................................................40

8.0 Recommendations...............................................................................................................................44

9.0 Limitations..........................................................................................................................................48

10.0 Conclusion.........................................................................................................................................50

11.0 Annexure...........................................................................................................................................52

11.1 Bibliography...................................................................................................................................53

11.2 Questionnaires..............................................................................................................................53

3

1.0 GENERAL INTRODUCTION

4

1.1 History of elevator industry.

History of this sector went to c. 287 BC – c. 212 BC, the first elevator was made by Archimedes

probably in 236 BC. Some historical literacy source mention elevators as cabs on a hemp rope

and powered by animals or by hands. Some historical source mentions these kinds of elevators

were installed in the Sinai monastery of Egypt. In year 1000 al-Muradi author of the “Book of

Secrets” explained uses of an elevator-like lifting device, in order to raise a large battering-ram

to destroy a fortress. The archetypes of elevators were located in the palace buildings of England

and France in 17 century.

In this industry there was a new innovation happened, that was introduced screw driver elevators.

The first screw driver elevator was built by Ivan Kulibin and installed in “Winter Palace” in

1793. After few years later another Kulibin's elevators was installed in “Arkhangelskoye”. After

starting coal mines in 19th century elevators operated by steam power and used to move goods in

bulk in mines. In 1823 designed an ascending room for elevators it was designed for attracted

tourists and give panoramic view for passengers. This ascending room was built by two

architects, Burton and Hormer in London. A belt-driven elevator with a counterweight named

“Teagle” was innovated in 1835 by Frost and Stutt in England.

In 1846 Sir William Armstrong was invented hydraulic crane and that one added to elevators

because still they use steam power. In 1850 Henry Waterman was invented “standing rope

control" for an elevators. Year 1852 was a another turning point of this sector, because Elisha

Otis invented the safety elevator that means if cable was broken cab of the elevator automatically

stopped and it will help to increase the safety side of this sector. Elisha Otis installed his first

elevator in New York in 1853. In 1880 the first electrical elevator was built by Werner von

Siemens in Germany and Frank Sprague was improved the safety side and the speed of the

electric elevators. Frank Sprague was the person who develops the idea about multiple elevators

in a single shaft.

J.W Meaker introduced a method which elevators doors to open and close safely and he had a

U.S Patent right about that idea. In 1887, American Inventor Alexander Miles of Duluth,

5

Minnesota patented an elevator with automatic doors that would close off the elevator shaft. In

2000 a vacuum elevator was offered commercially in Argentina.

2.0 INTRODUCTION

TO THE PROBLEM.

6

2.1 Statement of the Problem

World is moving fast, with a rapid development of technology. Current circumstance, leads

towards creation of people with different levels of needs. Circumstances will be strengthened

which is able to overcome it, the rest will perish or be extremely difficult to survive. All with all

the achievements yet there are certain negative constituents where ACE elevators must excel

their performances at.

With the prevailing technological devices ACE will have to struggle more when it comes to

installations and commissioning of elevators in order to outperform the competition. The existing

skilled laborers are insufficient to take up any comprehensive project. Lack of marketing efforts

to discomfit the competitors and most importantly quality issues with regard to installation

process minimizes the market share it has for their products.

During the recent past years the rapid spread of ACE’s market share – (see appendix ***)

7

2.2 Research objective

The objectives of the research mainly can divide in to as general and specific. These general

objectives directly emphasize on core purpose of the research and the specific objectives are

always act as supportive objectives therefore identify the general and specific objectives are vital

in order to meet the success of the research. Furthermore when once the researchers achieve the

supportive objectives eventually researchers may able to accomplish the core objective.

Researchers have set all the objectives with the intention of given time framework and available

resources in order to ensure the achievability of the goals. (Refer appendix 2)

Primary objective

Topic - "Analysis on Gaining Competitive Advantage of ACE Elevators in B2B Market.”

• To identify the different competencies owned by Ace Elevators in achieving competitive

advantage.

The general objective clearly confer correct path to researchers, in order to achieve a successful

research outcome. It mainly comprises the basic core competencies of Ace elevators. The basics

of the study exposed as to how they should retain the consumers and further recommending ways

to ameliorate the installation process through continuous improvement.

Secondary objectives

• To identify the drastic competition faces by Ace Elevators

This objective demonstrates determine the comprehensive competition that Ace elevators is

exposed to and in identifying the ascendency of industrial competitors the researchers are

expecting to use stratified sampling method. Accomplishment of this goal is vital to researchers

due to highlight the relationship between competitive advantage and competition.

• To identify hidden technical and human capital issues faces by Ace Elevators.

Researchers have used several research techniques to gather relevant information, knowledge

and to get better experience in order to fulfill this objective. This comprises human capital

related issues and other technical barriers in gaining competitive advantage.

8

2.3 Purpose and scope of the study

Since 2009 Ace elevators has been achieving significant improvement through winning

significant contracts both local and foreign. Therefore the research study is basically dealt with

identifying the core and threshold competencies hold by Ace elevators. Foremost significances

of the study are engaged with following aspects.

To identify the satisfaction levels of the consumers.

Provided the questionnaires to industrial consumers (B2B) therefore, the study allows the

researches to make a clear judgment on the consumer satisfaction with regard to their

performances.

To identify the core and threshold competencies of Ace elevators

This assists to gather information and provide instances on credibility, professionalism, recourse

based competencies etc. of Ace elevators which assist them to achieve competitive advantage

over the aggressive competition.

To identify the areas of improvements

9

3.0 COMPANY

PROFILE

10

3.1 History of the companyEstablished in 2009 as a subsidiary company of Aitken Spence Company, now AE Lanka

(PVT) LTD is the local sole agents for KOYO lifts & escalators (China), DALDOSS micro

lift (Italy) & ACORN Stair lifts (UK). As the Professional designer, installer and provider of

mechanical service of Elevators, Escalators, Passenger conveyors and car parking system

they serve more than three overseas countries including Maldives, India and Singapore.

3.2 Management Hierarchy

11

Chairman- Mr. D.H.S Jayewardene

He is one of Sri Lanka's most winning businessmen and heads many successful enterprises in

very diverse fields. He is the Founder Director and current Chairman/ Managing Director of

Aitken Spence group of companies.

Deputy Chairman – Mr. J.M.S Brito

Together with multi-disciplined knowledge, he also brings with him a wealth of 35 years of

international experience working with a number of international organizations. Presently Mr.

Brito is the Deputy Chairman and Managing Director of Aitken Spence PLC.

Finance manager - R. E.V. Casie Chetty

He is the Company Secretary and finance manager of Aitken Spence PLC., and a Director of

Aitken Spence Group Ltd

Director (Subsidiary) – Mr. A.A.K.M Wijesundera

He is the first person to introduce GEN2 elevators to Sri Lanka and the driver of the success of

the company, who’s responsible for handling business development issues and sales of the

company,

12

3.3 Product Portfolio

This compromises of the following items:

1. Passenger elevators.

o A passenger elevator is designed to travel people between a floors of the building

2. Freight elevators

o Freight elevators are designed to move goods and heavy items rather than for

passengers.

3. Panoramic elevators

o Panoramic elevators are with transparent walls offering observations of the

surrounding area from the cabin elevator.

4. Escalators

o An Escalators is a conveyer transport equipment or a moving stair case which

moves passenger between different of the building.

Heavy duty escalators

Light duty escalators

5. Car Lifts

o Car elevators typically use to move cars into the parking garage and specially uses

with in a building with a limited capacity.

6. Chair Lifts

o Modern Chair lifts are with a wide range of features with adjustable seat height,

battery isolation switch etc.which is mainly designed to fit in to a stair case to

carry disable or old passengers. (Refer Appendix 03)

13

4.0 THEORITICAL PERSPECTIVE

14

4.1 Chapter Overview

This chapter typically deals with a comprehensive analysis about information and surveys which are based on different concepts of the title of the research study.

4.2 Competitive Advantages of ACE Elevators

The Concept of Competitive Advantage

The concept of competitive advantage has been a major element of each and every company’s

Business strategy. Statements regarding competitive advantage abound, but a direct definition is

not to be found. When studying the use of the term competitive advantage in the strategy

literature, the common theme is value creation. Competitive Advantage was established in early

1985 as the vital companion to the Competitive Strategy. While competitive strategy mainly

focused on the Industry, Competitive Advantage concentrated more on the firm. It is an

advantage that a firm has over its competitors, letting it to make greater sales and retains more

customers than its competitors. Competitive advantages allow a company an edge over its

competitors and a capability to generate greater value for the company and its stakeholders. The

more sustainable the competitive advantage, the more challenging it is for other firms to

neutralize the advantage. Competitive advantage includes communicating a greater value to the

target market than its competitors. This can be accomplished through many avenues including

providing a better-quality product or service, reducing prices and increasing marketing efforts.

Sustainable competitive advantage means maintaining a healthy position over the long term,

which can aid to increase a company's good will and reputation at the marketplace, its valuation

and its long term earning potential.

15

4.2.1 Major Competitors of ACE Elevators

After the end of the civil war in Sri Lanka, country’s economy is vastly growing and it invites both local and foreign businessmen to invest in businesses. Due to that fact, ACE Elevators has to face competition from both local and foreign competitors. Local competition basically divided into two categories.

Internal Competition External Competition

ACE Elevators internally compete with the OTIS Elevator Company. World's leading

manufacturer of vertical transportation systems is OTIS Elevators; they are mainly aiming

on elevators and escalators. Even though both companies produce the same variety of products,

they are running as two separate businesses managed by two different administrations. This is

done basically to increase the productivity of the company and to improve quality by originating

a competition within the firm. Both these companies are subsidiaries of Aitken Spence

Company.

In the External Competition, ACE Elevators has to face both local and foreign competition.

Though there are higher number of foreign competitors, company largely emphases on the fewer

number of local competitors who can mark massive impacts on the company’s success. Some of

their local competitors are listed as follow.

SANYO Elevators and Escalators (PVT) LTD - They are the exclusive distributors and

sole agents for Sanyo Yusoki brand elevators, escalators, home elevators and car parking

system in the Asian territory namely Maldives and Sri Lanka. The company has been set

up by experienced and qualified professionals who had rich and long experience from

world’s top elevator companies. However, main principle and manufacturing factory

being based in Taiwan they still struggle to beat the competition due to price skimming

strategy used by them.

16

KONE Partners Lanka Elevator Engineering Company - Expanding Its operations

into the Sri Lankan market and have entered into a distributorship with Lanka Elevator

Engineering (Pvt) Ld., which has about 30 years of experience in installing, preserving

elevators and escalators. But still they have not being able to grab a significant market

portion in Sri Lanka compared to ACE; nevertheless KONE will be an upcoming giant in

future.

None of these Firms manufacture Elevators inside Sri Lanka, what they are undertaking is, when

a particular customer place an order, firms send an order to their principal company in order to

import Elevators and their spare parts and then assemble and install them in Sri Lanka. ACE

Elevators has to compete with those foreign firms, so they are getting into agreements with

foreign manufactures who supplies products for a lesser price but with a higher quality. Their

foreign competitors are,

Mitsubishi elevators and escalators - A foremost name in elevators and escalators

since the 1930s whose the biggest competitor of ACE , Mitsubishi elevators has built-up

a status for creating breakthroughs that make getting around more comfortable, secured,

and yet inspiring. Mitsubishi elevators and escalators are explicated by the

slogan, “Quality in Motion”. It’s a concept that has developed out of an attention to point

that manifested in exceptional-quality products which provide a clear customer attraction

towards their products.

17

4.2.3 Gaining Competitive Advantage over Rivals

One way, ACE Elevators have gained their competitive advantage is their low prices. Customers

have a bad perception as lesser priced products are not up to the standards. But ACE Elevators

have proven that wrong by providing high quality products for a lesser price. Key reason for this

is that the company ACE Elevators were able to come to an agreement with a foreign

manufacture from China, KOYO Elevator Co, LTD who supplies quality assured raw materials

for an affordable price. Also due to the economies of scale, ACE Elevators were able give their

consumers quality products for a lesser price. Also in the year 2011, the company has reduced

their price by 10% to 20% in order to become competitive with their main foreign competitors,

Mitsubishi and Sigma.

Higher degree of ‘Customer Focus’ is another factor which has facilitated the company to gain

competitive advantage. Through the questioner provided to ACE Elevators consumers, it was

proven that virtually all the consumers have rated company’s customer focus as ‘Excellent’. This

is generally because of the information they provide and every consumer can access to their

information. ACE Elevators are sustaining a budgetary price list which is available for Sri

Lankan and Maldives Market. Also they have the ability to present a firm quotation on request.

Superior after sales services and regular communication with the consumers has aided the

company to gain competitive advantage. Elevators must be regularly tested in order to assure its

safety and it is a key aspect which customers look into before they purchase. ACE Elevators

offer an efficient service supported by totally qualified lift engineers. They respond quickly to

call outs and repairs and their capability to manufacture ‘in-house’ combined with technical

expertise means that their clients see them as easy to do business with. The company has highly

skilled resident engineers. All of these features add up to one huge benefit for their clients. They

get a cost effective, one-stop lift engineering company able to meet all requirements with speed

and efficiency.

18

ACE Elevators has recognized that conducting standardized after sales services can gain them

an advantage over their rivals. As after sales services they are mainly providing,

Regular Cleaning.

Precautions to be taken before start up.

Ensure no pending works.

Ensure all rescue tools are in place.

Energizing practice.

Test the alarms and Interphones.

Indication and door operation.

Providing service technicians and call back technicians.

They have assured the safety of their products to their customers and in their Mission Statement

they have stated, that their main aim is to achieve 100% lift safety and 100% lift reliability to

reduce inconvenience and costs to their customers, caused by lift breakdowns. Their mission is to

accomplish this by great quality preventative lift maintenance tailored to each individual lifts’

needs, joint with unique, innovative solutions formed through constant in-house research. In

short, their aim is to provide excellence through innovation.

19

4.3 SWOT Analysis

Strengths

ACE Elevators uses latest technology in their manufacturing process that excels the quality of

their products and the company has stable clients that ensure specific amount of revenue can

generate per year. ACE Elevators is a large scale business organization which also runs in

Maldives, gaining advantage of cost leadership pricing.

Weaknesses

ACE Elevators are facing internal competition (OTIS Elevators Company) that has risk of

employees might go outer of the company goals, vision & mission which causes conflicts.

Employee safeness is not fully met by the company because of poor safety strategies and

unreliable safety kits.

Opportunities

Due to globalization ACE Elevators are getting opportunities to connect with quality material

suppliers & new customers around the globe which help them to enhance revenue & reputation.

Under Mahinda Chinthana government program there are many infrastructure development

projects available to launch, which can increases demand for ACE Elevators various types of

products (lifts, escalators etc).

Threats

ACE Elevators are facing threat from external competitors in the industry (Mitsubishi, Hitachi

etc), that diminishes orders from clients. Exchange rate changes & inflation rate fluctuations has

high possibility of increasing the entire process cost, which affects profitability of the company.

Also there is high chance of migrating skilled labors at present, which can restrict the company

to find most appropriate candidates. (Refer Appendix 04)

20

4.4 Value Chain Analysis of ACE Elevators

Inbound Logistic

ACE Elevators do not make their products their own, they used a third party. They import all

parts from china well recognized company called “KOYO Elevators” and they assemble in that

part in Sri Lanka. But all the parts they imports maintain quality standers that was created by

ACE Elevators. They used J.I.T approach to handling imports.

Operations

This is the step where imported parts are assembled. Individual process could include organizing

the parts to make elevators and checked the safety side of the each equipment. ACE Elevators

are famous for their reliability which comes from efficient operation.

Outbound Logistics

Output of the production process at the plant, ACE Elevators Company directly supplies their

products to customers. They manage their own showrooms in different countries.

Marketing and Sales

ACE Elevators imports their high quality parts from china (KOYO Elevators), because of that

comparing to other competitors in this industry price is low. As well as they have good adoption

to global culture and customs.

21

Service

Provide service to enhance or maintain the value of the products. This includes all the areas of

service. In ACE Elevators they provide good after sales service, final safety checking,

complaints handling, and training. As well as ACE Elevators value their customers.

Firm Infrastructure

ACE Elevators have high brand recognition among their industrial customers. In Sri Lanka they

work as a sub company of well known company called “Aitken Spence Groups”, to assemble

their products they used fully computerized systems with human as operator.

Human Resource Management

Employees are very important and an expensive resource to ACE Elevators. They consider their

employees as “Human Capital”. They used recruitment, selection, training and development,

compensation to retain employees.

Technology Development

They mainly focus giving more user friendly products to their customers and always try to

protect elderly people who are using their products. Uses emergency response technology where

it gives a signal whenever there is an error or when lift gets stuck.

Procurement

They used distribution agreement, parts purchasing agreements and agreement between their

customers for their procurements.

22

4.5 Porter’s Diamond Analysis to ACE (Refer Appendix 05)

Factor Conditions

ACE Elevators has highly skilled workforce who are extremely focused and diligent, which is

the biggest strength of ACE. They consider their employees as “Human Capital”. Although lack

of training and development for their employees, restrict them from gaining new technological

advancements in to practice. Further ACE Elevators have good capital resources and

infrastructure. But they do not make their products their own, they used a third party. They

import all parts from china well recognized company called “KOYO Elevators”.

Demand Conditions

The company is involved in the manufacture, supply, export and service of all kinds of lifts

catering to a number of places like hotels, hospitals, office, banks and etc.

Ace Elevators is Business to Business organization (B to B). They understand their customers'

needs, preferences and offer products/product features that suits to their organizational

requirements, built for all industrial purposes and available with a range of choices and

specifications. One of the most important of our strengths is the strategy of competitive pricing

that they follow. Then customer bargaining power is low. Because there price is low and

maintaining good quality.

Related and Supporting industries

Government can influence the supply conditions of key production factors, demand conditions in

the home market, and competition between firms. Government interventions can occur at local,

regional, national or supranational level. The Ace elevators import all parts from china. It means

produce there inputs which are important. Then industries provide cost-effective inputs, then the

government charge import tax.

23

Firm Strategy, Structure and rivalry

Ace Elevators, established in the year 2010 it’s one of the most respected a prominent

manufacturers of all kinds of lifts. It involves in the manufacture, supply, export and service of

all kinds of lifts to the B to B market. An ace Elevator is a world famous company, but they

have many competitors. The largest competitor is Mitsubishi elevators. The second largest is

Sigma Elevators. Then People can choose varieties of products. But it is not big affect to the Ace

elevators, because one of the most important strengths is the strategy of competitive pricing that

they follow. And also provide after sale support to their customers for training on operation of

the equipment including repairs, if needed. (Refer Appendix 6)

24

5.0 RESEARCH METHODOLOGY.

25

5.1 Chapter Overview

This chapter basically explains the methodology used to identify How Ace elevators has renewed customer confidence and made remarkable progress. It also describes how the sampling was done, and the data collection methods (primary and secondary) implemented and also emphasizes on the assumptions and the limitations which involved in gathering, and analyzing the data accordingly throughout the research.

5.2 Research designThe main objective of this research is to identify how Ace elevators has renewed customer confidence and made remarkable progress. While addressing this objective we came across the issues which the company faces. Therefore finding out new ways/ strategies to overcome the issues, while continuously improving ACE elevator-products, were also considered throughout the research.

5.3 Sources of data collection

The data gathering process and sampling plays a major role in order to define the problem and coma up with recommendations. The sources of data collection can either be direct or indirect but should be accurate

Primary sources o Questionnaires

o Interviews

The sources from which the first hand data can be gathered are primary sources. Data which are gathered from these sources are not manipulated or processed therefore the reliability is very high.

During the research we have used several methods to gather primary data. These methods are more reliable, quick and accurate. Basically, to gather customers’ information we used a questionnaire and to assess the engagement of human capital in achieving the competitive advantage a separate questionnaire was prepared for employees.

26

Other than that to have an overall knowledge of the company and its operations we had interviews with the respective people in the particular company. We conducted an interview with the general manager of Ace elevators to gain a better knowledge about the company background, its competitors and the issues which the company is facing.The product details and all information regarding sales, technical issues, competitive products etc. were gathered by the interview conducted with the product manager.

Secondary sourceso Company web siteo Company Annual report

o Customer complaint reports

o Tender Documents

The sources which the previously gathered data can be extracted are secondary sources. These data are prerecorded and noted before by someone (not by the user) and are available in a more detailed manner.

Some secondary sources are also used in order to prepare the report with more detailed. The internal secondary sources such as the customer complaint records and feedback reports and previous researches done by the company itself and the external secondary sources such as the official company website, and few other websites

5.4 Sampling Plan

Sampling plan is the method which uses to analyze the total population by analyzing a small group which is selected from the population.

Sampling Method - The population which considered for this research was all the building construction companies (B2B) who use ACE elevators for their projects. Since the number of such users is comparatively limited, it was possible to consider the majority of the population with less constraint. The sampling method used for this research is random sampling method. This method gives an equal chance of being selected for the sample. Therefore the consumers were randomly selected.

Sample size – The number of consumers which was selected for the sample is the sample size for this research. According to the sampling method we could select industrial consumers (construction companies) who are smaller in numbers. However, the researchers have been able to distribute 30 questionnaires, out of which 27 has been returned by the company.

27

5.5 AssumptionsBasically in any research the researchers are making certain assumptions. One of the important assumptions the reseachers made was that selected sample is representing the population.

Further, one of the basic assumptions the researchers had to made is that the information provided by the customers and the competitors are true and up-to-date.

5.6 Research schedule

Particulars Number of days

Understanding the requirements of the research  05Selecting a suitable research topic and an organization 02Study the background of the company and find out how we could start doing the research  05Identified the consumers (construction companies) of the company.  03

Preparation of questions  03

Distribution and recollection of the questionnaires  05Visiting the organization and meeting the general manger. 04

Meeting with the product manager 03

Data analyses  10

Report preparation  10

Total number of days  50

28

6.0 DATA ANALYIS.

29

6.1 Chapter Overview

In this chapter, researchers describe and analysis the final results of the data, which were gathered through the relevant methodologies. The analysis of the final results is presented through tables and graphs.

6.1.1 Analysis of the customer feed back (Refer Appendix 11)

Product Quality

Table 01

Ratings Customers

0%-20% 0

21%-40% 041%-60% 0

61%-80% 1181%-100% 16

Total 27

Inference:

According to this graph we can clearly identify customers have good attitudes about product quality of ACE Elevators (Pvt) Ltd. We found out of 27, 16 customers said Ace Elevators product quality is excellent.

30

Figure 01

Communication

Table 02

Ratings Customers

0%-20% 0

21%-40% 041%-60% 01

61%-80% 1281%-100% 14

Total 27

Inference:-

According to this graph it indicates ACE Elevators maintain good communication process with

their customers as well from our research we found out of 27 customers, 16 customers are

satisfied with their communication process.

Figure 02

Customer Focus

31

0%-20% (Poor)

21%-40% (Fair)

41%-60% (Good)

61%-80% (V. Good)

81%-100% (Excellent)

0

4

8

12

16

0 0 0

11

16

Product Quality

Product Quality

Rating

Cust

omer

s

Table 03

Ratings Customers

0%-20% 0

21%-40% 041%-60% 09

61%-80% 1281%-100% 06

Total 27

Inference:

The graph shows that the customer centric approach taken by ACE is average. According to the

research we found all the 27 customers being approached by the researchers paid interest in

giving better ratings under this topic.

Figure 03

32

0%-20% (Poor)

21%-40% (Fair)

41%-60% (Good)

61%-80% (V. Good)

81%-100% (Excellent)

0

2

4

6

8

10

12

14

16

0 01

12

14

Communication

Communication

Rating

Cust

omer

s

Delivery

Table 04

Ratings Customers

0%-20% 0

21%-40% 041%-60% 13

61%-80% 1281%-100% 02

Total 27

Inference:

The following graph shows up the satisfaction level of customers on the “Delivery Process”.

According to this graph it illustrates more than 25 customers have not been satisfied with the

delivery process of ACE elevators.

Figure 04

33

0%-20% (Poor)

21%-40% (Fair)

41%-60% (Good)

61%-80% (V.Good)

81%-100% (Excellent)

0

2

4

6

8

10

12

14

0 0

9

12

6

Customer Centric

Customer Focus.

Rating

Cous

tom

ers

After Sales Service

Table 05

Ratings Customers

0%-20% 0

21%-40% 041%-60% 13

61%-80% 0981%-100% 18

Total 27

Inference:

This graph illustrates the customer satisfaction level with regard to ACE’s after sales services provided to their customers.

Figure 05

34

0%-20%. (Poor)

21%-40%. (Fair)

41%-60%. (Good)

61%-80%. (V. Good)

81%-100%. (Excellent)

0

2

4

6

8

10

12

14

0 0

1213

2

Delivery

Delivery

Rating

Cous

tom

ers

6.1.2

Market Share Analysis

Table 06

Year ACE Elevator’s

sales

Competitors sales

2009 10 247

2010 39 290

2011 47 345

2012 44 406

2013 57 476

Inferences:

The below graphs signifies the analysis of market share hold by the ACE Elevators for five

consecutive years from 2009 to 2013 Mid.

Figure 06

35

0%-20%. (Poor)

21%-40%. (Fair)

41%-60%. (Good)

61%-80%. (V.Good)

81%-100% (Excellent)

02468

101214161820

0 0 0

9

18

After Sales Service

After Salse Service

Rating

Cust

omer

s

Sri Lanka and Maldives Market Caption under Maintenance

Table 07

Inferences:

This particular graph shows the market share occupied by ACE in providing “maintenance services” in both the countries that they are serving compared to total market.

Figure 07

Main competitor offers Vs ACE offers

36

2009 2010 2011 2012 20130

50100150200250300350400450500

1039 47 44 57

247290

345406

476

Market Share

ACE Elevators Competitors

2009 2010 2011 2012

Total Market 968 1160 1235 1487

ACE Share 480 510 558 596

Inferences – This particular table shows the price comparison between ACE elevators and the main competitor “Mitsubishi”.

Table 08

Date Ref: No Site Specifications CIF PriceACE Mitsubishi Price

Diff (%)

26th

June 2013

Q/Ace/P/13/06/784-(D)-12

Hambantota Harbor

TKJ800- Model passenger elevator

US $20,788/per unit

US$ 29,820/per unit

56.5%

16th

October 2012

Ace/KW/PP/041/12

Colombo Dockyard Ltd.

Micro Freight Elevator

US$ 4,178/per unit

US$ 6,798/per Unit

62.7%

4th

October 2011

Q/Ace/P/11/10/503

Hotel Devon -Kandy

TWJ 1000 Model Passenger elevator

US$ 26,900/per unit

US$ 32,390/Per Unit

20.5%

1st

February 2012

Q/Ace/P/12/02/563

Softlogic Holding Plc

TWJ 1000 Passenger elevator

US$ 22,350/per unit

US$ 27,820/per Unit

24.4%

25th

July 2012

Q/Ace/P/12/07/497-(B)

Blue Water Hotel TWJ800 Model Passenger elevator

US$ 20,980/ per unit

US$ 28640/Per Unit

36.5%

(Refer Appendix 06)

37

2009 2010 2011 20120

200

400

600

800

1000

1200

1400

1600

Sri Lanka and Maldives Market Caption under Maintenance

Total Market

ACE Share

Years

Sale

s

Price comparison6 – Information were abstracted from ACE elevators’ quotations and documents provided for certain Business entities offering prices.

Assessment of Human Capital possess by ACE Elevators

ACE elevators submit that it’s problematic that individual resource is often used as the unit of

analysis to investigate competitive advantage. In assessing the internal capacity of ACE the

researchers have conducted an employee assessment process as well. The results of the same is

as follows:

Table 09

Ratings Category 01

Category 02

Category 03

Category 04

Category 05

Strongly Agree 08 05 08 05 09

Tend to Agree 04 06 04 05 03Neither Agree nor Disagree 00 01 00 02 00

Tend to Disagree 00 00 00 00 00

Strongly Disagree 0 00 00 00 00

Total 12 12 12 12 12

38

Category 01 - Proud when I tell others I am part of this organization

Category 02 - Would recommend ACE elevators as a better working place.

Category 03 - Think that providing incentives would increase employee performances

Category 04 - ACE provides room for creative excellences in employees

Category 05 - ACE has superior technology to outperform the competition

Inferences:

This particular graph shows the operational or floor level employees’ attitudes towards the

company and its operations in relation to other brand competitors.

Figure 09

(Refer Appendix 07 )

See Appendix 07 to find the attached employee questionnaires and feedback given by the employees.

39

40

Strongly Agree Tend to Agree Neither Agree nor Disagree

Tend to Disagree0

1

2

3

4

5

6

7

8

98

4

0 0 0

5

6

1

0 0

8

4

0 0 0

5 5

2

0 0

9

3

0 0 0

Category 01 Category 02Category 03Category 04Category 05

7.0 FINDINGS.

41

The study reported that stakeholder management helps to sustain competitive advantage through

advancing a firm’s resource capacity, commitment, developing capabilities, and building

relationships. Stakeholder management has also impacted ACE Elevators by generating several

isolating mechanisms that preserve competitive advantage, including time compression

diseconomies, casual ambiguity, social complexity, and transaction cost.

As per the gathered information the relevant findings are s follows:

Table 01

According to the gathered information out of 27 businesses there are more than 15 industrial

customers who are highly satisfied with the Product quality which represent 59% of the total.

The rest of the feedback was between 61%-80%. It implies that the high quality of equipments

gain competitive advantage. (Installation and commising)

Table 02

According to the analysis customer satisfaction towards the communication process of ACE

elevators are at a higher level where out of 27 customers (B2B) 51% have ranked as “Excellent”.

Higher number of approaches to customer requirements, higher number of visits paid to sites and

effective problem solving techniques that have been used by ACE elevators brings in

competitive advantage over competitors. (Refer Appendix 08)

Table 03

The word “Customer Centric” denotes ACE elevators ability to orient the products to fulfill the

customer requirements.

This graph clearly indicates that the “customer Centric” of ACE elevators is in the moderate

level. According to the research, the researchers have found more than 77% of customer

perception towards the particular process is in between 41%-80%, despite of that 22% of

customers rated “Excellent” with regard to “Customer Centric”.

42

Table 04

According to this graph it illustrates that ACE Elevators has been underperforming in the

delivering process, because more than 92% of customers’ satisfaction with their delivering

process is moderate. KOYO the manufacturers of elevators and escalators who are based in

China needs more time to proceed with the manufacturing and the long distance between two

plants results in long delay in shipment. In order to mitigate the risk ACE takes a less time period

for installation and commissioning process. (Refer Appendix 09)

Table 05

According to this graph it illustrates ACE Elevators have been performing well in delivering

after sales services to their customers where more than 70% customers have paid interest to place

“Excellent” in the given questionnaire with regard to after sales services. Within the given

warranty period, the services provided for customers will be at no cost. Further on call services

will also be provided by the maintenance engineers, which assist to excel their performances

over the competitors. (Refer Appendix 10)

Table 06

According to the bar chart, can identify in the year 2009 ACE Elevators had 4% market share in

the industry which is very low. That has increased in the year 2010 by 8%. It is a reasonable

improvement in ACE Elevators. That might be due to their rapid customer after sales service,

usage of latest technology and opportunities such as increase in globalization, expansion of

businesses, newer life styles. That figure has continuous to the year 2011 as well. There is a 2%

decrease in the year 2012 sales units but that has increased to 11% in the mid of year 2013.

43

Table 07

In total the revenue gain from Maintenance only in both Sri Lanka and Maldives of ACE

elevators seems to be relatively high than competitors. In 2012 grabbing more than 40% of the

entire market ACE elevators has shown their high potential of their services. From 2009 to 2012

ACE has been able to keep up the market share at a stable rate with slight improvements which

testify the competitive ability possess by ACE.

Table 08

Competitive pricing strategy of ACE elevators is one of the most supportive factors in gaining

competitive advantage over the competitors. This particular table depicts the main comparison of

prices between ACE and the most powerful brand competitor (Mitsubishi). Over the 4

consecutive years ACE has been able to maintain a significant gap with the competitors’ prices

where in 2012 the price difference has grown up to 36% which is exceptional. The price

advantage gain by ACE elevators is in fact visible in the table which again reflects the low cost

of production, installation and commissioning enjoyed by ACE elevators.

Table 09

Through the gathered information using the questionnaire the researchers have been able to

conclude that current customers are extremely contented with ACE elevators except for few. The

given questionnaire deals the employee feelings which helps to assess the possibility of the

continuation of the prevailing competitive advantage into future. However, most importantly

67% of the employees strongly agree that providing performance related incentives would

enhance the capacity of them to work, place which is positive points captured by the researchers

in order to develop strategies to improve competitive advantage. And more than 60% of

employees would recommend ACE elevators as a better working which would attract high

caliber applicants.

44

8.0 RECOMONDATION.

45

Making Social contacts with the Competitors.

As an adopter of penetration pricing ACE elevators would not be able to exist in the business for

a long period if the competitors also to apply the process of price reductions, it would cause a

“price war” in the market. Rather than that ACE elevators can come to an agreement with other

potential competitors to maintain a selective price range with in the market creating the entire

market an Oligopoly.

Developing strategic marketing tools to increase ACE products sales.

Increasing the availability of sales binders (Standard equipment binders) for KOYO products,

increasing the availability of adjustment manuals for GEN2 and for all elevator models,

increasing the availability of technical auditors to support in order to secure projects in Sri Lanka

and Maldives and availability of modernization packages for standard product ranges would

increase their competitive advantage.

Conducting trade shows.

ACE elevators can carry out trade shows in emerging locations with the assistance of the foreign

partner KOYO and grab more industrial clients into business. Therefore ACE needs to be more

precise in differentiating their products, processes from the rest in the industry in order to gain

more competitive advantage.

Employee training and development.

Most of the employees at ACE Elevators have stated in the questioner that they need more

training in order to enhance their abilities. Rather than getting specialists from China to consult

the activities, it will be more supportive to the company if they can conduct an employee

performance evaluation and find out the employees who need proper training and send them to

China for training sessions to master their skills.

46

Establishment of knowledge sharing system among the employees.

Establishment of a regular model of inter-firm interactions, that permits the transfer,

recombination, or establishment of a specialized knowledge. The researchers argue that

developing greater inter-firm knowledge-sharing customs through alliance partners will be the

most significant source of new ideas and information that result in performance boosting

technology and innovations.

o This particular process can be facilitated by ensuring the optimistic side of

employee-specific absorptive capacity and evading its negative aspect such as

using incentives to promote transparency and discourage free riding.

Establishment of an automated oxygen discharging system inside elevator cabins.

If lift lock in between two floors people can’t stay for a long time inside the lift because there are

limited air to breath, to overcome that problem we can recommend, that the company can fix

oxygen tanks and make a system where after the lift locked oxygen tanks automatically turn on

and give fresh air to people.

Establishment of a automated signal generator

Whenever there had been a technical error within the elevator panel or escalator in a particular

site/ Building ACE elevators can infix a system which indicates instant signaling to the service

provider instead of a manual process, where the client call the company and accuse the company.

This automated process will be a efficient way of customer complaint handling and would

strengthen the customer supplier relationship.

Establishment of branches in various other locations.

Due to the higher number of sites, buildings and various other upcoming projects being

implemented due to “Mahinda Chinthana Concept”, it would be much more beneficial for ACE

47

to establish agents or technical assistants in various other locations including Hambantota,

Jaffna, Galle etc… in order to improve the efficiency of the delivery service and technical

assistance.

Establishment of a new bell ringing system, to ensure safety.

ACE Elevators has few issues with regard to security of elevator cabins in operation. They do

not use proper safety tool kits for installation. We can recommend a special bell ringing system

in the first try out, if the lifts and elevators have certain problems. That ensures the safeness.

48

9.0 LIMITATION.

49

When taking customer feedback using questionnaires it is difficult to agree with 100%

accuracy of information. Because based on the situation they just fill the questionnaire

without proper attention. Some customers may misunderstand questions and provide

inaccurate answers.

Companies do not provide all their information to external parties because they have

confidential systems, processes which help to increase competitive advantage. Therefore

the reliability of information is less.

Since the company is competing with an internal competitor, OTIS Elevators and the two

businesses are run by two separate administrations, ACE Elevators management were

unwilling to give some information because we also had an appointment to meet the

Operation Manager of OTIS Elevators to get some information about their business in

order to compare and contrast between the two companies.

Out of 30 questioners provided to the industrial consumers there were only 27 replies

since some of ACE Elevators industrial consumers were reluctant to give their feedback

and in the labor questioner also there were few employees who did not provide their

feedback and we had to analyze and research about the company only through the

received questioners.

We were unable to meet the Finance Manager of ACE Elevators because the day we

visited the company there was an internal audit and the finance manager was reluctant to

provide information due to busy schedules.

50

10.0 CONCLUSION

51

Research examined how ACE Elevators has renewed customer confidence and made remarkable

progress throughout the life span of their business. This research challenged and examined the

context in which people and technology is valued within the scope of their business. Under

theoretical perspective, competitive advantage, SWOT, value chain and Porters Five Force have

been analyzed in order find out the factors which are affecting ACE Elevators both intrinsically

and extrinsically. Questioner provided to the industrial consumers showed that they are highly

satisfied with ACE high quality products and it indicates that ACE Elevators has stable client

base. Product quality, communication, customer focus and after sales services done by the ACE

Elevators has been rated highly by its industrial consumers although they are having certain

issues regarding their delivery and 92% of their consumers are not satisfied with their delivering

process and their delivery is an area of improvement for ACE Elevators. In order to renew

consumer confidence and to make remarkable progress, ACE Elevators has used their core

competencies and was successful in facing the competition. Through their low prices mainly due

to economies of scale, and being consumer focus and by providing superior after sales services

the company has been able to outperform the competition successfully.

Research shows the drastic competition faces by ACE Elevators, their internal and external

competitors and hidden technical and human capital issues faced by the company. There are

certain thresholds and core competencies that ACE Elevators could have used to gain and to

excel their competitive advantage for another step forward. Currently the company does not

initiate any marketing and advertising campaigns to make awareness within the existing market

which could have help them to gain more market share and through employee questioner, it has

been emphasized by most employees that there is requirement for more training and

development in order to improve their efficiency and effectiveness.

By analyzing the company background, operations and current market trend we can come up

with several recommendations which will smooth the future growth potential of ACE Elevators.

52

11.0 ANNEXURES .

53

11.1 Bibliography Aitken Spence. (2010). [online]. Last accessed 05th August 2013 at

http://www.aitkenspence.com/about_us/hotels_logistics_power_sri_lanka.asp

Competitive advantage. (2013). [online]. Last accessed 20th August 2013 at

http://en.wikipedia.org/wiki/Competitive_advantage

Competitive advantage researches. (2010). [online]. Last accessed 22nd August 2013 at

http://www.competitiveadvantageresearch.com/

Company Profile. (2010). [online]. Last accessed 01 September 2013 at

http://www.aitkenspence.com/about_us/hotels_logistics_power_sri_lanka.asp

History of elevators. (2007). [online]. Last accessed 10th August 2013 at

http://www.ideafinder.com/history/inventions/elevator.htm

History of elevators. (2013). [online]. Last accessed 11th August 2013 at

http://www.columbiaelevator.com/main/elevator-history/

Mitsubishi elevators. (2013). [online]. Last accessed 13th August 2013 at

http://www.mitsubishielectric.com/elevator/

Otis elevators. (2013). [online]. Last accessed 10th September 2013 at

http://www.otisworldwide.com/

11.2 Questionnaires

54

This Questionnaire is being produced in order to collect information about the employee attitudes and satisfaction towards the company policies and operations.

1.

Strongly Agree

Tend to Agree

Neither agree nor disagree

Tend to disagree

Strongly disagree

Proud when I tell others I am part of this organizationWould recommend ACE elevators as a better working place. Think that providing incentives would increase employee performances ACE provides room for creative excellences in employeesACE has superior technology to outperform the competition

2. Do you think bringing in engineers from China for local installation of elevators would enhance the productivity and effectiveness of work? YES

NO

IF, 0%- 20% 21%-40% 41%-60% 61%-80% 81%-100%

3. Do you prefer if ACE establish branches out of Colombo? YES

NO

4. Where would you work if it wasn’t for ACE and why?

5. I wish if ACE had …

55

Appendix 01

Market Share of ACE Elevators

4%

96%

2009

ACE Elevators Compititors

12%

88%

2010

ACE Elevators Competitor

12%

88%

2011

ACE Elevators Competitiors

10%

90%

2012

ACE Elevators Competitors

56

11%

89%

2013

ACE Elevators Competitors

Appendix 02

57

Research Objectives

General objectives

To identify the different competencies owned by Ace

Elevators in achieving competitive advantage.

Specific objective

To identify the drastic competition

faces by Ace Elevators

To identify hidden technical and human capital issues faces by Ace Elevators.

Appendix 03

Panoramic Elevators

Panoramic Elevator is a special design of passenger

elevators. Panoramic elevators are elevators with any

kind of transparent walls offering views of the

surrounding area from inside the cabins. Views from

panoramic elevators can be inside or outside the

building, or both.

Passenger Elevator

A passenger elevator is designed to move

people between a building's floors. Passenger

elevators capacity is related to the available floor

space. Generally passenger elevators are available

in capacities from 450 kg to 2,700 kg. Generally

passenger elevators in buildings eight floors or less

is hydraulic or electric, which can reach speeds up

to 200 feet per minute (1.0 m/s) hydraulic and up to

500 feet per minute (150 m/min) electric. In

buildings up to ten floors, electric and gearless

elevators are likely to have speeds up to 500 feet per

minute (2.5 m/s), and above ten floors speeds begin

58

at 500 feet per minute (2.5 m/s) up to 2,000 feet per

minute (10 m/s).

Freight Elevator

A Freight elevator is an elevator designed to carry

goods, rather than passengers. Freight elevators are

generally required to display a written notice in the

car that the use by passengers is prohibited, though

certain freight elevators allow dual use through the

use of an inconspicuous riser. In order for an

elevator to be legal to carry passengers in some

jurisdictions it must have a solid inner door. Freight

elevators are typically larger and capable of

carrying heavier loads than a passenger elevator,

generally from 2,300 to 4,500 kg. Freight elevators

may have manually operated doors, and often have

rugged interior finishes to prevent damage while

loading and unloading. Although hydraulic freight

elevators exist, electric elevators are more energy

efficient for the work of freight lifting.

…………………….

59

Car Lift

Vehicular elevators are used within

buildings or areas with limited space (in lieu of

ramps), typically to move cars into the parking

garage or manufacturer's storage. Geared

hydraulic chains (not unlike bicycle chains)

generate lift for the platform and there are no

counterweights. To accommodate building

designs and improve accessibility, the platform

may rotate so that the driver only has to drive

forward. Most vehicle elevators have a weight

capacity of 2 tons.

Escalator

An escalator is a moving staircase, a

conveyor transport device for carrying people

between floors of a building. The device consists of

a motor-driven chain of individual, linked steps that

move up or down on tracks, allowing the step treads

to remain horizontal.

Escalators are used around the world to

move pedestrian traffic in places

where elevators would be impractical. Principal

areas of usage include department, shopping

malls, airports, transit, convention

centers, hotels, arenas, stadiums and public

buildings.

60

Chair Lift

Vehicular elevators are used within buildings or areas

with limited space (in lieu of ramps), typically to

move cars into the parking garage or manufacturer's

storage. Geared hydraulic chains (not unlike bicycle

chains) generate lift for the platform and there are no

counterweights. To accommodate building designs and

improve accessibility, the platform may rotate so that

the driver only has to drive forward. Most vehicle

elevators have a weight capacity of 2 tons.

61

Appendix 04

62

Strengths

1. Latest technology.

2. Stable customer pool.

3. Economies of scale

4. Cost leadership pricing.

5. Rapid customer after sales service.

6. Higher rate of training & development programs.

7. Unique products.

8. Fully qualified lift engineers.

9. Employees are focused & diligent.

Weaknesses

1. Internal competition.

2. Weak management.

3. Poor safety strategies and unreliable safety kits.

4. Lack of product availability.

+Opportunities

1. Increasing globalization.E.g.:- Maldives operations

2. Upcoming projects in Sri Lanka.

3. Expansions of businesses.

4. Newer life styles.

5. Rapid growth in tourism industry.

6. Increasing demand for apartments.

Threats

1. External competition.E.g.:- Mitsubishi,Xuize,Hitachi

2. Inflation rate fluctuations.E.g.:-fluctuation in prices of elevator materials.

3. Exchange rate fluctuations.

4. Skilled labor migration.

5. Increase in taxation.

6. Pertaining government rules & regulations.

Firm Strategy, Structure and

rivalry

Demand Conditions

Factor

Conditions

Related And Supporting Industries

Appendix 05

63

Appendix 06

Duty Free importation/ Taxation/ Progress Building Procedure- Notwithstanding the duty-

free importation status, AE Lanka. Shall bear all import taxes and/ or duties including all related

costs and expenses incurred if AE Lanka fails to comply with the duty free importation

procedures imposed by the Sri Lanka Authorities. Any loss time due to failure to comply with

the duty free importation procedure will be the sole responsibility of AE Lanka.

(Abstractions (page9) Sub contract agreement for supply Installation, Testing, Commissioning

and maintenance of 5 no. KOYO elevators for the proposed construction of business centre for

ICC development holding (pvt.) Ltd. At 30, R.A De Mel Mawatha, Colombo 03)

64

Questionnaires

Appendix 08

Blue wtr

65

Appendix 09

DELIVERY &INSTALLATION PROGRAMME FOR HARBOR PUBLIC SERVICE BUILDING ELEVATOR

Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16/C OpeningProduction PeriodShipping PeriodClearing & DeliveryInstallation Testing & Commissioning

66

67

68

69