We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Otis Trains Case Analysis

The whole doc is available only for registered users
  • Pages: 2
  • Word count: 473
  • Category: Risk Train

A limited time offer! Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

The Background of Otis, it was a landmark Toy Train Company in early 20th century. In 1950’s gained major popularity among children, 1960’s-1980’s was the company’s peak. In 1990’s customer preference changed to gaming consuls, so Otis Trains had to change their target market. In response changed their product. Otis faced some problems, for instance, they didn’t adapt to advancements in technology: as a result the business suffered. Radical change due to disruptive innovation and electronic gaming, which led to changing their product and target market. At first it was not successful and then they made their product much more detailed, creating a niche market and plus increasing labor costs. In addition, they were in situation where they only approached by one company JLPTC. They were offered a lower cost of manufacturing by 40 to 60 percent per unit. Moreover JLPTC would work closely with Otis designers. And because of increased labor costs this is the practical solution, I would suggest that the company does decide to go but needs to take certain precautions.

Of course there are risks, for example, costs would be risky in the customs, taxes, duties, hiring a third party, freight, damaged goods, logistics. Also the risk would be shared in quality control: appealing, packaging, durability, originality. Reliability and communication would be in risky in that situation, reliability: trust , design security, work ethic, contracts, long term relationship, as for communication: lack of transparency due to distance and new relationship.

In recommendation, for costs, I would recommend hiring 3PL to handle transportation of products from JPLTC to Otis. Quality, probably create a branch office in china to maintain standard. Reliability, through contracts and legal terms JPLTC must abide to Otis standards. Also in communication, will be creating an outpost branch office in china to maintain standards. Using porter’s five forces model of competition:

Ease of Entry: Can JLPTC be trusted with the design protection? Intellectual property rights? Buyer power: How many customers will this new business attract? What is the new price? Is there a close substitute of the train? Supplier power: # suppliers, scarcity of supply (is JLPTC the only supplier? Will JLPTC be flexible in changing suppliers? Threat of substitutes: Technology change (Are similar products cheaply priced? Do competitors have a higher quality at a lower price?) Industry of rivalry: Number of competitors, diversity, and product differentiation Nature/characteristics of the product(s) and the customer:

Products: Transformers, Elmo, and G.I. Joe.
Innovation: T.V. shows, Movies, Games (ex: Train simulator, innovative computer game)

In conclusion, Otis needs to thoroughly evaluate its position in the market. It needs to keep in mind its value proposition. It must consider their completion; gaming systems are more advanced then even before. Lastly, without full evaluation of the risks, the answer is no, despite how lucrative the offer is.

Related Topics

We can write a custom essay

According to Your Specific Requirements

Order an essay
Materials Daily
100,000+ Subjects
2000+ Topics
Free Plagiarism
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access

Your Answer Is Very Helpful For Us
Thank You A Lot!


Emma Taylor


Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59