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HuiChan
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Elevators are a great business! If my memory serves me well – elevator “OEM”s essentially make most of their profit on the service and maintenance part of the business as evidenced by the increasing amount of outsourcing penetration in the industry, which is still far below automotive manufacturers, for example. However, as you point out, I do worry about the proliferation of 3rd party service providers particularly in countries with weak IP protection (China for example), and the margin pressure that results. I would imagine that in those cases the only protection would be regulation – in other words, legislation that requires OEMs to service the elevators due to safety requirements. Do you know if 1) this is a trend being observed in emerging markets and 2) how enforceable these regulations might be?
Love the choice of business. As a loyal deliveroo customer I think they have nailed the food-delivery market through a fantastic operations strategy – quite simply, food arrives so quickly that it is piping hot! As a customer I attributed this to the hyper-local model that they have adopted (as you point out) but had not realised that they are actually differentiated on supply chain. I do wonder how important geography is to their success – London is incredibly dense in terms of people/offices/restaurants – is there a limit to where they can operate profitably?