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INTRODUCTION Significant restructuring and consolidation in the late 1970s and 1980s found the worldwide elevator industry dominated in the early 1990s by five companies:Otis of United States, Schindler of Switzerland; KONE of Finland; Mitsubishi Electric of Japan; and Thyssen of Germany. Although they competed globally, these companies generally remained strongest in their domestic markets. Numbers and types fo elevators sold varied dramatically across the globe, reflecting factors such as urbanization, population density and government supprot for public housing. Elevator industry business was traditionally split into two sectors: new equipment and service. This traditional separation of product and service had generated interesting competitive dynamics in the elevator industry. Competition for new elevator installation was fierce leading to new elevator equipment often being sold at or below cost by the large competitors. On the other hand, competition for elevator contracts was different. Equipment suppliers usually had an advantage in winning conracts to service their installed bases. Low entry barries due to the relative simple electro-mechanical technology, steady demand and high margins in the service market had