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Kone: The Monospace

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KONE: The MonoSpace

Group 1: Nimash Kirihe8ge Leif Nitschke Kiri Bendorff Anas Samiri

SituaBonal Analysis 1/2:  Elevator Industry (Global)

  •                 –  Dominated by five companies (OBs, Thyssen, Schindler, Mitsubishi Electronics and KONE)
  •                 –  Rising demand in elevators, due to an increasing urbanizaBon
  •                 –  However, the demand peaked and was expected to fall
  •                 –  Revenue structure is divided in two sectors (new equipment is accounBng for 9 bn USD and service is accounBng for 13 bn USD
  •                 –  Service Market→→There are low entry barriers and high margins, which make it a high compeBBve market place

SituaBonal Analysis 2/2:

 KONE

  •                 –  Established in 1910 →→ HQ’s in Helsinki (FIN) and Brussels (BEL)
  •                 –  OperaBng in both elevator and escalator industry
  •                 –  KONE is the 3rd largest elevator company worldwide (behind OBs and Schindler)
  •                 –  Three segments →→ low-rise (75%), mid-rise (15%) and high-rise (10%) of sales
  •                 –  Market share→→Europe (57%), North America (29%) and others (14%) →→Germany is the largest market for elevators in Europe dominated by residenBal construcBon  (low-rise elevators)
  •                 –  Equipment = 38% and Service 62% of revenues
  •                 –  R&D team launched a new product to the market (MonoSpace) with Ecodisk technology  →→The new product offers: efficiency in space, reducBon in costs and Bme for installaBon and finally reducing energy consumpBon and costs, and even befer safety

Problem definiBon:

Low differenBaBon among compeBBon leading to a price compeBBon and an erosion of margins and therefore to a financial downturn of KONE.

→→ German market potenBal

What strategy regarding the MonoSpace is needed to penetrate the German elevator market?

[pic 1]

SWOT Analysis (MonoSpace):

Strengths Weaknesses

  •                 -  Requires no oil
  •                 -  Lower energy costs
  •                 -  Be5er safety
  •                 -  Reduced installa9on 9me
  •                 -  Ride comfort
  •                 -  Energy-saving/energy-efficient
  •                 -  Machine room eliminated

- Failure to match demand and supply - Unan9cipated consumer worries in

connec9on with MonoSpace - No provision for ven9la9on - Lack of approval for the MonoSpace - Cannot be installed in Penthouse

Buildings - Not suited for outdoor use

OpportuniBes

  •                 -  74% of low-rise residenBal buildings  are not expected to fall
  •                 -  Extend capabiliBes of the EcoDisc and  MonoSpace product line
  •                 -  Long-term partnerships
  •                 -  Befer reputaBon

Threats - Elevator regulaBons - Lower priced compeBtors

SoluBon PossibiliBes:

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