Kone: The Monospace

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?

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SWOT Analysis (MonoSpace):

SoluBon PossibiliBes: