Business Consulting - Kone Monospace Case Study

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Kone: MonoSpace Launch
Going Up or Down?

Table of Contents

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Background Illustrative Product Monospace vs. Competiton Marketing Plan Test Markets & the German Difference Implications of Success or Failure Competitive Reactions Kone Weakness Managed

Background
KONE - The world’s third largest elevator company, after Otis and Schindler Sales
13%

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- 1995 KONE’s revenue: $2.2 B (38% from V1, 62% from V2 (78% maintenance, 22% for modernization)
48%

38%

- Germany is the major Market for KONE - R&D: EcoDisc -> MonoSpace
V1 New Equipment sales V2 maintainance V2 Modernization

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Illustrative Product
Elevator Asset Class Applications … Machine Room
High-Rise

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Low … Mid … High Low-Rise

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Illustrative Product
MonoSpace Elevator

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EcoDisc
- Machine Room Absence

- Half Energy Consumption
- No Oil - Eliminated Fire Hazards - Reduced Installation

- Less Expensive

Configuration

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Monospace vs. Competition
Major Players: Schindler, Otis, Thyssen, Mitsubishi Electric

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All operate through Germany, 24-hour service network, new elevator sales, installation braches and manufacturing facilities in Germany and Broad Mid-Size Players: about 30, new equipment sales 100-300 annually, regional operation and outsourcing manufacturing Cowboys: 150, operated within a single city, no manufacturing, focusing in purchase, assembling and installation and local service.

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Test Markets & the German Difference
The Netherlands: 100 presentations, 12 articles per month (40 – 60 inquires) Result: 70% target within 10 months, 62% of low-rise market share France: 22,000 letter ( TV Promo), 20 Breakfast meetings, On-site visits Result: 300 Units sold (70% of annual residential sales) United Kingdom: 3 presentations, 220 accepted “ tech leader” Result: No units sold after 1 month

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Germany: Real Estate decline