KONE: The MonoSpace Launch in Germany Nature of the Situation: KONE Aufzug is the Germanic branch of KONE from Finland. During November 1996 Raimo Hätälä‚ the New Elevator Business director‚ was planning to launch a new product in the low-rise building market. The elevator industry in Germany was highly competitive and mature. From 1995‚ when the construction boom ended abruptly‚ until 2000 they expected the demand to shrink by 15%. This provoked the prices to fell between 5% and 7% in 1994
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- Group 7 Germany Large market 15‚ 500 units in Germany vis-à-vis France 7K‚ Uk 3.3K‚ Netherlands 2.1K Access to entire demand Manufacturing facility at Germany and hence important to penetrate market. Aufzug’s financial performance is critical to KONE’s overall success. 60% of German low-rise residential elevator market was accounted by hydraulic elevators. Hence‚ Monospace has a significant opportunity in Germany. Also‚ the production costs of both were comparable
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1. Introduction Kone is currently facing a precarious financial situation in an industry that competes on price rather than differentiation. Should the situation persist‚ losses for 1996 will be imminent. With the launch of Kone MonoSpace in Germany‚ however‚ the company hopes to make profits as it expands its product line in this very critical market. Germany’s elevator market is the largest in continental Europe and with a market size of 15‚500 units in 1995‚ it is more than the market sizes of
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KONE: MONOSPACE LAUNCH IN GERMANY Factors contributed to the launch performance of KONE on the Netherlands‚ France and UK? When launched‚ sales of KONE’s Monospace was the highest in Netherlands‚ then France and in UK none was sold in the first 3 months. Monospace is an elevator invented by KONE using the latest technology that uses an “EcoDisc” that eliminates the use of a machine room and further incur significant energy cost savings for the building management. It is an upgraded version for
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Mβ K eta Kone: MonoSpace Launch Going Up or Down? Table of Contents K Mβ eta β. β. β. β. β. β. β. β. 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% K Mβ eta - 1995 KONE’s revenue: $2.2 B (38% from V1‚ 62% from V2 (78% maintenance
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B2B MARKETING CASE ANALYSIS ON KONE: THE MONOSPACE LAUNCH IN GERMANY Submitted By: Ajay Yadav (09PGDM065) Bhoopendra Singh (09PGDM078) Sampreeth Kumar (09PGDM105) Shivendu Kumar Singh (09PGDM110) In order to enhance its financial position in a saturated elevator market and intense global competition‚ KONE developed the Monospace elevator that uses revolutionary technologies. It has various benefits‚ such as being the most energy efficient‚ not requiring oil and therefore eliminating
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| KONE CASE HBS Purpose of the Report KONE Aufzug’s elevator business was suffering from region-wide construction slumps‚ increased price competition‚ and margin erosion within the elevator industry. Their operating income was falling significantly and they projected to report after –tax income of zero earnings in the next year. Raimo Hatala‚ director of KONE Aufzug’s elevator business‚ knew he had to introduce a new product to revolutionize the elevator industry and increase KONE’s downward
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CASE: (KONE: The MonoSpace Launch in Germany) Problem: KONE Aufzug is a new elevator business which is in the middle of planning the launch of their new product‚ “MonoSpace”‚ into Germany. KONE is challenged with the problem of how they should price and market the MonoSpace elevator without dismantling and destroying their existing product line. KONE knows that they can only market to low & mid-rise buildings of 12 floors or less due to its cabin requirements and operating speed; however
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KONE: Final Exam 1996 – KONE was about to launch Monospace BUT: region-wide construction slumps & low differentiation among competitive offerings = significant price competition & margin erosion in the industry. Now‚ CEO was looking for an opportunity to grow with Monospace. Pricing Positioning Cannibalisation of own products? The elevator industry (new equipment & services) Number & types of elevators depended on urbanisation‚ population density‚ government support for public housing
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global competition‚ KONE developed the Monospace elevator that uses revolutionary technologies and has the potential to create a blue ocean opportunity that will help sustain financial profits in the short-term and may lead to significant growth in sales and profits over the long-term. TARGET KONE was to launch the Monospace in the low-rise residential elevator market in Germany‚ which was its largest country market in Europe and vital to its overall success. If the Monospace launch is successful
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