KONE: The MonoSpace Launch in Germany Harvard Case Solution & Analysis

 KONE: The MonoSpace Launch in Germany Case Solution 

Introduction

KONE is an electrical manufacturing company, which was founded in 1910 and it is considered as a largest elevator company in the world. Initially, it focused on the repair and sale of electrical motors, after that it expanded its business activities in the manufacturing and sale of steel, equipment's, cranes, wood handling systems and clinical chemical analyser. In 1995, the company had foreseen an opportunity in the elevator segment of the electrical equipment's. KONE’s elevator business is structured on two divisions: new equipment and service as well as the service division generated huge amount of revenue.

It is expected that KONE’s company manufactures and sells different type of equipment's such as escalators, wide range of elevators and elevator components. In earlier days the elevator business was expected to be comprise on three products, such as gearless traction, geared traction and hydraulic. With the advancement of technology and information, the company was indulged in the manufacturing of machine-room-less elevator.

Furthermore, KONE’s R&D team tremendously introduced EcoDisc machine which is considered as commercially viable and afterwards the management of the company introduced Mono Space elevators in the market. Furthermore, KONEhad initially targeted Mono Space directly at Europe’s new equipment market segment, as well as low-rise residential elevators.

It is expected that within a short period of time Mono Space became famous all around the world and the demand of the product increased significantly.Therefore, the management of the company is primarily concerned regarding the launch of the MonoSpace in Germany.

MARKET OPPORTUNITY

The size of the German market is very high, which could be the key to success for KONE. Moreover, estimation of high demand for the product in the upcoming years is the great opportunity for the Mono Space launch in Germany. It is expected that the German elevator market is dominated by residential construction. The whole market of elevator is divided in three sections: Hydraulic, Geared and Gear less traction's. In Germany, hydraulic elevators were dominated over geared elevators and captured the 60% of market. The geared traction captured the 40% of elevators and among that 75% captured by highly expensive elevator technology. But after the rapid end of construction boom the price of the new elevators fell so this is quite challenging for all the new entrants.

 Competition and Market Share

There are lots of sharks which have made the ocean red,therefore it is expected that there is an intense competition in the German market as many players are operating in this market such as Otis, Schmit & Sohn, Schindler and many more with having different market share therefore, entering into the German market could be a serious challenge for the management of the company.

 Customer Analysis and Current Market Situation

With the experience of previous launches in the major regions, the results have revealed that the customers haveshown keen interest in the product and are ready to accept the product therefore;numerous customers are present in the German market, which welcome KONE due to its significant brand recognition and high quality...................

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