Topics: Marketing, Elevator, Escalator Pages: 3 (706 words) Published: February 20, 2012
KONE’s profits decreased from 6.5% to 6% and profit after tax has come down to 0%. In order to enhance its financial position in a saturated elevator market with intense 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, the KONE’s financial position and market share in the German residential elevator market will improve. It will also help establish KONE as a leading technology innovator and provide an early mover advantage in regards to cost savings, energy saving, and comfortable elevator segment. The success also has the potential to cannibalize the existing KONE fleet of comparable elevators. If the Monospace product fails, the company will realize adverse effects in terms of the loss of capital invested (R&D, production, marketing), potential decline in employee morale, and the obligation to compensate Monospace customers if the product is discontinued (service/warranty). This negative branding could significantly diminish the KONE’s reputation as being an industry leader and of producer of reliable products. A fail would also impact the company’s future growth strategy. The pricing and product positioning strategies set for Monospace in Germany would have a significant impact on the long-term success prospects for KONE. VALUE PROPOSITION

The introduction of Monospace adds value to Kone in the form of product differentiation (technological) instead of competing purely on price alone. Monospace is an improved product which eliminates the requirement of machine room, consumes only half the energy of...
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