Kone: the Monospace Launch in Germany

Topics: Elevator, Economics, Customer value proposition Pages: 3 (409 words) Published: September 29, 2010
- Group 7

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.

Success in Germany depends on the increase in the sales and service revenue from Monospace. 

Even if Monospace loses due to sales in the short run, their overall profit can increase with the accompanied service.

Successful launch will help eat out the share of the ‘other’ service providers as KONE alone knows the know-how of the disc technology lifts. Successful launch will help take in geographical expansion.

Otis and Schindler, the current market leaders could afford to run loses and continue to have higher market share. 

If KONE also cuts down cost to compete on price and in spite of that if its unable to penetrate the market, KONE might collapse as they already are making no net profit.

Germany being the biggest market in Europe and known for its manufacturing and technical expertise, a failure in the German market could dent the product’s technology related value propositions in other European countries.

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Process savings are valued differently in different market – high in France and UK, low in Netherland Energy suppliers, an influence group in buying decision values the energy savings by Monospace The construction companies, a prominent member in buying centre didn’t find any unique value proposition Limitations of the usage of the product – buildings with penthouses and outdoor installations identified The extra savings from Monospace not passed on to owner/developer Customers wary about the...
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