Professional Documents
Culture Documents
Kone Case Analysis
Kone Case Analysis
With launch of Monospace in UK , Netherlands & France , next launch preparation was for Germany The German Market Scenario was as follows :
Product : o The elevator market of 15500 units was to shrink by 15% from 1996 - 2000 o Residential construction dominated the market o Residential constructions with elevators installed were 74% and forecasted to remain flat till Year 2000 o Market split for Hydraulic elevators & Geared Traction elevators was 60-40 and out of 40 % Traction elevators , 67 % (or 27% of total) were expensive PU type.
2
Price :
o
There has been pressure on prices with the fall of 5 % in 1994 & 7% in 1995 o This has led to the focus on services than sales o Competition like Schindler has gone upto 11% to be market leader and otis had lost 13% by loss of market share to eliminate losses in new business. Players : o The production cost in Germany is estimated to be same as for o comparative players are divided into Majors , Mid sized and Cowboys and The market hydraulic elevator are elaborated as follows :
Majors 6 companies 24 hrs service networks, , sales & installation branches in Germany. Manufacturing at Germany & abroad Mid Sized 30 players approx Sale of new equipment 100 300 machines annually Cowboys 150 mainly within city No manufacturing setup , mainly dealing with purchase & assembly of component , installation & local service.
3
People / Customers :
o
Property developers Concerned with overall cost of developing & renovating of property and overall cost and factors affecting investment value (cost, quality ,time)
General contractors Less technical expertise , rely on architects. Numerous small contractors exist
Architects Generally do not select the elevator by make or model but specify desired features like cosmetic options
Process : o KONE selling process involved initiation by customer 96% of times o Being major player KONE had access to 100% demand. o Initiation by sending specifications & request for bid o Subsequent visit by sales person to meet the construction manager / architect o Review of architectural drawings , specifications / special requirements / details 5 of elevator etc in sketch or CAD.
Promotion / Launch Plan through sales visit o Promote with relevant material the features to Target customers (General Contractors & Architects) o Discuss with customer the ROI & energy savings ( energy cost being a third from hydraulic elevators) and other less maintenance features in totality o Take total orders (with elevator room) o Use services to promote new product and create install base o Price the product lower than Gear Traction elevators to 6
Thank You