Kone: The Monospace Launch in Germany Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem Statement

KONE a global leader in the elevator industry is facing a significant challenge regarding the launch of its new product in an attractive market. KONE has utilized technological benefit to develop a new product that will revolutionize the industry and is known as Monospace elevator. However, the industry is facing a declining trend due to the recent slump that the construction industry has faced. Besides that, the product differentiation is very low in the industry that makes it further difficult for the players to compete easily and engage them in significant price competition with low margins to achieve. However, with the launch of this new Monospace elevator being prepared by KONE, the elevator industry will change significantly and a significant impact is expected to be made on the product lines of the players competing in the industry.

The company has succeeded with the launch of this new product in three of the most significant markets in Europe and is now aiming to target Germany, the most significant markets in the region. The market is quite attractive and can offer significant benefits to the company that will allow the company to incur success with this new product. However, launching this new product in this new market is quite challenging. The management of the company needs to develop the strategies to launch the product easily and efficiently in this market. Therefore, instilling and designing strategies for this product and a detailed marketing plan are the major obstacles that need to be overcome by the top management of KONE.

Strategic analysis

This section will incorporate the different situational and functional issues that the company has been facing and in light of the issues defined above, it will present an analysis of the core reasons that have played a vital role in formulating the issues. This section will first of all highlight the category in which the issues are being occurring and the main product belongs to. Furthermore, the competition will be described highlighting the major competitors globally and the competitors that will be prominent in the market the company is aiming to enter.

Apart from that, the company’s analysis will be conducted leveraging various factors that are prominent to highlight. The customers and the center of influence will be demonstrated along with the collaborators and the context in which the company is operating. The context will be conducting the environmental analysis leveraging various factors that play a vital role in shaping the overall environmental structure for the company.

These factors will include the political, social, economic, technological, legal and environmental aspects. Moreover, this section will leverage different strategic models to highlight the major reasons associated with the issues and also to facilitate the analysis. This section will play a pivotal role in formulating the strategic alternatives for the company and will also guide in identifying the major factors to assess and evaluate those alternatives.

Category

The elevator category is quite saturated in terms of differentiation and the presence of some prominent names in the industry. However, the category is being readily adopted and advancements in technology are essential for the new products in the category to succeed.

This is the reason why the players in the category are investing heavily on gaining technological advantage leveraging various technological benefits. The category is highly dependent on technology and the cost associated with it. Apart from that, price is the major factor for differentiation and the high investment on technology does not allow players to follow premium pricing strategy. On the other hand, the prime customers are the business and the construction industry.

However, the European market has recently faced a drastic decline in the field of construction which has erupted the sales of elevators. The companies in the category are seeking new and sustainable methods to cope with these challenges and come up with new and innovative ideas to boost the sales. The entry barriers are high however, the exit barriers are also very high. Therefore, the players’ intend to stay competitive and invest heavily on gaining technological advantage.

Competition

In order to assess the competition, it is important to identify the major competitors globally. First of all, the US giant in the industry, Otis Elevator has shear hold in the European, US and Canada and is occupying the position of the market leaders in these markets. The company has strong presence in the industry and is one of the longest serving players in the industry with a market share of around 30%. Apart from that, the reasons for the company to succeed heavily in the industry are due to the strong presence in the market and leveraging technology efficiently.........................

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