Kone: the Monospace Launch in Germany

KONE: The MonoSpace Launch in Germany

Abstract: KONE is an elevator manufacturing company with an innovative product, MonoSpace, entering the low-rise elevator market in Germany. MonoSpace is expected to have a significant impact on its competitors as well as KONE’s own product lines. Now, the biggest challenge is how they should price and market MonoSpace without cannibalizing its existing products. Thus, KONE must develop a detailed marketing plan, including promotion and price strategy.

Background Introduction

KONE, the Finnish company, started its business by repairing and selling of rebuilt electric motors and later switched to manufacturing of more complicated industrial products including elevators. It soon became the world’s third largest elevator company with revenue generated by sales of new equipment (38%) and services like maintenance and modernization of existing elevators (62%).

KONE manufactured a vast variety of elevators, including low-rise passenger elevator, medium and high-rise elevator systems, scenic elevators, hospital and freight elevators, escalators and autowalks, and elevator components. With 90% of its sales outside Finland, KONE debuted MonoSpace successfully in the Netherlands, France, and the UK. Now, as Germany is Europe’s largest elevator market, the management is looking for ways to launch MonoSpace in Germany to compete with the elevator giants there.

Competitor Analysis

When looking exclusively at the German market, six major competitors exist, including Schindler, Otis, Thyssen, KONE, Haushahn, and Schmitt & Sohn. Although smaller companies comprise 32.7% of the new elevator market and 48.2% of the existing lifts in service, Schindler, ranking second in global elevator sales, is the German leader with 17.7% of the new elevator market and 13.3% of lifts in service. Thyssen, the world’s fifth largest elevator manufacturer, and Otis, the global market leader, are the two next largest in both new elevators and...