Case Analysis Of KONE

Decent Essays
Register to read the introduction… Approach 2: KONE should position Monospace above the gear traction products, market its distinctive features with high-end price and keep the hydraulic as their low-end model. Since there was less demand for new elevator installation, KONE should focus on profits and not on market share generated from following low cost strategy. Monospace fit price and performance wise relative to other products
Pricing
 Monospace was priced in line with equivalent and more expensive geared traction elevators
 Monospace be priced above existing prices if KONE held less than 15% market share and in line with existing price levels if KONE otherwise
 A significant portion of the savings of not building a machine room would accrue to either the owner or construction company motivating them to specify the Monospace
 In France cost was FF55,000 per year less than that of a comparable elevator (repaying a premium of FF 30000 in 6 years
 In UK was dictated primarily by the 15000 pound TF which put it near the PT price
…show more content…
Key weaknesses in KONE’s current capabilities
• The current Brand of KONE is not at the same level when compared to already settle bigger brands such as Schindler, Otis, Thyssen present in Germany. Therefore, KONE will have to conduct a lot of marketing activities such as Product launch, advertising etc. in order to fully demonstrate its current capabilities to the prospective buyers.

• KONE will have to work with its current network of salespeople in order to convince the purchase decisions makers (general contractor and architects) to enclose deals. Currently, the salesperson’s strength that KONE has for KONE AUFZUG, which operates in Germany, is much lower and outnumbered by four or five to one by other big firms such as Thyssen, Otis, and Schindler. Therefore, in order to effectively mange its selling team in Germany with lesser number of employees, KONE current capabilities will play a major role.

• Property owners’ fear of a monopoly : As the machine-room-less elevator was a revolutionary technology started by Kone, property owners felt they could be left with very little bargaining power as there was no other competitor offering this technology. Convincing prospective customers on this front is a potential

Related Documents

  • Decent Essays

    Monopolies Research Paper

    • 1269 Words
    • 6 Pages

    It is easy to see why a deadweight loss is not ideal for the economy, yet when there is a monopoly these losses occur. Monopolies disregard the idea of an efficient level of output. By taking a look at Figure 1 in the Appendix, it is easy to see what an efficient level of output is. The quantity a monopolist should choose based on this graph is where the value to buyers (blue) is equal to the cost to the monopolist (where the demand curve intersects with the marginal cost curve). A smaller output would reduce total surplus because the value to buyers would be greater than the cost to the monopolist; and vise versa, an increase in output would reduce total surplus because the cost to the monopolist would be greater than the value to the buyers.…

    • 1269 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    Compared to Delta’s past residual value of 10% in 1986, estimating a lower one may decrease the depreciation expense. The straight line is easier to anticipate costs for aircraft replacement than accelerated, due to recognizing expenses faster. Delta can use the useful lives to identify the appropriate cost methods to identify how soon to adjust prices based upon anticipated costs. Delta will have to continuously evaluate their inventory in relation to the industry in order to adopt the best accounting principles. Their current liberal method is creating a lower book value on the balance sheet.…

    • 1056 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Price skimming is a pricing strategy in which the company sets a relatively high price for a product at first, and lowers the price over time. (Gitman, Lawrence J., and Carl D. McDaniel 2010, 393) The objective of price skimming is to maximize short-term profit. One of the advantages of using this strategy is so that the company is able to gauge how much a customer is willing to pay for that certain product. If sales of that product are good even though the product is set at a relatively high price, it means that the pricing can be kept constant. If the sales are not good, the company can then make the decision to decrease the price slowly.…

    • 1973 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    In this situation, lower ratios are desirable. A high debt to equity ratio would spark concern for investors because it would reflect that the company cannot repay its liabilities if the need would present itself. For Moserk, it is just slightly higher than the industry standard. Moserk is at 1.22 and the average is 1.20. They are relatively close to a desirable ratio.…

    • 709 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    Tal Lanka Hotels PLC performed well than Sigiriya Village Hotels PLC by maintaining lower debtor turnover ratio throughout the period. As a result of higher debtor turnover than Sri Lanka Telecom PLC, Dialog Axiata PLC exposes to higher debtor collection period and risk of bad debts. It is recommend to Tal Lanka Hotels PLC to match debtor collection strategies with operational cash flows requirements. Further effective and flexible debtor collection methods leads to the increase to sales. d) Debtor turnover…

    • 1304 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    Benefits Of Outsourcing

    • 894 Words
    • 4 Pages

    I would want the absolute best service for my customers as well as ensuring that my employees have the best working conditions possible. The problem with wanting these two things is that the costs are much higher to provide a better standard of either portion of a business. This would mean that I was a non-competitor in whatever industry I was in. I would have to charge higher prices than my competitors for similar services or goods because my cost of production would be higher per unit of output. The problem with outsourcing is that when a company does outsource to save money, they drive the price of labor down in their home countries as a response to the outsourced labor that is cheaper as well as driving the product price.…

    • 894 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    After a while, though, when tax size keeps increasing, tax revenue actually starts to decrease at some point. In short, as tax size rises, revenue from the tax rises in the beginning, but then decreases. The curve’s maximum is the most efficient point, as it is where the tax revenue is the highest. Putting this in a real-world perspective, based on the diagram, if a government raises taxes then more revenue should be made, putting more money towards government-funded programs (education, healthcare, welfare, etc). However, raising the tax rate when it is already high actually reduces tax revenue, reducing the amount of money that could benefit the people as a whole and thus the economy.…

    • 1219 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Therefore, if promoting the sales may be a driver and indicator of performance, the key factor of success is the low cost, meaning that the company must decrease de overhead and must cut all the unnecessary costs with not needed personnel and expenditures. In short, branding activities are highly vulnerable to costs, whereas brand building requires a high margin that will only return on the long…

    • 887 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    SWOT Analysis Of Motorola

    • 1565 Words
    • 7 Pages

    As the competition in the business is really difficult and enough Motorola needs to be little careful with new technology and innovative move to be the best among the competitors. To be the dominants leader in the market, the marketing and brand image for the multinational companies matters a lot. Motorola is struggling from the telecommunication device failure and as well as with the company division which diminished the company’s performance and productivity. Motorola also have to eliminate the other different types of devices and it needs to just concentrate on the one single device with the great package of features which greatly capture the market and makes the best comeback in the market. The company has the potential to be back and beat the competitors and lead the…

    • 1565 Words
    • 7 Pages
    Decent Essays
  • Decent Essays

    The following marketing strategies are necessary components of a marketing plan that can be included for the proper promotion of the organization offerings. Target Market In the present scenario, it is a fact that the market is diverse and with the allocation of resources, it is almost impossible for the customers to trust within a specific product; which will be beneficial for them (Daine Watkins, 2011). This is the reason a business needs to have certain target customers. In addition, a business keeps developing by keeping in mind certain demographic factors and target customers, for instance, the luxury products are targeted towards the high profile or high income group of customers. Again, the psychographic factors determine the target market, like, offering products or services to customers of certain lifestyle.…

    • 1317 Words
    • 5 Pages
    Decent Essays

Related Topics