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Our marketing recommendation is to launch MonoSpace with the opportunity to act swiftly and decisively with highlights of lower electricity costs (highly energy efficient, consumes less power and energy companies offer rebates), space saving (no machine room), and avoiding hazardous hydraulic chemicals (lowering lifecycle cost while providing a cleaner environment). Kone should prepare to strategically attack the 74% proposed low rise elevator market in Germany. With decreasing profit margin at Kone, evasive actions and MonoSpace can provide higher margins with a “New” technological advantage point. The pricing point of MonoSpace should be set closely to the hydraulic system at $43,800 which accounts for approximately 60% of the German low-rise elevator market. We noted that this will erode the current product line by the launch of MonoSpace, but the overall market share of KONE will increase. In addition, position MonoSpace into two markets that provide limited barrier entry: renovation market and “New” technology equipment market.
Limiting barrier entry into service, we could divide MonoSpace into two markets: renovation market and new equipment market. The renovation market would work on the property developer, who is involved with the overall cost. We will emphasis the long-term cost savings for replacing an old elevator with a MonoSpace with long term energy savings benefit, energy rebates and lower maintenance cost (exhibit 1). For new equipment market, we will focus on the architect customer, small contractors rely on architects to select elevators. In this, we will have targeted the entire low-rise elevator market with cut rate general contractors maki ...