The KONE Case Executive Summary

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EXECUTIVE SUMMARY In 1996, global construction slumps and low product differentiation in the elevator industry resulted in significant price competition and margin erosion. KONE developed the Monospace elevator that uses revolutionary technologies. It test marketed the product in three European countries with varying degrees of success. KONE was to launch the product as a strategic dominant of the low-rise residential elevator market in Germany, which was its largest country market in Europe and vital to its …

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…might allow MonoSpace erode its high-end geared market. But since the product could be used only as 8-13 person elevators for up to 12 floors buildings, the erosion is limited. Another problem we learned from the preliminary markets was that customers worried that KONE would be able to price gauge them since KONE was the only one with this sort of technology. KONE might have to provide some kind of service guarantee to fix the problem.