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Kone

Significant restructuring and consolidation in the late 1970s and 1980s found the worldwide elevator industry dominated in the early 1990s by five companies:Otis of United States, Schindler of Switzerland; KONE of Finland; Mitsubishi Electric of Japan; and Thyssen of Germany. Although they competed globally, these companies generally remained strongest in their domestic markets. Numbers and types fo elevators sold varied dramatically across the globe, reflecting factors such as urbanization, population density and government supprot for public housing.

Elevator industry business was traditionally split into two sectors: new equipment and service. This traditional separation of product and service had generated interesting competitive dynamics in the elevator industry. Competition for new elevator installation was fierce leading to new elevator equipment often being sold at or below cost by the large competitors. On the other hand, competition for elevator contracts was different. Equipment suppliers usually had an advantage in winning conracts to service their installed bases.

Low entry barries due to the relative simple electro-mechanical technology, steady demand and high margins in the service market had

1. Termed PT - Most common, least expensive.

Drive mechanisms: The primary elevator drive mechanisms are gearless (high speed) or geared (medium speed) traction (also called rope) and hydraulic.

Ed = %ƒ¢ Q/ %ƒ¢ P , ceteris paribus.

By using the formula : Revenue = P*Q

Which will give us price of service = 25.113 DM.

Monospace will, of course, take some of other KONE's products market share. Sine monospace has some advantages that do not exist in other low rise elevators, that would make it more attractive for customers , especially ,if it were priced and positioned well in the market of Germany. However, there are some customers who do not like to change from the traditional type of elevators. Those customers can still use other KONE's low rise elevators. In general, some customers will shift from traditional KONE's elevators to Monospace ; some customers will stick to their traditional KONE's low rise elevators ;and some customers of KONE's competitors will be attracted to use the new Monospace elevators with its advantages. As a result, even if Monospace would cannibalize sales of KONE's existing products , KONE would end up with more total sales than before, since KONE would be having more diversified basket of products which gives customers more options when come to buying.

Some topics in this essay:
MonoSpace KONE, DM Monospace, Thyssen Germany, V1 Services, ANALYSIS Demand, PU KONE's, Ed I<, Technology Elevator, KONE Aufzug, France UK, ed =, price elasticity, market share, 15 %, revenue =, purchasing decision, low rise elevators, < ed, = *, total revenue, elevator technology, < ed i<, ed = %�¢, %�¢ q/ %�¢, = %�¢ q/,