Strategic Marketing Plan of KONE - Research Paper Example

Kones Strategic Plan Contents Contents 1 Executive Summary 5 2 Key Issues 5 3 Vision, Mission and Corporate Objectives 6 3 Mission ment 6 3.2 Corporate Objectives 6 4 Situational Analysis 7 4.1 Macroeconomic Analysis 7 4.2 Industry Analysis 8 5 Market analysis 9 5.1 10 6 Internal Analysis 11 6.1 12 7 Marketing Objectives 13 7.1 14 8 Marketing Strategies 15 8.1 15 9 Implementation 17 9.1 Product 17 9.2 Place 17 9.3 Promotion 17 9.4 People 17 9.5 Processes 18 9.6 Physical evidence 18 10 Milestones and leadership 18 10.1 18 10.2 18 References 19 Appendices 21 1 Executive Summary Here in this paper a detailed discussion will be done about KONE Company. It is a global leader in the elevator and escalator industry. The organization is very well reputed in the industry. The organization has almost 40,000 employees around the world. The modern business world is ever changing and as the day progresses each and every industry is facing both internal and external competitive challenges. Here in this study the competitive challenges of the organization will be discussed and some management theories will be used in the context of the company. It will also show how KONE might use digital marketing as a competitive advantage. 2 Key Issues KONE is a very well reputed organization in the elevator and escalator industry. It is being noticed that in modern day business, digital marketing is playing a significant role. It is the need of the hour. Each and every global organization is understanding importance of digital marketing in their organizations. Digital marketing is such a promotional technique that, it can attract lots of customers within very short period of time. It reduces lots time and money for organizations. As an organization KONE faces the issue related with digital marketing. It is very important for the company to introduce digital marketing to maintain its competitive advantages. Strength: The organization is well reputed. It is a very old organization. Financial conditions are strong. Weakness: Lack of digital marketing is a serious weakness. Opportunity: New cities are coming up globally. Numbers of shopping malls are increasing. Lots of high rises are being built. Threat: Competitions are increasing day by day. They are using more modern technologies for promoting their products. 3 Vision, Mission and Corporate Objectives Long term vision, mission and corporate objectives are very important for every organization to excel in the future. KONE has very clear vision to provide best people flow experience. Here in this section mission statement and corporate objectives of the organization will be discussed. 3.1 Mission statement The organization measures their progress toward their vision. In course of that, they set some strategic targets. The organization has clear mission to acquire as many as loyal customers as possible. The company is very much committed to provide good working environment to their work forces. Sustainability and market leadership is a big priority for the organization. 3.2 Corporate Objectives KONE has very significant corporate objectives. It wants to be a global market leader on the basis of technological innovation and creativity. Profitability and customer centricity is a very important characteristic of their corporate objective. The organization aims at long term higher financial growth than the normal industry standard. It wants to increase its global presence and want to satisfy different segments of their customers. The organization has decisive corporate objectives to match with different mega trends of the industry. 4 Situational Analysis Situation analysis has great importance for any organization. It is very important for KONE to do situation analysis for its organization. Situation analysis will be done on the basis of PESTEL analysis and business life cycle and market structure. 4.1 Macroeconomic Analysis Political: Political situation in UK is quite feasible for large domestic as well as foreign businesses to operate. But Kone Corporate may has to face political disturbance in setting up new office premises the region and also they may face political pressure from labour unions which can affect its business operation. Kone’s William Johnson argued at opening ceremony of one Kone’s service centre in Tibet that the company has no political motives in any market around the world. Economical: According to World Bank’s statistics, current annual economic growth of United Kingdom is 1.7% in 2013 which indicate considerable growth of economy. After two consecutive major economic slowdown such as the global recession of 2007-09 and European debt crisis, the economy has turned around with substantial growth in few driving sectors like real estate which has considerable impact on leading elevator and escalator providers in the world, Kone. Every day, new office buildings or business towers, shopping centres, government offices and housing complexes have been constructed which have been increasing the demand of Kone’s elevator. Social: Social environmental factors have quite moderate impact on Kone’s elevator and escalator business. According to OECD, the percentage of population over 60 years old is expected to rise from 18% of total population to 31% by next 30 to 35 years. This is one of the major social situations that will lead to rising demand of elevators and escalators to increase the accessibility of mobility with the residential as well as commercial buildings. Technological: Elevators and escalators are high tech mobility instruments, hence, require technologically advanced business environment. The country is well updated to advanced technology as the government has high intervention on providing access to new technologies to the businesses. It gives the organization lots of scope related with research and developments. Legal: UK has very strict and effective legal systems. It is a very significant factor for KONE to do hassle-free, fair and transparent businesses. Environmental: In terms of environment the country is very much sensitive. The organization has to look after all different aspects related with environment in UK. The organization is currently in the established stage of business life cycle. It is a 100 year old company and the market structure is oligopoly. 4.2 Industry Analysis Here in this section of the study industry analysis will be done on the basis of different techniques like porters five forces model, strategic groups and KFS’s competitor profile. Bargaining power of suppliers is medium in the industry as there are very few sellers in the market. It is a good competitive advantage for the company. Bargaining power of customers is medium because the market structure is oligopoly. There are few players in the market, so buyers have very less options. It is also a significant competitive advantage of the organization. Kone has been face high competition in terms of product quality and price with its two major competitors, Thyseen Krupp and Schneider. Therefore, industry rivalry is high which a problem is for KONE. Threat from substitute products is very low because very little substitution can be done in this industry. It is a competitive advantage for the organization. Threats of new entrant are very low. It needs lots of investment to enter in to the industry. It is good for KONE. Strategic group analysis of the industry will be done on the basis of marketing effort and Product quality (Niven, 2005). This industry is highly competitive as far as the product quality is concerned but in case of marketing effort the industry is less competitive which provide good opportunity for the organization to introduce digital marketing. Numbers of different competitors are present in the industry. Those are Thyssenkruup, Schneider Elevator, and Otis etc. Low cost structure and strong supplier networks are key factors for success in the industry. The organization is pretty good in this aspect. 5 Market analysis Market analysis will be done on the basis of position maps, branding models and digital marketing. 5.1 The above picture is showing that KONE has high quality products and its prices are also on the higher side in compare to other competitors. (Source: Kotler, 2009) The organization has very clear cut vision and mission statement. The organization has been able to position their products uniquely in the mind of the customers. It provides lots of benefits to the customers. The brand has very strong personality. Numbers of attributes are also very high with the brand. Customers around the world are satisfied with different attributes of the company products. Digital marketing is very much important for the organization. In this aspect the organization has to improve itself. Digital marketing will help the organization to attract lots more customers. It will increase the competitive advantages for the company. 6 Internal Analysis Internal analysis of the organization will be done on the basis of following things 6.1 (Source: Lüdicke, 2006) McKinsey 7’s: Structure is centralized. Strategies are long term. Highly skilled workers are there in the company. The organization has very well staff selection system. Management style is very friendly. The organization has great shared values. Stories of the company, symbol, power structure, organizational structure, business control system, different rituals and Paradigm talk about the cultural web of the company. Continuous innovation, good quality products and customer centricity are the core competencies of the organization (Ruud, Frederikslust and Ang, 2008). The organization is performing pretty well but it may include digital marketing for achieving sustainable competitive advantage (Gregoriou and Renneboog, 2007). Cost Leadership and Differentiation strategy should be combined in case of organization’s generic strategy. It will give two way benefits to the organization to gain competitive advantage in the industry. The organization must create significant value chain in their whole business process from input to output (Hill and Jones, 2009). It will provide KONE certain competitive advantage in the market. Over the years the organization has performed well in all four areas of balanced scorecards. Those four areas of the company are financial aspect, business process of the company, growth and learning and customer perspective. All four factors are guided by organization’s vision and strategy. 7 Marketing Objectives The company has clear cut marketing objectives. It wants to modernize its marketing strategies. Digital marketing will be very important and suitable for the organization to fulfil its marketing objectives. In case of higher profitability, digital marketing will play a significant role for the organization (McLoughlin and Aaker, 2010). This kind of marketing is cost effective and can attract lots of people within very short period of time. Digital marketing will increase the brand image of the company. 7.1 Marketing objectives of the company are properly in line with the corporate objectives (Jenster,  Hayes and Smith, 2005). Profitability and customer satisfaction are most important corporate objectives of the organization which can be achieved with these kinds of marketing objectives. 8 Marketing Strategies 8.1 (Source: Chakravarty and Eliashberg, 2005) If market attractiveness is high and business unit is either strong or medium then the company can make its investments. In case of low business strength and high market attractiveness the company should protect its invested money. Their investment should be protected in case of medium business strength and medium attractiveness of the market. In case of low market attractiveness and high business strength the company should protect its investment. Low business strength and medium market attraction is the best time for the organization to harvest their money from different investments. Medium business strength and low market attractiveness is also an appropriate situation to harvest investment. In case of low market attraction and low business strength the company should divest that unit. (Source: Hutt and Speh, 2012.) The organization can go for market penetration strategy. In this strategy the risk is less. Markets and products are already there (Reuvid, 2012). Digital marketing will help the organization to increase more fan base. 9 Implementation 9.1 Product Products are elevator, Escalator, auto walks and automatic doors. 9.2 Place Different shopping malls, air ports, office buildings, stadiums, Nursing homes, Metro rail stations and residential high-rises etc. 9.3 Promotion Apart from traditional promotional techniques the organization can introduce digital marketing for their promotional purposes. It will certainly increase competitive advantage of the company. 9.4 People Modern urban people and ageing people should be the targeted customers for the organization to implement their strategy. 9.5 Processes The organization must implement their new strategy of digital marketing in a smooth process. It should take care about all its stakeholders (Fitzroy and Herbert, 2007). 9.6 Physical evidence Physical evidence should be very appropriate, service delivery and infrastructure should be there for implementing digital marketing in the organization. 10 Milestones and leadership 10.1 It is a three steps model. In unfreeze step the organization has to reduce barriers against changes. In transition step the company has to develop new values, behaviours and attitude which will create the platform for change. In the final stage KONE will freeze the change in their organization. 10.2 Democratic leadership style should be followed by the organization. With the help of this leadership style the company will be able to take suggestions from different parts of the organizations and will be able to bring change easily. References Chakravarty, A. K. and Eliashberg, J. 2005. Managing Business Interfaces: Marketing and Engineering Issues in the Supply Chain and Internet Domains. Berlin: Springer. Fitzroy, P. and Herbert, J. M. 2007. Strategic Management: Creating Value in a Turbulent World. John Wiley & Sons; USA. Gregoriou, G. N and Renneboog, L. 2007. International Mergers and Acquisitions Activity Since 1990: Recent Research and Quantitative Analysis. New York: Elsevier. Hill, C. and Jones, G. R. 2009. Strategic Management Theory: An Integrated Approach. New York: Cengage Learning. Hutt, M. D. and Speh, T. W. 2012. Business Marketing Management: B2b. Cengage Learning; USA. Jenster, P. V.,  Hayes, H. M. and Smith, D. E. 2005. Managing Business Marketing & Sales: An International Perspective. Copenhagen: Copenhagen Business School Press DK. Kotler, P. 2009. Marketing Management. New Delhi: Pearson Education India. Lüdicke, M. K. 2006. A Theory of Marketing: Outline of a Social Systems Perspective. New York: Springer. McLoughlin, D. and Aaker, D. A. 2010. Strategic Market Management: Global Perspectives. London: John Wiley & Sons Niven, P. R. 2005. Balanced Scorecard Diagnostics: Maintaining Maximum Performance. New Jersey: John Wiley & Sons. Reuvid, J. 2012. Managing Business Risk: A Practical Guide to Protecting Your Business. Kogan Page Publishers; USA. Ruud, Frederikslust, A. V. and Ang, J. S. 2008. Corporate Governance and Corporate Finance: A European Perspective. New York: Routledge. Appendices Appendix 1: TELESCOPIC     T E L E S C O P I C     Technological advancements Economic considerations Legal and regulatory requirements Ecologic and environmental issues Sociological trends Competition Organizational culture Portfolio analysis International issues Cost Effectiveness and Cost Structure     Technology is ever changing. Economic indicators are good. The industry has fixed legal regulations. Customers are giving lots of importance to environment. Education level and advancement of society is very important. Competition is very high. With clear and decisive corporate objectives. Increasing portfolio is very important differentiator. International market expansion and increased market share is important. Production over head cost and raw material costs have great influence. S T R E N G T H S   KONE is technically very advanced. Innovation is highly encouraged KONE EcoDisc is a newly developed technology. Stable economic situations are very helpful for the organization. Operating income increased by 13.1% in 2012. The organization maintains all legal factors and in UK law is very strict. Separate legal team is there. UK is very sensitive with environmental issues and KONE manages all environmental norms. ISO 14001 certified. UK has very advanced and well educated society which is a great strength for Kone Old and well reputed company. Rich and inclusive culture. The company has very well balanced portfolio. Globally customer base is high. It maintains cost effectiveness very professionally. W E A K N E S S E S   Promotional technologies are very weak. Developed economy has lesser growth rate. It is very difficult to manage all rules and regulations. Sometimes it is impossible to manage both profitability and environment Society is somewhat conservative it is a great weakness for the company. Promotional techniques are traditional. Adaptability can be a great weakness. Products are with very Limited usage. Managing international business is a change. Over head costs are high. O P P O R T U N I T I E S   Modern digital marketing has huge opportunity for the organization Disposable incomes of people are growing. New laws are coming to protect organizational interests Modern equipment are creating lots of opportunity to protect environment Society is changing its mind set, it is also an opportunity. Digital marketing can be a great opportunity. Clear mission and vision statement. Lots of new products can be designed. Emerging economies has huge business opportunities. Efficiency and productivity can be serious opportunity. T H R E A T S   Competitors are implementing digital marketing Global economic recession is a big threat. In pursuit of profitability legal bindings should not be over looked Still pollution will be there. Lots of resistance may have to face. Cut throat competitions from competitors. Diverse employee can be a serious threat. Balance of products can be lost with changing time. Foreign political unrest can be a serious threat. Prices of raw materials are increasing. Appendix 2: OBSERVATIONS     O B S E R V A T I O N S     Organizational Core competencies and capabilities Buyers Suppliers Electronic Commerce Resource audit (including capital structure) Value System A Alliances (including partnerships Networks and joint ventures) T Total quality management I Industry key factors for success O Organizational structure N New entrants Substitute products and services     Sound financial situation. Customer centricity. Number of customers is increasing. Buying behaviors are changing. Suppliers are very special. Electronic Commerce is very important. Resources are limited but demand is unlimited. It has cascading effects on organization success. Everything cannot be there in one organization. Quality is the most important factor. Low Costs structure and suppliers network. Decision making done by top level management. Not suitable for new entrants. Local need can be analyzed. S T R E N G T H S   Innovation, Customer centricity. There are other options to them. Competitors like Thyseen Krupp and Schneider are present in industry. There are other options as the market is oligopoly. Reduces lots of time and money. Resources can be managed very well. Manage organizational values. Increase abilities of the organization. Manage quality at all levels. Cost is less and has strong suppliers network. Centralized organizational structure gives good business control. Established brand image. More varieties of products W E A K N E S S E S S   Is too traditional. Options are very few. It is an oligopoly market. Bargaining power is very medium. Some time very complex. May not be perfect. Every step is dependent. Different work culture can be a serious weakness. It is very difficult to manage quality at all level. Over head cost is slightly high and suppliers are somewhat unpredictable. May be autocratic some time.   Very little substitutes are there. As scope of innovations are very low. O P P O R T U N I T I E S   New leadership trend can has opened lots of opportunities like more intensive trainings and career development programs. New products are coming in the market.   People are going for ecommerce. Can increase competitive edge. Shows new ways. Share of ideas can take place. Can increase brand image. It provides lots of investment and diversification related opportunities. Gap between employees and management is less.     T H R E A T S   Resistance against changes is serious threats. Bargaining power is medium. Lots of new suppliers are coming in the market. Implementation is a serious threat. Threat of mal practices will be there. Can create con fusion in the organization. It can be total failure. Many not suitable for all quality defects. Some bargaining power are there and cost structure is not very much ready for contingencies. Difficult to analyze local factors. Lots of investment required.   Read More