Kone Great Britain- Strategic Plan - Case Study Example

KONE GREAT BRITAIN (GB) STRATEGIC PLAN al Affiliation KONE GREAT BRITAIN (GB) STRATEGIC PLAN Executive Summary KONE GB is one of the leading firms that deal with both residential and commercial elevators, doors, and lifts. It has its largest market share in England, Scotland, and Wales, but the increasing demand has led to its investment in global markets. The case study has revealed various issues that affect the operations of KONE GB. One of the major issues is the companys potential to supply a larger market; hence, increasing competition strategies (Shankar and Carpenter, 2012). It has not fully invested in digital marketing as part of its approach to increasing its market share. An analysis of its market approaches shows that the firm has had its presence in Europe since its establishment. Additionally, the company has not used its capital accumulation to enhance its growth in other markets, unlike other firms that have targeted infant elevator markets. An analysis of its product and services shows that the company has provided dedicated its production line in people flow. Most of its products include automatic doors, auto walks, elevators, escalators, and access control systems. Its branding strategies have increased its target markets ensuring an increase in sales and capital accumulation. It also targets the service industry that has been rated as one of the fast growing markets globally. The diversity of products also assists in its competition strategies leading to its high ratings in the top global firms list. An increase in its main markets requires that the firm should adopt services such as digital marketing to ensure all customers in the markets (Asia, Europe, and the U.S) are covered without any delays. 2. Mission Statement and Corporate Objectives 2.1 Mission/Values Statement. KONE GB’s mission statement is based on the safety of customers. Its dedication to people flow is the driving force for its production and product quality. The firm ensures that its products have undergone safety tests since they directly deal with the people. Ensuring maximum security and a smooth flow of people with flexibility and scalability is a mission statement that governs the employees in their production process. As a result, its products have been rated safest compared to its competitors. It has also incorporated advanced technology in its products to reduce the risks of breakdowns. In the values statement, the firm has engaged in class that is required in the service industry. For example, it has made attractive elevators and escalators that can be used in luxurious hotels and malls. They ensure that customers can customize their product; hence, acting as a strategy to increase its market share. 2.2 Corporate Objectives KONE GB’s corporate structure has come up with friendly objectives that deal with finance and other strategic approaches that contribute to the firm’s success. The company offers both service contracts and equipments to a large source of capital. It has also employed market segmentation enhances the chances of customer loyalty. Financial strategies such as the reduction of operational costs and the reduced price of the items have also been included in the corporate objectives (Hill and Jones,2010). Another objective is to employ worker satisfaction in the firm to ensure profitable results. 3 External Analysis The external analysis ensures that a firm maintains a successful relationship with its macro environment (Murray-Webster, 2010). As for KONE, it has different factors that affect its production and market growth. The external factors include competition, demographic, political, social, economic, legal, and technological among others. A PESTLE analysis may be used to comprehend KONE’s external environment. 3.1 Macroeconomic Analysis / PESTLE analysis Political factors can be used to determine the extent to which particular governments influence the economy. Most of KONE’s production and branches are located in Europe that is governed by friendly economic laws. They also include company taxes and other legal fees that have to be paid for the establishment of companies. KONE GB faces a barrier in some external environments; hence, venturing its production in the three major markets. Economic determinants have direct impacts on the long-term factors of the economic growth. They include issues such as interest rates, inflation rates, economic growth patterns and foreign exchange rate. KONE GB experiences such factors while dealing with international markets that are regulated by different economic features. Its importation of services and products to markets such as Asia has faced these barriers. Foreign exchange rates have direct impacts on the profits of international companies. Social factors act as determinants of the social environment and include cultural trends and population analysis among others. KONE GB experiences these social factors based on markets. Market segmentation makes sure that the trends have been determined and included in the marketing strategies to ensure that products meet the required social environments. Technological issues in the external environment include innovations and advancements that affect the production process. The factors also affect the competition strategies from rival firms in the industry. For example, KONE GB has to employ advanced technologies in the production of its elevators and escalators to ensure safety and security. Additionally, there are also cases where technological advancements are set by various organization to ensure different need have been met. As a result, such limits affect the technological levels of KONE GB. Legal factors affecting the business environment include policies and restrictions due to various determinants. Consequently, KONE GB faces these factors in different production fields. For example, the legal factors in Europe may differ from those in the Asian markets; hence, requiring flexibility in production processes. Safety standards and labor laws are included in the legal factors. Environmental issues include those that KONE’s existence directly or indirectly affects. They include climate, changes in weather, and tourism among others. The manufacturing processes should not have negative effects on the environment but should instead contribute to environmental conservation. 3.2 Competitive Analysis A competitive analysis includes the assessment of the strength and weaknesses of potential and current customers as an approach of strategic management KONE GB has used the strategy as a corporate approach to the market targeting and segmentation. Its major competitors include Otis, Schmitt & Sohn, and Thyssen among others. The analysis should come up with threats and opportunities of the firm. For example, the analysis shows that KONE GB has an opportunity of adopting digital marketing as a strategy to increase its customer network (Ryan and Jones, 2012). The competitive analysis can also be examined by determining Porters five forces. The bargaining power of suppliers will be used to determine how easy they can increase their prices. KONEs suppliers include those providing material and technological assistance to the firm. The bargaining power of buyers shows how the customers can drive the prices down. Competition rivalry, on the other hand, is used to measure the capability of the competitors. Threat of new entry explains the presence of a potential competitor that may enter the market. Finally, the threat of substitution is used to monitor ways that competitors are adopting in their manufacturing processes. KONE GB has adopted various technological advancements that have assisted it in its product and service provisions as compared to its competitors. As a result, it is in the top five firms in the industry. 4. Internal Analysis 4.1 Portfolio Analysis. The analysis can be used to prioritize the investment function in a business. It includes the plotting of the strength of a product against the industry attractiveness (Pahl and Richter, 2007). The three main factors include the growth, hold, and harvest. KONE GB’s growth has been facilitated by investing in new markets and increasing the capital base. The hold happens when the market is consolidated and perfect investments are being made. The harvest or sell occurs when there are no more investments, but the company is enjoying and maximizing the returns on the investments. The main determinants are the market attractiveness and the based on competition and market size. Figure 1 Box Matrix McKinsey in courtesy of toolshero Analysis of Strategic Capabilities (The firm’s Unique Resources and Core Competencies) An analysis of KONE GB’s strategic capabilities shows that it has various strengths that can be used in its competition strategies. A resource-based view examines the internal factors such as physical, human, and organizational resources (Sanchez and Heene, 2010). KONE’s physical resources include its assets and capital accumulation that has increased with time. Its increased market share has secured it most of the physical resources including the company’s headquarters. Human resources include the company’s dedicate workforce that has ensured customer satisfaction and product quality (Davis, 2013). Additionally, KONE’s corporate structure has made sure that the human resource department hires only professionals to raise chances of success in the market. The core competencies include ways that the resources have been employed as competitive strategies. KONE GB has used the physical resources such as machines and raw material to achieve plant utilization standards. It includes the presentation of trustworthy products that have global security and safety standards. Financial resources have been utilized in raising more funds and acquiring loans to help in the expansion of market and production capabilities (DeWitt, 2015). Human resources include the use of skilled labor, experience and knowledge and ways of sharing the factors among the employees. However, KONE should not venture in capabilities such as rigidness that may prevent flexibility in the changing environments. 5. Strategic Marketing Framework 5.1 Analysis of Bowman’s Strategy Clock The Bowman’s Strategy Clock can be used to gain information on why some companies gain competitive over others in the same industry (Böhm, 2009). The analysis gives a company’s position in the competition sector based on various factors. Hybrid/price differentiation It includes the introduction of low priced products that have a higher perceived value as compared to other low-cost products from competitors (Hollensen, 2012). KONE GB offers high-quality escalators, elevators, automatic doors auto locks and other products at low prices, but their quality is preferred by many customers in the market. As a result, the differentiation has made the company the top three elevator companies globally. Customers are always assured of reasonable price and high-quality products from KONE. Cost leadership It occurs when a firm leads in the prices of its products and customer loyalty (McDonald and Dunbar, 2012). Consequently, the firm can gamble and raise its prices while monitoring the customer numbers. The number of customers may not reduce; hence, increasing the number of profits of may decrease causing an increase in the production costs. Notably, giant firms that have had a large capital accumulation enjoy cost leadership. KONE GB has an added advantage in cost leadership due to its large size and expansion strategies. The large capital bases can be used as sources of income in case of cost deficiency. Market segmentation It includes the dividing of the market into various sections depending on the size, businesses, customers and presence of common needs (Rao and Sivaramakrishna, 2008). KONE GB has employed market segmentations strategies whereby it has targeted specific markets. The segmentation ensures that production is dependent on need from each segment. For example, KONE GB has targeted the service industry where it has provided products and services to hospitals and hotels. The segmentation has assisted in product differentiation in each sector; hence, contributing positively to the overall success of KONE GB . Adoption of technology and advanced machinery in its products has acted a competitive strategy since KONE has provided suitable, fast, and secure residential and commercial products (McDonald and Dunbar, 2013). The incorporation of technology has helped in saving the time spent while installing most of the products such as lifts. They also enhance security and safety measures that are the core factors in the elevator sector. Figure 2 Ansoff Matrix in courtesy of Hill and Jones (2010). 6. Strategic Choice Based on the Ansoff Matrix, the new market development is the major factor that has applied to KONE GB. The firm has had large market shares in Europe, America, and Asia. However, there has been a potential new market in the Middle East, Africa and other third world countries that require most of KONEs products. The Middle East, for example, has invested in high rise buildings in the service industry and also residential apartments. KONE GB can use its market capitalization to expand its activities to these potential markets. KONE GB may also use its market development strategies to come up with e-commerce and digital marketing that will expand its awareness to other markets globally (Parkin, 2009). Its product diversity will also assist in the market expansion needs and competition strategies. The new market development will have a high level of acceptability and sustainability due to the product diversity and adoption of digital markets. KONE GB will manage to secure many tenders in the developing markets. It low prices and product quality ratings will also assist in its venture into the new markets. 7. Strategic Implementation: Digital Marketing Strategies 7.1 Online Channels There are various online platforms suitable for KONE GB’s digital marketing strategies. They include advertisements in social networks, encouraging conversations in blogging sites, internet adverts in sites such as YouTube among others and Google (Cousins, 2008). Social network marketing will include posting new products and offers in Twitter and Facebook. Most successful global companies recommend the implementation of online marketing because it emphasizes in the cause of awareness despite the geographical boundaries. KONE has its headquarters in Europe but with the help of online marketing customers can access the catalogs from different locations globally. It may also include the use of a website such as pay-per-click that includes the use of secondary online marketers to market goods on behalf of the company. It directs traffics to various websites that want to advertise their products. Google AdWords also is an example of this model that attracts customers with the searched products on behalf of the firm. Such marketing strategies will also ensure that product market segmentation where KONE will comprehend different market trends without the need to have branches in these markets. Blogging will also be used to present data and feedback from customers that can be used to rate the products (Greenberg and Kates, 2008). Since KONE has a good reputation of its products, it can have the bloggers talk about its services and products and quote comments from different purchasers. 8. TOWS Matrix Strengths The company has invested in product differentiation; hence, coming up with the Mono-space that requires no oil for its operation. Subsequently, it enhances better safety and reduces installation time. Elimination of the machine room also acts as an advantage to the customers; hence, leading to customer satisfaction. Opportunities KONE GB also has a large capital and customer base that increases its opportunities for obtaining loans and investments. The large number of customers can be used as sources of high ratings and preferences in the advertising strategy. Positive customer reactions to the Monospace technology can also be used as an opportunity to boost the expansion strategies in new markets. Weaknesses KONE GB has faced a challenge with some of its elevators where some lack ventilation. Additionally, some of the elevators can only be used in specific conditions such as temperature; hence leaving places such as penthouses not suitable for their products. Threats There is competition from low-priced rivals that have been in the industry for long periods. They have acquired large capital bases and can be used to increase the market capacity. Additionally, KONE GB has also faced challenges from regulations and policies that govern various products such as elevators. They include security and safety measures that may cause the firm to incur more costs in operation. Reference List Böhm, A. (2009). The SWOT Analysis. München: GRIN Verlag. Cousins, P. (2008). Strategic supply management. Harlow, England: Prentice Hall/Financial Times. Davis, B. (2013). Managing business analysis services. Plantation, FL: J. Ross Publishing. DeWitt, J. (2015). Kone expands with German company. [online] The Quad-City Times. Available at: http://qctimes.com/business/kone-expands-with-german-company/article_9e1f5f6c-ccab-5790-92bd-c708f41719fd.html [Accessed 10 Mar. 2015]. Greenberg, E. and Kates, A. (n.d.). Strategic digital marketing. Hill, C. and Jones, G. (2010). Strategic management theory. Mason, OH: South-Western/Cengage Learning. Hollensen, S. (n.d.). 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