KONE PLC Strategic and Digital Marketing Strategy - Business Plan Example

Strategic Report to KONE PLC Board of Directors To: Board of Directors From: Date: 22 March, 2015 Subject: KONE PLC Strategic Plan – including digital marketing strategy Executive Summary This report discusses KONE’s business operations that include their mission, vision and core values statements. Moreover, it looks into corporate objectives of the company that helps operate in combative market. Macroeconomic analysis is also discussed on the business environment of the company. Besides, internal and external analysis is performed on different aspect related to the company. Strategic marketing strategies and choice are discussed to help understand the future operations of the company. Finally, a SWOT analysis is conducted to understand well the areas that affect the company’s operations. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Mission Statement, Vision Statement and Core Values 4 Vision Statement 4 Mission Statement 5 Core Values 5 Corporate Objectives 5 External Analysis 7 Macroeconomic Analysis 7 PESTLE analysis 7 Economic factors 8 Social Factors 9 Technological Factors 9 Environmental Factors 10 Political and Legal Factors 11 Internal Analysis 11 Analysis of Strategic Capabilities 11 Strategic Marketing Framework 13 Strategic Choice 13 TOWS Matrix 15 References 16 Introduction KONE is among the leading global enterprises dealing with production of elevators, escalators and automatic doors. They are committed to understanding the market needs of their customers so as to provide sustainable and innovative solutions in this highly technologized era. Therefore, producing systems that ensure modernization and maintenance is achieved efficiently and effectively is among their key priorities. Moreover, their main goal is to create a customer experience in movement of people within building in the urbanized setting of the current world that is safe, convenient, smooth, and comfortable (Aggarwal, 2011, p.51). Mission Statement, Vision Statement and Core Values It is worth noting that navigation between different rooms in hotels, offices and buildings is a complex and exhausting experience that can be frustrating to individuals. Ineffective systems that cannot improve or eliminate these challenges make the navigation more unfruitful. Therefore, KONE brings the solution to the market by providing systems that can offer solution convenient movement within such places. Their systems create an experience that makes customers to enjoy flowing from one place to another without inconveniences. This improves businesses productivity, corporate customer experience and saves resources in the process of moving from one environment to another. Vision Statement The vision of the company is to create an unmatchable customer experience in flow of people within buildings. It aims at creating a rich experience to all the customers who use their products and services for movement purposes. This gives them the mandate to inventing and innovating creative solutions in the market that ensure that the flow of people is sustainable in all aspects. Mission Statement Their mission is producing market solutions with the products and services they produce to the corporate world. They commit themselves to making highly innovative systems that show that they understand the market needs of movement of people. This is achieved by integrating technology in their systems to improve the existing customer experience. Hence, technology has helped to evolve the flow of people by reducing issues, challenges and problems that has faced the sector in the previous years. Creating operational excellence and reducing cost in all environments where their systems are installed. Core Values Lovelock and Wirtz (2011, p.37) state that core values help an organization to approach their work programs and business operations with a defined focus so as to achieve targets. They govern how they conduct themselves as an organization as well as individuals representing the organization. The core values that guide KONE in accomplishing their set strategic objectives are being passionate in performance, customer gratification, generating energy for renewal and developing a winning team. Corporate Objectives KONE has a strategic objective of creative worthwhile experience in the market that is competitively unmatched with other providers in the elevator and escalator industry. They aim at generating solutions in the market that improve sustainability in forms of convenience, comfort, safety and smoothness during customer flow within buildings. Therefore, they dedicate their efforts to revolutionizing the flow of people in the urbanized environment to ensure that people use the shortest time to navigate through buildings in a convenient manner. This will ensure that best user experienced is demonstrated in places where their products and services are employed. Another objective is creating a customer base that is loyal to their products and services. This will improve their sustainability in the market and increase their competitiveness in the elevator and escalator industry. Moreover, the company wants to create a conclusive working environment for their employees to enhance productivity and performance both corporately and individually. This requires them to creating comprehensive teams that handle different operations within the organization an equipping them will resources and skills required in accomplishing their objectives (Collins & Kearins, 2010, p.499). Finally, KONE desires to be the leading enterprise in the industry in terms of profitability. This strategic objective guarantees support from all their stakeholders who help the business to continuously improve and dominate in the market for improved benefits to them all. Hence, combining all these four objectives in an integrated manner will help KONE Group to be respectable and competitive company in the elevator and escalator industry. On the other hand, KONE’s long term financial objectives is to enhance their financial growth rate to achieving a 16% EBIT, increasing their working capital rotation as well as growing at a faster rate than the market. They will achieve the enhanced market growth by strategic market positioning and competitive pricing of their goods and services. Their sustained market operations will ensure that there is improved cash flow rotation. Thus, with time they will be able to achieve their long term objective of 16% EBIT. Therefore, it is worth stating that these financial objective gives direction to the company in a competitive market so that their do not deviate from their focus in the process of execution. External Analysis This is the process that helps the business to scan and evaluate the external factors that relate to the running of an organization so as to determine their effects on performance and productivity. Due to various factors that surround the running of an organization such as competitors, customers, suppliers, technology, environment, and government among other factors. The ability of an organization to identify and act accordingly to these factors determines its competitive factor in the market. Changing trends in these factors have significantly influence on the strategic plan of an organization determining its progress. There are innumerable benefits that are reaped from responding to these external factors that include profit generation, reducing cost, increasing knowledge, supports change execution and enhancing organization relevancy (Stoner & Wankel, 2010, p.29). Macroeconomic Analysis PESTLE analysis This is a strategic management framework that is employed to help determine various factors that affect the operations of an organization. It looks into issues related to Political, Economic, Social, Technological, Legal and Environmental factors (Laura, 2012, p.35). Economic factors KONE wants to improve in the economic expansion in the market where they operate and the company plans to enhance their financial growth rate to achieving a 16% EBIT. Moreover they want to increase their working capital rotation as well as growing at a faster rate than the market. To achieve this they will be required to strategically position their products and services in the market, competitively price them and this will eventually lead to increased cash flow in their financial records. Pricing is a significant determinant of a company economic strength in a market. KONE is supposed to provide their products and services at affordable and competitive prices so that they can realize their sales targets (Tachizawa & Pozo, 2012, p.39). KONE is involved in market researches that help it to understand the market needs and integrate the latest strategies and policies in ensuring their products are services are up-to standard. This makes the company present products and services that are relevant in the market this also helps the company to identify and follow current market trends that customers are attracted so that they may integrate them into their production processes in additional to quality control. These are some of the strategies that help the company to competitively align itself in the market. Additionally, KONE deals with a global market that is controlled by the international exchange rates and any shifting of the rates affects their business. However, the company has developed strategies that ensure that suppliers of components and materials used in production deliver them at the most cost-effective rates maintaining high quality standards. Furthermore, KONE has established a chain of suppliers who ensure that demand in the market is satisfied timely so that they may increase customer loyalty (Rausch, Sheta, & Ayesh, 2013). Social Factors Urbanization is inevitable as many people are shifting from rural areas to urban areas at a very high rate. It is estimated that in the next two decades the urban population will have increased by 1.4 billion people. This shows how congested and development will have happened within different cities around the world. Hence, it creates a need for KONE to prepare for those times so as to respond to them effectively. Their products and services will be in high demand so as to serve the increased needs of people in the cities. Moreover, statistics show that by 2050 the number of ageing population will almost have doubled and this creates need to improve mobility in buildings and homes. Thus, it creates opportunities for KONE’s probability to expand its operations and delivery of products and services. There will be increased need to support the old people to navigate buildings and this helps the company to act in preparedness to responding to the needs of these old people who require comfort, safety and convenience during navigation. Therefore, their future strategic plans should consider such opportunities as well as giving them the chance to research more on how to effectively respond to such needs. Furthermore, the increasing trend of people seeking for more comfort and improved consumer experience provides a window of opportunity for KONE to grow since most modern building require elevators, escalators and automatic doors among other needs that improve convenience in navigating such places. This has potential to contribute positively to the growth of the company. Technological Factors Technology has grown expensively and almost all sectors of operation are integrating technology to its operation to improve performance, productivity, effectiveness, enhance quality and save costs. Likewise, in elevators and escalators industry technology has been significant factor in production of innovative and relevant products in the market to suit the current customer needs. KONE has not been left behind in implementation of these technological innovations in their business operations. Hence, it is worth noting that technological advancement and innovation is among the company’s success contributors. KONE has been acknowledged by Forbes listings in the category of most innovative companies and in 2013 it was ranked 37th position. Moreover, their KONE Design Collection has won awards in recognition of their contribution to the industry (Yen-Chun et al., 2010, p.520). They have designed large collection of the types of elevators, escalators and automatic doors that a customer can chose from according to their needs and specifications. Moreover, they have options of customizing their products according to the architectural needs of customer so that they can fully satisfy their market. Their team that handles project management and installation services effectively performs their tasks in a manner that saves time and considerable costs to the customers. They also have KONE JumpLift that is useful during construction for delivery of people and materials required during the process. This saves cost and time ensuring that safety, convenience and timely completion of projects. Some of their most technologically advanced products include KONE EcoDisc motor, KONE UltraRope and KONE MonoSpace elevator. These products have gained them recognition in inventing sustainable solution to smooth people movement. Environmental Factors Environment is a significant factor to almost all the sectors of operation because it interferes with the daily running of the organizations. Since KONE’s products depend on the level of construction around world, anything that affects construction processes affects its operations. Therefore, bad weather can reduce businesses performed by KONE due to delayed supplies, cancelled orders and decline in orders. On the other hand, stability in good weather and increased need for construction stimulates business. Political and Legal Factors In every country there are laws and regulation that govern activities that happen within their bounders. Every company must adhere to the set regulations as well as complying with existing codes in the country, KONE is not an exception. Given that their operations are global, it is expected that it complies with these regulations and codes according to local requirements. However, KONE’s products and services are produced with the highest market standards that ensure that all the laws and regulations have been assessed and certified with the related bodies in a country (Lacy & Hayward, 2011, p.348). Restrictive regulations and standards can affect the company’s business in that market. Moreover, political atmosphere of a country and region determines the demand for KONE’s products and services. An example of political atmosphere influence can be demonstrated by the improved political environment of Asia Pacific Area that has resulted to increased demand for KONE’s products and services in the region. This can be attributed to increased development projects in the region. Internal Analysis Analysis of Strategic Capabilities Internal analysis consists of evaluating internal factors that affect the running of an organization. These factors are vital to the profitability, sustainability and performance of a company in the market. One of the KONE’s objectives is creating a comprehensive team that can help the production process as well as handling all the operations of the company. Their leadership culture is established in a manner that helps management and staff to interact effectively and productively. It is an empowering, engaging, and inspiring culture to employees that results to enhancement of personal and career competency to develop all-round individuals. Moreover, this improves the work environment and productivity is achieved in all areas of operations (Kotler & Keller, 2011, p.45). In addition, KONE is dedicated to creating the best customer experience both in their stores and in usage of their products. Their business systems encourage provision of best-in-class interactions to all their customers. This helps them to improve customer loyalty and understand their needs better so as to improve customer service that results to increased sales. Besides, they create competitive products and services that provide a customer experience that is the highest quality. This increased their demand and relevance in the market among their customers. Service leadership is another strategic capability that gives KONE a notch in the market. The company ensures that their products attains to their predicted life-cycle with high performance and quality. This requires the company to invest in highly qualified staff and ensuring their quality control is of high quality. Hence, this guarantees production of products and services of high performance and lasting longer in their service delivery. Finally, KONE has an excellent delivery chain that seamlessly provides goods and services to the market. This ensures that the process from suppliers to the installation phase is cost effective and friendly so that unscrupulous individuals can be eliminated from the system. This helps to gain market confidence and increase customer loyalty. Therefore, by prioritizing on quality, simplification and safety helps them to achieve their objective effectively (Kerin & Hartley, 2012, p.52). Strategic Marketing Framework Understanding the target market well for any products and services helps a company to effectively influence the market and strategically position itself in the market. KONE operations in market segments aims to target residential buildings, medical facilities, public transportation and airports, hotels, retail centers, office buildings, and special buildings (Goldratt & Cox, 2012, p.63). In residential buildings and hotels they install elevators for people to be able to navigate through floors in a convenient, comfortable and safe manner. KONE provides owners with systems that provide high quality machines with excellent maintainability and reduces energy consumption solutions. In hospital environment they provide hygienic solution by installing elevators and escalators that ensure that safe, reliable ad accessible service provision. Moreover, in public transportation and airports as well as retail centers they provide elevators, escalators, and auto walks to improve navigation in crowded areas. Finally, KONE provide solution to offices of all heights so as to ensure that the flow of people in and out of the office environment is made convenient and accessible. Strategic Choice The company’s growth and future megatrends of elevator and escalator industry are presented in the graphs below Population growth in future that raises need for elevators and escalators Prediction of the ageing group that will require more elevators and escalators .Digital Marketing Strategies With the increased technology use digital marketing is inevitable in business market. KONE needs to employ digital marketing strategies to be able to understand their customers’ needs and satisfy the market demand as well as creating awareness of their products and services. They can utilize corporate websites to inform their target customers on their available products and services. The can also utilize the available social media platforms to interact with their customers to obtain feedback and comments on customers’ expectations. Google Plus, Twitter, Facebook and emails can be used for such interactions. This will help KONE achieve their object of providing best customer experience (Rausch, Sheta, & Ayesh, 2013). TOWS Matrix KONES Strengths are: Providing products and services that prioritize safety, quality, and simplification. Their Opportunities are: Utilization of increased technology, increased urbanization and increased need for convenient navigation of individuals. Their Weaknesses is: Their operations are vulnerable to climatic changes. Their Threats are competitors and fluctuating international currency prices. 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