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Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou

19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 1

The Economist: The lift business: Top floor, please

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People live and work more “vertically” than ever before

Trend towards urbanization Every year 70m. people move to cities worldwide By 2050 2/3 of world population will reside in cities Increase of 2.5 billion people 90% of the increase in Asia and Africa

19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 2

Lift: A continuous need

Source: 2014 Revision of the World Urbanization Prospects

Source: wikipedia

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New installations: From 300’000 10 years ago to 700’000 today, 67% of them in China

Market is moving east China, India, Turkey, Middle East

Europe 50% of lifts worldwide Maintenance Refurbishment

Double revenues by 2015

19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 3

Global Demand

Source: 2013 KONE estimations

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New installations 10% margin Not stable revenues - affected by economy’s fluctuations

Maintenance 25–35% margin ($2,000–5,000 a year) More stable revenues Contracts at the time of installation act as barriers for

newcomers Antitrust authoriries fine for fixing German & Benelux prices

Refurbishment … promising profits19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 4

The Business – What drives profits?

Source: BBC news magazine

Source: avenuestosuccess.com

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4 firms control the lion’s share 67% globally

In China growing competition from: Mitsubishi, Hitachi More than 500 Chinese local companies

Maintenance: Captive business in Europe and America: big companies China: local companies or not at all

Service business with lag for big companies

19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 5

Industry Competition

Logos’ source: companies’ websites

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Main Challenge: cost leadership cheaper production, larger margins Manufacture & R&D massively outsourced to Asia Global standardization

Economies of scale Sales of pricier offerings are on demand

Double-decker elevators Keycard elevators

Sustainability Speed & Comfort Space Saving

19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 6

Business Challenges – Trends

Source: http://sourceable.net/elevator-trends-technologies-transforming-tall-buildings/

Source: http://bestdesignews.com

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Customer’s perspective Little evolution Dominant design

Producer’s perspective: Significant additions that add value and differentiate from competitors but not great

breakthrough Patent war

Slows down evolution New inventions must be cheap(-er) cost leadership

19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 7

Lift Evolution

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Main Advantages: 80% less energy, no machine room, no danger of being trapped, 100% environmentally friendly

A small manufacturer (Mezolift) first introduced the solar lift for small houses (2011)

Big firms followed (e.g. Schindler in 2013) Rigid production process Cost issues

19.04.23Group Kappa: A. Lamprou, A. Lazaridis, S. Louziotis, C. Paschou 8

Case Study: Solar Lift

Source: http://elevatortoday.com/2012/10/13/mezolift-first-solar-elevator/, Schindler

Thank you!