Hitt 13e Case Teaching Notes
Case 8: UltraRope: Crafting a Go-to-market Strategy
for Kone’s Innovative ‘UltraRope’ Hoisting Cable
Case Synopsis
The elevator or “vertical transportation” industry is organized into three main categories:
installation, maintenance, and modernization. In recent decades, this industry has been
dominated by four main manufacturers that also provide modernization and maintenance
services: Otis (United States), Kone (Finland), ThyssenKrupp (Germany), and Schindler
(Switzerland). Thousands of other small, independent companies also specialize in
maintenance.
Kone Corporation, one of the world’s leaders in the elevator and escalator industry, is
headquartered in Espoo, Finland, and employs more than 47,000 people. The firm has grown
dramatically since its founding in 1918, in part due to strategic acquisitions that have opened
doors to new products, new markets, and new knowledge. Kone has long been viewed as a
technological leader thanks to innovative products like the MonoSpace.
Learning Objectives
• Explain the importance of analyzing and understanding the firm’s external environment.
(Chapter 2)
• Define and describe the general environment and the industry environment. (Chapter 2)
• Identify three basic benefits firms gain by successfully implementing an international
strategy. (Chapter 8)
• Describe the three international corporate-level strategies. (Chapter 8)
• Discuss environmental trends affecting the choice of international strategies, particularly
Strategic Issues and Suggested Discussion Questions & Answers
1. Use the five forces and data on the external environment to compare and contrast the
three main categories of business within the elevator industry—installation of newly
manufactured elevators, modernization of existing elevators, and maintenance of all
elevators. If you wanted to start your own business and could only pick one of these
areas, which would you choose and why?
At first glance, the manufacture and installation of new elevators appears to have great
potential. The required materials are rather commonplace, so the bargaining power of suppliers
2. UltraRope is a new and differentiated product. What recommendations do you have
for Kone’s go–to-market strategy to introduce this new product internationally?
Students may not be familiar with the term “go–to–market strategy,” but they should
understand the concept of a differentiated strategy. Differentiation requires demonstrating a
unique and superior value to customers for which they will be willing to pay a premium. The
same will be true for the go-to-market strategy for this individual product. Kone needs to
Exhibit 3
3. Describe the international corporate-level strategy Kone has used to enter new
markets around the world, and explain at least three of the four international,
environmental megatrends that have allowed the firm to succeed with this strategy.
To reduce issues with elevators in the construction industry, participants around the globe have
agreed to specific standards for elevators. Although there are still opportunities to create
4. Using the development of UltraRope as an example, explain how Kone’s culture
fosters invention and innovation.
Based on the story of UltraRope along with other comments in the case, it is clear that Kone has
fostered an atmosphere of autonomous strategic behavior (Figure 13.1). The organization
The UltraRope story is probably typical of how innovation works at Kone. An employee—Raimo
Pelto-Huikko, one of Kone’s in-house design specialists and an expert in carbon fiber—
explained his idea to management and persuaded them to give him a small budget for his initial
research. His idea gathered momentum, and he was joined by senior technology expert Petteri
Additional Resources
Reuters’s company profile gives in-depth background on Kone’s current financials, leadership,
valuation, news, and more:
In January 2019, Forbes published this article on Kone’s latest innovations and their effect on
the firm’s share prices:
Kone celebrated the 20th anniversary of MonoSpace with this video: