KOMATSU’S STRATEGIC CHANGES

Presented By:Amritpal singh Bedi

KOMATSU AT A GLANCE

• Komatsu-established in 1921 by Tetsuya Katada.

• Initially produced mining equipments. By 1930, shifted to agricultural and military equipments

• Enjoyed the peak profits despite the low quality products.

• New leadership under Ryoichi Kawai in 1964 with the introduction of PDCA to compete against CAT.

Continued…

• 1960s saw cost slashing programs.

• 1970s focused on quality & technological advancements to surpass CAT

• 1982 - CAT surpassed and forced to be defensive.

• Nogawa-era began

• 1984 - new strategic goals set

• 1985 - crisis begins

• 1987 - Tanaka transition

• 1988 - a mark up in US prices by 7%

• 1990 - new leadership under Katada

PROBLEMS• Entry of foreign investors & quality competitors

sales dropped

• Falling demands, price wars heightened trade friction

• Cost cutting aggressive sales

• New strategic goals, faster product introduction and expansion of non-construction industrial machinery businesses.

• Unpopular autocratic management style of the President. President replaced.

• Controversial joint venture Brand image down.

• Low quality and expensive products Further drop in sales.

DATA INTERPRETATION

KOMATSU CATERPILLAR0

100

200

300

400

500

600

700

1980 19811982 19831984 19851986 19871988 19891990 1991

COMPANY DOWNFALL

19871988198919901991

-20

-15

-10

-5

0

5

10

total growth rate

total growth rate

OUR RECOMMONDATIONS

• New business ventures

• Early export decisions to counter stagnant market and currency fluctuations

• Stable top management

• No random changes in presidents and management.

• Strict quality check and proper costing

THANK YOU