Komatsu Limited
KOMATSU LIMITED
INTRODUCTION
The case is about two companies, Komatsu ltd. and caterpillar ltd. And how a small company like komatsu was able to compete with giants like caterpillar and was able to grow to gain number two position in the world market. CAT had suffered major financial losses during the period from 1981 through 1984, the case describes how Komatsu grew from a $170 million local manufacturer in 1963 to become CAT's major challenge in the emerging global competitive battle. The case traces the strategy followed by Komatsu in developing its product technology, manufacturing capability, and marketing skills worldwide. The supplement, Caterpillar-Komatsu in 1986, provides an update to the global competitive interaction between Caterpillar and Komatsu. Caterpillar's response to Komatsu's growing market share is outlined, and then the impact of rapidly changing dollar/yen exchange rates provides Caterpillar with an interesting pricing decision.
CHANGE IN EME INDUSTRY-:
The demand of EME got a considerable change in 1970s. Many major non recurring construction programs had been largely completed. So demand got shifted towards developing countries. But financing played a significant role there. State sector was a significant buyer. Mining industry also belonged to state sector. This contributed to surplus production and widely gyrating prices of many minerals.The world EME industry was dominated by handful of firms. Cat an US firm had 50% share in 1960 and 70s. Cat’s high point came in 1981. In 1981 there was recession in US 400 construction companies fell by a third. During same time there was huge oppurtunities in LDC’s. The competition had intensified at this time. US dollar also hurt by 40%.
ABOUT THE COMPETITORS-
• CAT (Caterpillar Tractor Co)-
Caterpillar was the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial turbines. Company was market leader in 60s and 70s because of
INTRODUCTION
The case is about two companies, Komatsu ltd. and caterpillar ltd. And how a small company like komatsu was able to compete with giants like caterpillar and was able to grow to gain number two position in the world market. CAT had suffered major financial losses during the period from 1981 through 1984, the case describes how Komatsu grew from a $170 million local manufacturer in 1963 to become CAT's major challenge in the emerging global competitive battle. The case traces the strategy followed by Komatsu in developing its product technology, manufacturing capability, and marketing skills worldwide. The supplement, Caterpillar-Komatsu in 1986, provides an update to the global competitive interaction between Caterpillar and Komatsu. Caterpillar's response to Komatsu's growing market share is outlined, and then the impact of rapidly changing dollar/yen exchange rates provides Caterpillar with an interesting pricing decision.
CHANGE IN EME INDUSTRY-:
The demand of EME got a considerable change in 1970s. Many major non recurring construction programs had been largely completed. So demand got shifted towards developing countries. But financing played a significant role there. State sector was a significant buyer. Mining industry also belonged to state sector. This contributed to surplus production and widely gyrating prices of many minerals.The world EME industry was dominated by handful of firms. Cat an US firm had 50% share in 1960 and 70s. Cat’s high point came in 1981. In 1981 there was recession in US 400 construction companies fell by a third. During same time there was huge oppurtunities in LDC’s. The competition had intensified at this time. US dollar also hurt by 40%.
ABOUT THE COMPETITORS-
• CAT (Caterpillar Tractor Co)-
Caterpillar was the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial turbines. Company was market leader in 60s and 70s because of