Komatsu Case Study
Contents Executive Summary 2 Evolution and Strategic Drivers of Komatsu (EME) 3 Organizational Culture 4 Five-Force Analysis: The EME Industry: 5 SWOT Analysis 8 Resource Based Competitive Advantage 8 Financials & Future Course 9 Company on The Right Path 11 References 12
Executive Summary
Komatsu, the Japan based earth moving equipment taking on Caterpillar manufacturer has been studied by management students around the globe for years now. This story of David vs Goliath provides us an insight about the strategies followed by David in bringing down Goliath.
Komatsu’s evolution and its strategies were studied in comparison with that of Caterpillar. Responses to each other’s moves in the global
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They also launched quality upgrading programs in its factories. The program was used to reflect the Total Quality Control (TQC) concept. All personnel were expected to strive for TQC.
In 1964, the company started Project A which aimed to upgrade the quality of the small and medium-sized bulldozers. In 1972, the company launched project B which focused on exports. In 1979 the company launched Project called “F and F” which stood for “Future and Frontiers” and its objective was to develop new products and new businesses. The project encouraged suggestions from all its employees by asking them to consider both the need of society and the technical know-how of the company.
The company also began to focus more towards its Research and Development during the early 1970s. Efforts continued with some attention to basic research as well as product development. It had the distinction of introducing the world’s first radio-controlled bulldoze, amphibious bulldozer and remote-controlled underwater bulldozer.
The management decided to focus on improving the competitiveness of its products. A four- part cost reduction plan was initiated. During the same time the company also accelerated its product development program.
In 1981, they launched EPOCHS (Efficient Production Oriented Choice Specifications) whose main purpose was to allow the company to respond to the diverse market needs without compromising its cost position. Also, by the end
As we continue to move toward the end our quarterly objectives. I wanted to take the time to explain some of our costs. In our particular field of designing and manufacturing products, we are always engaging in ways that we can mitigate loss and improve our processes. Performing such changes will give a stronger presence in the market by allowing us to remain competitive.
The company is currently implementing five short term business strategies focused on delivering results that will prompt company growth in comparison to its industry and its competitors: “(1) driving a competitive top line; (2) generating margin flow-through from improved
After review the information on past and estimated in the future, company, products, competitors and branding, I recommend the following strategy:
In early 1990’s, Teradyne experienced a major change in leadership with the new CEO Alex D’Arbeloff. Alex grew interested in the risk of losing Teradyne’s competitive edge due to quality and reliability concerns. Although D’Arbeloff believed the team was exceedingly competent, he believed there were major operating problems regarding reporting and performance measurements. To minimize these problems, D’Arbeloff embraced total quality management (TQM). After 5 years of intensive effort, TQM principles were embedded into most aspects of work at the company and resulted in noticeable improvement in manufacturing quality and customer service. However, the engineering organization was resisting TQM because of the resulting late and over budget projects.
* To shorten its product line by removing some items that were not yielding much profit
They are into highly customized heat equipments & because of new competition from European & Korean companies they have changed their corporate policy, which emphasize on reducing the product variety & standardized the product. The new business policy also states of reducing the current lead time from 14 weeks to 6 weeks.
Strategic Issue: Throughout the case, it becomes clear that competition may be hindering your product from leading the market. A limited amount of compact company resources and the constant technological advancements may prevent the company from performing to the best of its capabilities. In order to address this issue, we recommend that you investigate our recommendations to increase market share by implementing the strategies that will be discussed in this memorandum.
Conversely, the strategy to serve solely to the American market, proved to be a short-lived one. As the company’s revenue started to decline by year 5 (see image), the inability of the A-Team to be price-competitive became evident. The strategy to focus solely on the American market proved to limit the A-Team’s capability of achieving economies of scales and remain price-competitive. Unfortunately, by the time this deficiency was observed, the A-Team did not have the financial resources or sufficient time to pivot its original strategy and expand geographically.
1. While sales for SAKE were good there, it was competing mainly in the high quality/
The founders’ core values is the value system that runs in the entire company for more than 175 years. They are integrity, quality, commitment and innovation. It propagates integrity through honesty, timely fulfillment of orders, enhancing shareholder value and respect and fairness among employees and associated all decision makers. Quality is delivered through good working conditions that help to bring about efficient work. Quality is delivered by fulfilling investor expectations and maintaining shareholder value and relationship among all stakeholders. Timely support and services are provided with respect to financial funding as well as product related customer queries. Commitment values are seen through customer satisfaction world over. The products of the company truly showcase innovative technology. From adding rollover protective structures and seat belts on older tractors in 1992, introducing 5000, 7000, 9000 series in tractors in 1993, to as recent as expanding into India and China with manufacturing of backhoes and
Yasin and Alavi (1999) conducted a quantitative study to determine if Total Quality Management (TQM) can produce quality improvement
New Product Development : the aggressive investment strategy into R&D division led to speed in releasing new products in the market. This gave the company higher ROI returns projections. The faster cycle of innovation led to multiple product availability in the market which led to further increasing the gap between them and the competitions and also the company indulged in manufacturing self brand products rather than Co-branded or Partnerships.
After analyzing the results from the previous quarter, it was determined that the prices set for each segment were not sufficient. Product sales priority were also not properly adjusted. With the R&D investments, sales priorities needed to be changed for the main focus to become the most profitable market segments. Prices were not competitive which in turned decreased revenue, market share, and profitability. To become more competitive we altered the prices in each market segment. The Workhorse product was the first to change, the price was lowered to $2500 in an attempt to increase sales; at this price Team 4 was still making a profit on this product, as well as making the price much more competitive. The Workhorse sales priority was also lowered to 3rd in Americas and 4th in APAC and EMEA. This product was not selling as well as we had hoped, and was no longer as profitable as it once was which led to this decision. Next, the Innovator product’s price was adjusted; this involved a price increase to $4100. This price was adjusted to include the new
The following is an attempt to analyze AT&T's use of Total Quality Management throughout its organization. Since AT&T is an elaborately enormous corporation I will focus my study to AT&T Power Systems/Lucent Technologies. This division of AT&T has been the industry standard for excellence since TQM was first introduced to the company. AT&T Power Systems has become one the world's most dynamic companies because of its use of TQM. I will provide a brief description of who AT&T Power Systems is, a description of the events that lead up to its use of TQM, AT&T's TQM philosophy, and how this philosophy was implemented. Finally I will discuss the benefits AT&T Power Systems realized through their use
It also commenced the re-organization of the business and the markets. Although, everyone had a strong belief that company needs a new launch to take it out of the situation however till mid of 2007, they had no products. Additionally, the credibility of the CEO was