Komatsu Ltd and Project G

Acquired and develop advanced technology to raise quality, and to increase efficiency to the Cat’s level. Introduced “management by policy.  “Project A,” sought to raise the quality of Komatsu’s middle-sized bulldozers to Cat’s level & instituted the “Plan, Do, Check, Act” (PDCA) cycle. In 1966, his five-year “World A” campaign sought to make Komatsu internationally competitive in cost and quality. Results Project A enabled Komatsu to double its warranty period within two years while cutting claim rates by two-thirds.

Komatsu had emerged as the major challenger in the construction equipment industry.

Komatsu’s potentially dangerous reliance on domestic sales reduced. The Nogawa Era (1982-1987) Strategies Focused more on cost-cutting and aggressive sales tactics than on shifting production overseas or reducing Komatsu’s dependence on the stagnating construction industry. Made extensive capital investments to cut costs, launched a campaign to use assets more efficiently boosted research and testing activities. Short-term strategy - raising prices abroad, expanding overseas parts procurement, and cutting production costs.

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Medium-term strategy - developed more marketable construction equipment products through increased R&D spending and capital investments in manufacturing facilities. Long-term - he told, “Komatsu is gearing itself toward new business areas of high-growth potential. ” Internationalization : Establishment of two important overseas plants Chattanooga, Tennessee, Birtley, United Kingdom. Results Reduction in overall sales because of falling demand, worldwide price wars, a rapidly appreciating yen. Nogawa’s apparent resistance to faster and more dramatic change, and his unpopular autocratic management style eventually resulted in his replacement.

The Tanaka Era (1987-1989) Strategies Tanaka ended the practices of price discounting and high-pressure sales.

Framed goals of internationalization and product diversification & pushed the company toward regionalizing production in Europe and the United States. Started Market Exposure. Results It began sourcing mini-excavators for the European market from the Italy, dump trucks from Brown (U. K. ) and vibratory rollers from ABG Werke (Germany) marketing them around the world under its own name. Imported backhoe loaders from Italy into Japan.

Entered into a 50/50 joint venture with Dresser, the American oil services company. Komatsu’s market share fell from 35% to 31%. Katada Era Strategies Gave New Direction, New Culture to the company. Stimulated new initiatives. Challenged the organization with a new slogan, “Growth, Global, Groupwide”. Launched Project – G : the organization committed itself to return to growth. Encouraged his organization to grow the nonconstruction part of business aggressively that would position it well in three growth segments—electronics, robotics and plastics. Results

Organization was now redefined as “a global and compound high-tech organization that integrates hardware and software as systems. ” SWOT Analysis Strength Ability to quickly react to situations. Implementation of plans & their execution. Weakness Belated in Internationalization. Relying more on domestic market. Opportunities Exploring new horizons & expanding their arms in other countries. Eyeing their business into new sectors. Threat Throat-cut competition from its rival competitors. Dependence on stagnating Construction industry. Fall in market share.