KOMATSU LTD.

CASE ANALYSIS:
ASWIN NAMBURI / PGDM2/1509.
COMPANY STATUS:
Komatsu Company was established with a specialised producer of
mining in 1921.
It expanded to agriculture machinery in 1930s and also production
of military equipment during Second World War.
Further developed to expand into earth-moving equipment needed
for post war reconstruction.
Later, sales of construction equipment exceeded its two other
businesses in industrial machinery and defence equipment.
Komatsu held a market share of > 50% in high demand & capital-
constrained Japanese environment with a sales of $168 million.
After the entry of CAT with partnership of MITSUBHISHI
everything has changed after 1963 due to government decision.

COMPANY EVOLUTION DURING YEARS:

Kawai Era (1964-1982): Emergence and Expansion
Ryoichi Kawai assumed the presidency of Komatsu (from father)
in 1964.

Strategy TQC (total quality control), company has to be

innovative, the basic value of target must be clarified so that all
the staff members can fully understand what the company is
aiming and their purpose of management of policy system.

Management - Rise the quality of company to middle sized

bulldozers to CAT level Double its warranty period with in two
years and cut down rates by two-third.

Result the market share was increased by 50% to 65%

THE NOGAWA ERA (1982-1987): Struggle and Turmoil

Guided the organisation for 18 years with extra-ordinary growth

and handed over the leadership to SHOJI NOGAWA in 1982.
 Strategy
NOGAWA depend on changing traditional policies including
company reliance on highly efficient, centralized, global production
facility.
Faster product introduction, and expansion of non-construction
industrial machinery business.

Management -
He focus more on cost cutting and aggressive sale tactics than
on shifting production overseas or reducing company dependence
on the stagnating construction industry.
He decided to use asset more efficiently expanded company
product line and laid emphasis on testing activities.
He also opened two overseas plants at CHATTANOOGA and
UNITED KINGDOM.

Result
As by these changes condition worsened and external
pressure increased.

THE TANAKA TRANSITION (1987-1989): Studying the ship

Strategy-
Restoring order to domestic market place, have to respond
quickly to domestic market rather for large strategic goal of
internationalization and product diversification.

Management-
Tanaka ended the practice of price discounting and high
pressure sales, If condition go worse they will reduce production
rather than to go on price war.
Tanaka also establish autonomous bases with headquarters
in JAPAN, UNITED STATES, and EUROPE.

Result-
Due to the changes the market was stabilized.

THE KATADA ERA (1990S):

Strategy-
A new culture, a new direction-
 He said Idea (or) Concept should be fully understood before
proceeding Thrusts: Growth, Global, Group-wide, Or Three Gs.
New Initiatives Project G (The Organization Committed Itself to
Return To growth).

Results-
By the mid-1990s the Non-construction Part of Komatsu
Would Account For 50% of Sales.
Referring To the Company Not as a Construction Equipment
Manufacturer.
The New Project G Plan and the Vision That Provided Its
Inspiration Generated both Excitement and Apprehension within
Komatsu.