Globalization of komatsu

Globalization of KomatsuDigging Out of Trouble

Presented By

Bhooshan Kanani

Globalization of Komatsu 2

The Content

Komatsu at a Glance

Komatsu’s Business Focus

Komatsu’s Performance

Strategies for Competing in International Markets

Conclusion


Komatsu at a Glance

Komatsu Corporate Profile

Established on May 13, 1921

Headoffice located in Japan

Main Business: Manufacture and sale of construction and mining equipment, utilities, forest machines and industrial machinery

Komatsu Group consists of Komatsu Ltd., and 182 other companies, which consist of: Consolidated Subsidiaries: 146Companies accounted for by the equity method: 36

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Komatsu’s Business Focus


Komatsu’s Business FocusDomestic Focus (1921 – 1964)

1921: Started out as specialized mining equipment manufacturer

1930s: Expanded its operations into agricultural machinery & subsequently provided military equipment during world war II

1947 – 1964: shifted the emphasis towards applying new technology to civil engineering and towards manufacturing construction in Japan. Consequency: Improve Product Quality!

To support that program, in 1961: Launched a company wide quality control programme

Komatsu Domestic Focus


Komatsu’s Business FocusDomestic and Export Phase (1964 – 1982)

Management succession from Yoshinari Kawai to Ryoichi Kawai

These strategies run succesfully, proved by increasing 50% sales and 65% domestic market share

Komatsu Domestic & Export Phase

Implementation Management by Policy, which focus on these following strategic priorities: • Upgrade Product Quality by obtain international certification for Komatsu Product • Enhance Efficiency: scutinizing all aspects of production & launched “World A” campaign

Focus on export and product growth: • 1975: export 50% of sales• 1982: export 75% of sales


Komatsu’s Business FocusInternationalization (1982 ahead)

Internationalization Phase

Strategy: centralized international production facilities, cost cutting, and aggressive export sales

US economic recession & declining in construction market demand happened which led to price war

Diversification: expanding the geographic into non construction machinery production to reduce

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Net Income



Komatsu’s PerformanceNet Sales


Top 10 Market Share – Global Construction Machinery Industry


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Strategies for Competing in International Market



Five Major Reasons Why Companies Entering Foreign Markets

To gain access to new customers

To achieve lower costs through economies of scale, experience, and Increased purchasing power

To further exploit its core competency

To gain access to resources and capabilities located in foreign markets

To spread it business risk across a wider market base



Why Competing Across National Borders Makes Strategy Making More Complex

Cross-country variation in Factors that affect industry Competitiveness

Locating value chain activities for competitive advantage

The impact of government policies and economic conditions in host countries

The risks of adverse exchange rate shift

Cross-country differences in demographic cultural and market conditions



The Three Main Strategic Approach for Competing Internationally

Multi-domestic Strategy – Think Local, Act Local

Global Strategy – Think Global, Act Global

Transnational Strategy – Think Global, Act Local



The Three Main Strategic Approach for Competing Internationally

Globalization of Komatsu

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Conclusion

The Komatsu’s reasons in expanding into foreign market :

• Gain access to new customer• Achieve lower cost and enhance competitiveness• Spread business risk across wider market base

Strategic option used by Komatsu for entering International Market :

• Export Strategies• Acquisition Strategies• Alliance and Joint Venture Strategies

Strategic approach used by Komatsu : Global Strategy


Thank You

Globalization of komatsu

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