Komatsu Limited Harvard Case Solution & Analysis


Komatsu Limited was founded in 1921 by Mr. Takeuchi in Japan. The company is involved in manufacturing the diverse nature of products such as solar batteries, industrial robots, diesel engines and machine tools. The main purpose of the company is to maintain the exports of the company at the highest levels. The company manufactured various successful products in its early stages and during the Second World War, Komatsu is recognized as the most important producers of weapons.However, after the World War II the company faced severe complaints regarding the quality of its products, the dealers werefinding it very difficult to sell the products of Komatsu. To cope with these issues the company setup its own distribution centers.

Komatsu acquired various subsidiaries to gain economies of scale and to increase the quality of its products after the World War II. The company also adopted Total Quality management strategy in order to increase the quality of the products and to form better relationship with its employees. Adopting the Total Quality Management technique resulted in the increase in the turnover drastically. The initial stages of TQM resulted in the reduction in the warranty claims and it also improved the general perception about the qualities of products of Komatsu. The main competitor of the Komatsu is the Caterpillar Tractor Company (CAT) which enjoys the majority of the market share of the industry worldwide. However, the increased competition in the industry results in the decrease in the revenue and market share of CAT.In 1963, CAT and Mitsubishi enter into strategic alliance to increase the market share and to reduce the level of competition in the industry.

Komatsu Limited Harvard Case Solution & Analysis

Key Management:

Yashinari Kawai and his son Ryoichi Kawai along with the senior management of Komatsu appears to be the key management of the company. The father, Kawai was very ambitious regarding the growth of the company and his son is also enthusiastic about the future growth of the company. Ryoichi Kawai is very humble as well, he spent a lot of his time on the factory floor with the workers, and he is regarded as a workaholic person and often tours other countries to expand the operations. The senior management is also very honest with the company, they conduct their work in accordance with the best practices which will be most beneficial for Komatsu. General employees which carry the operations of the Komatsu can also be considered as a key factor for the success of the organization because if they are not motivated and committed to perform, the success of Komatsu can be threatened.

Competitive Situation:

The situation in the industry in which Komatsu is performing is worst in terms of competition. The general prices of the products of the Komatsu are declining, number of players in the market are increasing and the regular innovation in the products is also threatenedby other companies in the industry. The management of Komatsu is committed to take every possible step to capture the market share of CAT on the other hand the CAT has also agreed to take every possible action to steal the market share of Komatsu........................

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