Komatsu

IB CASE STUDY ANALYSIS

Topic: Komatsu

[Sec-C] Team No:6 members: Shyamsundar R (152) Shruti shah (151) Siddhartha Singh (153) Sarah Joseph (139)

INTRODUCTION:

This report examines the competitive strategy that needs to be adopted by Komatsu to continue its impressive performance over the years, along with its internal management policies. We have done an industry level analysis, we have used Michael Porter’s Five Forces Model for competitor analysis to analyse the competitive edge of Komatsu over its rival firms. We have also discussed the key management issues of the organization, across the spheres of Functional Departments over the time frame. We have done a detailed analysis of current strategy being followed by various divisions of Komatsu and came out with few issues which need immediate attention in terms of strategy formulation and suggested few strategies to be adopted to fix those identified issues. We have concluded the report by providing an overall strategy to be adopted by Komatsu and Recommendations, based on our understanding of the case. All these recommendations are to either address existing issues faced by Komatsu, or to enhance its operations to make it more profitable and have a sustainable growth and also to compete with market leader Caterpillar.

Industry Level Analysis:

According to the case the industry is highly concentrated, with the 50 largest companies holding more than 80% of the market. The industry is unstable (currently, as mentioned in the case) because of multiple factors like the 12% downturn in the US construction industry in 1979 , poor forecasts for the next few years ,At the same time there was an uncertain economic environment in LDC’s like low commodity prices, problem associated with debt servicing and recession . While price rises have been significant over the past few years the net industry position has dipped into negative figures. But even though the US market continues to fall as a proportion of the...