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Komatsu

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Case Analysis Coach Assignment 1. Komatsu was able to evolve from a company with low-quality products to a company that became a real challenge to Caterpillar in the early 1980’s by adopting Kawai’s strategy. Kawai’s strategy was simple it was to raise the quality of the product being made and to catch up with Caterpillar. The adopted slogan to “catch up and surpass Cat” becomes instrumental in the Kawai era (1964-1982). The only way to achieve this goal is to develop a product that is on par with or better than that of Caterpillar and is sold at a better price point so they developed “Project A.” Project A started with raising the quality of the mid-sized bulldozers to that of Caterpillars quality. With doing that Kawai noticed big changes in profits. The bulldozers did cost more to be made but the warranty time on the product was able to double and the claim rates were cut to two-thirds of what it was before. This showed a major improvement in quality of the product, which led to a 15% raise in market share by 1970. Kawai constantly adopted new ideas and never settled which led to a increase in profits during his span as president of the company, Kawai’s performance with Komatsu was very good. His approach to the company was strong and had set goals. With these goals he was able to increase sales and raise the market share of the company. 2. In the mid 1980’s under Nagawa’s term as CEO performance deteriorated quickly due to the rapid decrease in the economy. Not only did the yen drop from 239 per dollar to 169 per dollar which is a 45 dollar shift the market demand for construction products decreased. The economy’s effects on construction was detrimental to the success of the company. His goals were essentially total opposite goals of that of Kawai’s

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