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I read the book entitled "The Logic of Strategy Failure"( by Kazuhiro Mishina). The difference in corporate strategy between Caterpillar of U.S. and Komatsu of Japan was discussed in this book. We consider both as our very important clients as they are procuring volumnous quantities of filters from our company. Unlike an abstract textbook, we can well understand their corporate strategies when placed in comparison. It is very interesting and I read it seriously. First of all, from the history introduction of both companies, the offensive and defensive activities of both companies started when Caterpillar penetrated the Japanese market in 1961. Komatsu established immediately the "Maru A Campaign" headquarters as a defensive measure, that meant promoting top priority to iniatiatives for significant quality improvement. In 1963, the first " Maru A campaign" model was launched into the market, this lead to being awarded the Deming Prize for its TQC activities, and furthermore accelerated their exportation strategy. In 1980, they gained 15% of the world market shares and placing 2nd to Caterpillar. This was the time when I graduated from the university and joined Komatsu Awazu factory. The theme during that time was "Globalization" and "Ex-Construction Equipment Business". It was threafter, Komatsu built localized production around the world and in 1984 they gained 25% of the world market share. In the meantime, Caterpillar recorded the best ever business results in 1981, whose sales, however, dropped by 30% the following year in 1982 and fell into red ink for the first time after the Great Depression in 1929. The fluctuation of the exchange rate was the main cause. The U.S. Dollar appreciated by 40% from 1981 to 1984. In 1985, with a big dollar depreciation triggered by the Plaza Agreement and with thorough- going cost reduction and restructuring, Caterpillar returned to black ink in 1985. This brought employee numbers to be reduced from nearly 90,000 in 1980 to less than 54,000 in 1985 and it closed 10 plants in the 1980s. However, above actions were just first aid. Caterpillar then began its full scale fight back. While believing in the growth potential of the heavy equipment business, Caterpillar established the Strategy Planning Council , Changing it to a a decentralized business unit organization, and moved engine business to an independent business. Furthermore, it advanced to the agricultural and forestry equipment industry together with its Service Business (finance, physical distribution, secondhand dealership, ..etc). Although it is said in Japan that the '90s was the dark 10 years, Caterpillar's achievement was smoothly changing by establishing nearly 20 new plants in this period, and achieved the highest record in history in 2004 having income generated at 30.25 billion dollars gaining a profit of around 2.03 billion dollars. On the other hand, Komatsu's "Ex-C/E business" strategy was not clearly laid down, and achievements fell to a poor condition, creating a bigger difference from Caterpillar. Eventually, although it fell to red ink in 2002, with restructuring and the gaining momentum of the Chinese and American market, a V-turn was put into practice in the following year and in 2005, profits was posted at 59 billion yen with sales amount of 1430 billion yen. The problem is not with Caterpillar and Komatsu. In the past, what strategies did our company progressed and what businesses shall we develop from now, are the real serious problems we face. I think that "Dream" is important to the business strategy. It should be objective and realistic, clear and visual, and easily understood,so that everyone shall feel excited to say, "Well, let's do it!". Our business policy presentation meeting shall be done every September. With reference to the offensive and defensive battle between Caterpillar and Komatsu, I want to show our dream and vision for the future realistically and visually to everybody. I hope for your continued patronage and support for the Yamashin Filter Group. Thank you. Atsuhiko Yamazaki President Yamashin Filter Mfg. Corp. |
