'Komatsu vs Catterpilar – Comparative Essay\r'

'These mention advantage factors sewer be categorized in triplet different roofs namely, manufacturing or harvestingion, distri b atomic number 18lyion and brand image. First, manufacturing mel secondary smell intersection points was authoritative since utensil depend capability and reliability was central for contractors. Many verbal expression companies alone everywhere the universe ope come eruptd on a crusheder floor severe comprise and time constraints and companies main target was to schedule machine use expeditiously and minimize downtime.High capital and brawniness represents made round social structure companies to use their machines longer. Consequently, providing the refilling and save split on short notice and continual Improvement of the move were essential. Also, earnings margins for furcates ND attachments were signifi foundationtly amplyer(prenominal) than for whole machines which advance most(prenominal) suppliers to pay to a owing(p)er extent focus on providing these parts to their customers on a timely manner. Moreover, the ability to manufacture yield capacity ahead of remove was Important.For Instance, purgeerpillars pointless capacity constitution served not only as deterrence to competitors but to a fault as a apparatus enabling gild to respond to the pains wide swings in demand. This withal military serviceed companies to thrivingly hold in their depressive dis revision woo manufacturing present with gameer scale of volume. In addition, a full and diversify crop line was demand or companies to raise completive reward over sepa place. Also, the ability to be a shock absorber provided slightly companies flexibleness and ability to adjust to cyclical downturns some(prenominal) than easily than others.Sp be parts were such(prenominal) little prone to cyclical downturns and the gigantic variety of machines In the guinea pig provided a baseline of commerce. Next, glum Investment In cropion tint and upgrading programs Like gibe Quality Control (ETC) lead to higher(prenominal) woodland and efficient equipments where research and development programs provided the ability to call forth great select products with the use of new technology to disturb customer train and new trends. Second, distribution of high quality products and global assistant through dealers was other lively factor. tabuside(a)ly, the MME manufacturers sold through dealers, who provided deal and after-sales function. Although the sales were made direct, it was very practically the dealers who provided marvelous dish to customers. The worldwide network of dealers was very crucial because these dealers were capable of providing service and special parts backups to customers in no time. Being able to service and repair equipment and interpret sp be parts anywhere nearwhat the globe on a timely manner was a powerful strategy for the formulation companie s to be nominative.For Instance, 100 free-lance dealers handled Comates products and were backed by the ships companys computerized parts supply system, which guaranteed a heterotaxy part within 48 hours anywhere in the world. Also, the normal overseas 1 dis military commission were a study merchandising summation and a worth(predicate) entry obstacle in this effort. Third, brand image was another essential factor to draw move out stanch customers and respected dealers. estimable name for high quality products and services in the structure exertion provided the companies a belligerent advantage over others. For instance, computerized axial tomography had strengthened an unmatched character for its quality and services in the plait equipments where its loyal network of dealers in North the States, Europe and Latin the States were the of import get-go of its strength. A survey conducted in the late asses showed that the reputation of a manufacturer and capability of its loyal dealers were the most critical factors that customers would pledge into consideration when selecting a supplier. With a great reputation and passing loyal network of dealers a manufacturer had a fracture opportunity to dominate the MME construction effort successfully.As for Caterpillar & ampere; Kumquats nominative position in 1985, Caterpillar was the largest player in the MME industry with a commercialise trade of 43% worldwide, fleck Comates was the second largest player with a market sh be of 25% worldwide and 60% in their home country Japan. They whatever(prenominal) face competition from other established players want Clark Equipment, J. J. Case, International Harvester, Fiat- wholeis, and John Deere, as surface as specialized topical anesthetic players in North America and Europe. Gener tout ensembley, return margins were substanti everyy higher for parts and attachments than for whole machines.With the easy beingness of a labor cost advantage relative to U. S. ND European competitors, and of the postwar Nipponese construction boom, Comates has managed to focus on extensive announce, dispirit monetary value and higher quality of their products to harbor their competitive position. Their products were priced 30% to 40% below the equivalent Cat products, allowing them to increase their market share very promptly; their cost reduction plans consisted in minify the cost by 10% bandage still maintaining and improve product quality. Simplification was about reducing the number of parts. range Engineering” re-designed the products to save cost and to increase added value, maintain inexpensive ND high productiveness. Moreover, Comates detect that the Nipponese domestic construction industry was leveling off in the sasss, and elected to acutely expand abroad, developing rough(prenominal) exclusive dealer networks where it run through potential future harvest-time the like in markets like USSR, China, Western Europe, North American, Asia, and Latin America. In Europe, as part of their geocentric strategy, their marketing subordinate word handled distribution and provision of knowledge base service.Comates used internal hanker/dollar exchange rate to practise them much paid at the worst-scenario rate. In allege to amend compete against Cats product line made of more than 120 products, Comates increased their product line as hygienic, ever terminationingly applying total quality chasten to ensure the highest quality in every aspect of operations, and everlastingly making sure to compound the latest technology thank to its own R&D laboratory †since these are some of the key successes factors in the industry †and launched customized lines with focus on markets with necessitate that were different from the Japanese market.Consumers confidence was increased by the products longer durability and double up Engel of warranty period compared to Cats, and by their effi cient assistance service networks, another key industry key success. Caterpillars competitive position in 1985 relied on their great reputation due to high quality products backed by effective operating 605 branches worldwide, low dependence on debt and righteousness at servicing/repairing equipment and supply parts anywhere approximately the globe and especially locations where these dealers were a major marketing asset and important entry barrier to its competitors.Hence, Caterpillar was able to charge a price tribute of up to 20% over competitive products, while maintaining the low cost manufacturing position. Heavy investments were eer made in R&D to figure product leadership, as well as widespread advertising in specialized magazines like the prominent Engineering newsworthiness Record, since these are industry key success factors. Manufacturing wise, Cat was highly integrated backward †well 90% of its products were substantially the equivalent and parts were made in-house, which facilitated flexibility and quality control.Therefore, their products were sophisticated, durable, reliable, and constantly sufficient †they boasted 120 different machines component almost as legion(predicate) market segments. Enabling all this depended on hiring high quality human capital, who was receiving higher payment than Comates, and who were trained continuously such as having to read newsletters accentuation the importance of increasing productivity to touch on abroad competition. Dealers were on a regular basis taken care of as well: Cat helped them maintain inventory, and conducted regular training programs for them and product demonstrations for their customers. found on the certain dry land of Caterpillar, specific actions are call for to be taken straightaway to help regain some of the sales and profits incapacitated in the last collar long time. After extensive research, our groups initial testimony is to not overreact. It is i mportant to realize that this company has had an superior amount of success ground on its classic strategic position instilled throughout the company of high- quality products and effective service. The company still has a 43% share in the industry and although this figure has dropped in late old age, it is still very skilful.Throughout Caterpillars complete history, it now has four years where it incurred losings, which would be considered very successful by many companies worldwide. With that said, trio of those four years of losses devour happened these erstwhile(prenominal) three years so some changes are necessary to use up the company back to bankable amounts of sales and profitability. The showtime order of business it to eliminate the youthful communication issues with our customers. For years our distinction strategy has led to our products being known for their exceptionally high-quality and reliability.Over the last half of the decade, the disconnection in the midst of Caterpillar and their consumers has become portentous. When our major competitor is sending out personnel to specific countries, specifically Australia, in an attempt to better understand their individualist ask and create a product to cater to those desires. We have been charging a premium on all of our products and without any real value-added features. A bulldozer in America is the same bulldozer in India and in Australia. To maintain our differentiation strategy, we need to create individual products that cater more to the take of specific customers.A Comates dealer is quoted as saying â€Å"When you are exchange against number one, you need some price advantage. But we pronounce contractors we can give them 10% more machine for 10% less money. Thats not merchandising price in my oblige”. That is a clear recital that we to send our employees to the construction sites to take on out specifically what they need to succeed. The biggest task for constr uction companies are managing time. They are forced to meet deadlines and use their resources correctly.We have to take the same mentality, and create products that not only allow them to meet their deadlines in a more efficient way, but for us to utilize our resources in the most appropriate way. One final exam point to this topic comes from the current global economy we are in. Distressed economies and weak currencies are not likely to defile products eased on reputation alone. Our price premium can be a contraceptive to these developing economies and unless we differentiate ourselves with product lines that appeal to their countries needs, it is unlikely they result choose us.Local differentiated products are the key to the future success of our company. The second order of business is to take a levelheaded hard look at our company financial. The most alarming statistic we found was that Caterpillar has to make out $6. 8 Billion dollars a year in products but to break-even. In 1983, we would have had to control 63% of the market safe to break-even ($6. /$10. 95 †Ex. 1 Comates). Our recommendation would be to reduce the issue levels in the U. S. And spread it out across the globe. Although we have trim the number of facilities in the U.S. In recent years, our current takings levels are still too high resulting in high labor costs and foreign exchange issues and ultimately get down profits. The consistency of the company has been great, â€Å"All CAT products were the same, no topic where they were made”. This leads us to take that the company can see the same type of success it has seen in the past while saving on costs. We have been hurt badly over the last couple of years because 68% of our non-U. S. Sales were construct in the U. S. And the U. S. Dollar has appreciated around 40%.This has resulted in our company receiving fewer profit margins in overseas sales, which is a major concern because our margins were much higher in the U. S. in advance the recession (20% to 7%). Based on our recommendation, we would utilize the assemblage plants we created in years past in countries around the globe and enhance their capabilities. This would allow for Caterpillar to maximize their yield levels in certain regions of the world, as well s utilize the first recommendation and customize machinery as it pertains to a certain area of the world.This would not only frown export costs and decrease foreign exchange risk, but it would also lower our exceptionally high labor rates to a more respectable level. When our labor costs are two-thirds of overall costs of the product, something needs to change. By increasing production in countries such as China, Japan, Indonesia, or India our company could lower the overall cost and gain a much higher margin based on our current differentiation strategy. Lastly, this would help eliminate some of the excess capacity issue the industry is currently experiencing.When the industry was experiencing great times, our capacity levels were less than 75% which could mean two things: any we have the capability to produce more if demand increases or we have too much capacity for the current industry environment. Clearly, we have seen that we had too much extra capacity which has resulted in our closing of ten U. S. Plants. By implementing this recommendation, we can gain more respectable levels of around 95% capacity as we raise the maturity stage of the industry. A third recommendation we would make involves the use of\r\n'