Komatsu LTD. and Project G case

Komatsu LTD. and Project G case

1
Komatsu Ltd. and Project G (A)
On a breezy spring day in 1991, passers-by on the bustling street in front of Komatsu’s world
headquarters stopped, pointed, and stared at the spectacle atop the building. Ten stories above,
workers were dismantling one of central Tokyo’s most notable landmarks—a giant, yellow Komatsu
bulldozer precariously perched on a tall pole. For 25 years, this corporate icon had symbolized
Komatsu’s overriding strategic aim to become the world’s premier construction equipment
manufacturer. Inside the Komatsu offices, the objective was more explicitly expressed in the oftrepeated
mantra, “to catch up with and surpass Caterpillar [Cat].”
President Tetsuya Katada and company workers watched, too, reflecting on the significance
of the move. Katada and the directors and employee representatives on the so-called “Committee for
the 1990s” had carefully timed the removal of this corporate symbol to mark recent changes in the
company in preparation for Komatsu’s spring celebration of its 70th anniversary. Soon, a new
electronic beacon would flash Komatsu’s new logo and new corporate slogan (“The Earth Company,
Unlimited”), confirming the changes in strategy and management practices that Mr. Katada and the
two management committees had started to implement.
President Katada explained the significance of these symbolic changes:
Pulling down the bulldozer is just one example showing the strong
determination of the president to outsiders and, more importantly, employees that
we can’t single-mindedly pursue production of the bulldozer. . . . Instead, we have
challenged the organization with a new slogan, “Growth, Global, Groupwide”—or
“the Three G’s” for short. It’s a much more abstract challenge than one focused on
catching and beating Cat, but I hope it will stimulate people to think and discuss
creatively what Komatsu can be.
Komatsu Company and Management History
Established in 1921 as a specialized producer of mining equipment, Komatsu expanded into
agricultural machinery during the 1930s and, during the Second World War, into the production of
military equipment. The heavy-machinery expertise the company developed positioned it well to
expand into earth-moving equipment needed for postwar reconstruction. Soon, Komatsu’s sales of
This case is for use only with the Harvard Business Publishing ‘Case Analysis Coach’
395-001 Komatsu Ltd. and Project G (A)

Some examples of possible Assignment Questions for the Komatsu case.

1. How was Komatsu able to evolve from a $169 million company with low-quality products to become a
real challenge to Caterpillar by the early 1980s? How would you evaluate Mr. Kawai’s performance?
2. Why did performance deteriorate so rapidly in the mid-1980s? What grade would you give to Mr.
Nogawa’s term as CEO?

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