KOMATSU LTD.

AND PROJECT G

Komatsu ltd. was established in 1921 as a specialized producer of mining equipment. It expanded into agricultural
machinery during 1930’s and during second world war, into the production of military equipment.

Main Points To Highlight-

The company’s heavy machinery expertise positioned it well to expand its worth moving equipment needed for post war
re-construction. Sales of the company exceeded, it held a share of more than 50% of market share despite its low quality
equipment.

Emergence and Expansion – The Kawai Era

Mr. Ryoichi kawai took over the presidency of company in 1964. His strategy was to acquire and develop advanced tech.
to raise the quality and efficiency level of the company. His strategy was to focus management on strategic priorities. He
developed “Plan, Do, Check, Act” cycle to ensure the constant progress towards objectives.

He launched Project A in order to double its warranty period within 2 years by cutting rates by 2/3rd. It increased
company’s market share from 50% to 65% (1970). He launched project B & C & D to improve reliability and durability in
large bulldozers, pay loaders & shovels & hydraulic excavators. By early 1980s, co. has emerged as major challenger in
construction equipment industry.

Struggle & Turmoil – The Nogawa Era

Mr. Shoji Nogawa took over presidency of co. in 1982. He had high expectations of his managers and drove them hard to
meet those expectations. He focused more on cutting cost & aggressive sales tactics. He made capital investments to cut
costs, launched campaigns to use assets more effectively, expanded company’s product line & boosted research * testing
activities. He introduced new strategic goalsin 1984, including fastest product introduction & expansion of non-
construction industrial machinery businesses.

Steadying the ship – The Tanaka Transition

In June 1989, Mr. Katada over took the company. He was quite & cool headed commander. He spoke freely and honestly
with his superiors and subordinates. He invited a spectrum of managers to help shaping company’s mission. He launched
Project G, which focused on helping the company return back to growth. He announced plans to triple company’s capital
investment in construction equipment & challenged managers to deve3lop the proposal.