Caterpillar-Komatsu in 1986, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Caterpillar-Komatsu in 1986, Spanish Version
Provides an update to the global competitive interaction between Caterpillar and Komatsu described in companion cases Caterpillar Tractor and Komatsu Ltd. Caterpillar's response to Komatsu's growing market share is outlined, then the impact of rapidly changing dollar/yen exchange rates provides Caterpillar with an interesting pricing decision.
Swot Analysis of "Caterpillar-Komatsu in 1986, Spanish Version" written by Christopher A. Bartlett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Caterpillar Komatsu facing as an external strategic factors. Some of the topics covered in Caterpillar-Komatsu in 1986, Spanish Version case study are - Strategic Management Strategies, Corporate governance, Currency, International business, Manufacturing, Marketing, Pricing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Caterpillar-Komatsu in 1986, Spanish Version casestudy better are - – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing commodity prices, geopolitical disruptions, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Caterpillar-Komatsu in 1986, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Caterpillar-Komatsu in 1986, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Caterpillar Komatsu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Caterpillar Komatsu operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Caterpillar-Komatsu in 1986, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Caterpillar-Komatsu in 1986, Spanish Version case study
2. Improving business portfolio management of Caterpillar Komatsu
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Caterpillar Komatsu
Strengths Caterpillar-Komatsu in 1986, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Caterpillar Komatsu in Caterpillar-Komatsu in 1986, Spanish Version Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Caterpillar Komatsu is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Caterpillar Komatsu in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Caterpillar-Komatsu in 1986, Spanish Version Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Caterpillar Komatsu has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Caterpillar Komatsu has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Caterpillar-Komatsu in 1986, Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Caterpillar-Komatsu in 1986, Spanish Version firm has clearly differentiated products in the market place. This has enabled Caterpillar Komatsu to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Caterpillar Komatsu to invest into research and development (R&D) and innovation.
Organizational Resilience of Caterpillar Komatsu
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Caterpillar Komatsu does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Caterpillar Komatsu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Caterpillar Komatsu has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Caterpillar Komatsu in the sector have low bargaining power. Caterpillar-Komatsu in 1986, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Caterpillar Komatsu to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Caterpillar Komatsu is one of the most innovative firm in sector. Manager in Caterpillar-Komatsu in 1986, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Caterpillar Komatsu are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Caterpillar Komatsu has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Caterpillar-Komatsu in 1986, Spanish Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Caterpillar Komatsu in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Caterpillar-Komatsu in 1986, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Caterpillar-Komatsu in 1986, Spanish Version are -
Low market penetration in new markets
– Outside its home market of Caterpillar Komatsu, firm in the HBR case study Caterpillar-Komatsu in 1986, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Caterpillar Komatsu is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Caterpillar-Komatsu in 1986, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Caterpillar-Komatsu in 1986, Spanish Version, in the dynamic environment Caterpillar Komatsu has struggled to respond to the nimble upstart competition. Caterpillar Komatsu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Caterpillar Komatsu is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Caterpillar Komatsu needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Caterpillar Komatsu to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Caterpillar-Komatsu in 1986, Spanish Version, it seems that the employees of Caterpillar Komatsu don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Caterpillar Komatsu needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Caterpillar Komatsu has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher A. Bartlett suggests that, Caterpillar Komatsu is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Caterpillar Komatsu has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Caterpillar-Komatsu in 1986, Spanish Version should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Caterpillar Komatsu has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study Caterpillar-Komatsu in 1986, Spanish Version, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Caterpillar-Komatsu in 1986, Spanish Version | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Caterpillar-Komatsu in 1986, Spanish Version are -
Creating value in data economy
– The success of analytics program of Caterpillar Komatsu has opened avenues for new revenue streams for the organization in the industry. This can help Caterpillar Komatsu to build a more holistic ecosystem as suggested in the Caterpillar-Komatsu in 1986, Spanish Version case study. Caterpillar Komatsu can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Caterpillar Komatsu to increase its market reach. Caterpillar Komatsu will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Caterpillar Komatsu is facing challenges because of the dominance of functional experts in the organization. Caterpillar-Komatsu in 1986, Spanish Version case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Caterpillar Komatsu can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Caterpillar Komatsu can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Caterpillar Komatsu can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Caterpillar Komatsu can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Caterpillar Komatsu has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Caterpillar Komatsu has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Caterpillar-Komatsu in 1986, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Caterpillar Komatsu to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Caterpillar Komatsu can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Caterpillar Komatsu can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Caterpillar Komatsu in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Caterpillar Komatsu can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Caterpillar Komatsu to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Caterpillar-Komatsu in 1986, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Caterpillar-Komatsu in 1986, Spanish Version are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Caterpillar Komatsu can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Caterpillar Komatsu can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Caterpillar Komatsu demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing wage structure of Caterpillar Komatsu
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Caterpillar Komatsu.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Caterpillar Komatsu business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Caterpillar Komatsu needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Caterpillar Komatsu has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Caterpillar Komatsu needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Caterpillar Komatsu high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Caterpillar Komatsu will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Caterpillar Komatsu is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Caterpillar-Komatsu in 1986, Spanish Version, Caterpillar Komatsu may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Caterpillar-Komatsu in 1986, Spanish Version Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Caterpillar-Komatsu in 1986, Spanish Version needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Caterpillar-Komatsu in 1986, Spanish Version is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Caterpillar-Komatsu in 1986, Spanish Version is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Caterpillar-Komatsu in 1986, Spanish Version is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Caterpillar Komatsu needs to make to build a sustainable competitive advantage.
