Komatsu

Harvard Business School

9-395-001
Rev. May 28, 1997

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 precariouslyperched 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 onthe 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 pursueproduction 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 aspecialized 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
Professor Christopher A. Bartlett and ResearchAssociate Robert W. Lightfoot prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. It is designed to be used in a single session with the companion (B) case (No. 395-002) or (C) case (No. 395-003). Copyright © 1994 by the President and Fellows of Harvard College. To order copies or request permission toreproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

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Komatsu Ltd. and Project G (A)

construction equipment exceeded those of its other two businesses in industrial machinery and defense equipment. In the high-demand and capital-constrained Japanese environment, Komatsu held a market share of more than 50%, despite the low quality of its equipmentat that time. This comfortable situation changed in 1963 when, after the government decided to open the industry to foreign investors, Cat announced it would enter the market in partnership with Mitsubishi. At this time, Komatsu had sales of $168 million and a product line well below world standards. Local analysts predicted three years of struggle before Cat bankrupted the puny, local company....