competencies needed (Bartlett, 1988, p. 4) & (Hamel, 1996, Kindle location 3098). By co-opting “the resources of other firms” KL extended their “influence and power in” their “industry” (Hamel, 1996, Kindle location 3098). KL entered into licensing agreements with “International Harvester and Bucyrus-Erie” firms which held core competencies in “wheel-loader” and “excavator technology” (Bartlett, 1988, p. 4). An additional licensing agreement was entered into with “Cummings Engine” in order for KL to gain the support of the organization in their core competency of “diesel engine development” (Bartlett, 1988, p. 4). However necessary these partnerships were they placed a restrictive presence on KL’s potential for growth as they included provisions
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5). The utilization of TQC would help the organization to realize their strategic intent – to produce high quality products. Another program focused on increasing quality of “small and medium-sized bulldozers” was called “Project A” (Bartlett, 1988, p. 5). This project pursued quality at any cost (Bartlett, 1988, p. 5). Kawai junior understood that the sustainability of the organization was based building the core competencies needed to produce a competitive grade of high quality products (Bartlett, 1988, p. 5). “Sustainable, profitable growth is not the product of a deal, it’s the product of foresight” which KL utilized to create new competencies in order to create competitive advantages (Hamel, 1996, Kindle location 70). Project A was a success as customers took notice of the new core competencies based on quality. Success was also measured by a decrease of “67%” in the occurrence of warranty claims (Bartlett, 1988, p. 5). The second phase of Project A was focused on creating core competencies resulting in “cost reductions” (Bartlett, 1988, p. 5). The second phase of the project was also a major success – in just five years KL was able to increase their share of the local market by 15% (Bartlett, 1988, p. 5). The reader must also weight this success by the fact that during this time Caterpillar had established a partnership with Mitsubishi and …show more content…
6). A strategic choice was made by KL’s leadership to mitigate the threats that developed as a result of the trending appreciation of the yen – they established a “pessimistic internal yen/dollar exchange rate of 180 for planning purposes”. This was an effective stratagem – undervaluing the yen allowing them to meet forecasts by leaving substantial room for what the yen might do (Bartlett, 1988, p. 6). This allowed them to utilize the value of the yen to their advantage as their forecasts were based on a much lower value. They would remain competitive because others were not likely doing the same. KL “was responsible for achieving a cost structure that could be profitable even at this “worst scenario” rate” (Bartlett, 1988, p. 6). This stratagem allowed KL to mitigate the risk of an unreliable currency in order to remain competitive in the global marketplace (Bartlett, 1988, p. 6). KL utilized the appreciation of the yen to create a comparative advantage as KL’s cost to produce was much lower than Caterpillar’s (Bartlett, 1988, p. 13). KL’s labor expense was 55% less and the price KL paid for steel was, on average, 28% less than the rates paid by Caterpillar (Bartlett, 1988, p.13). Access to factors of production at lower costs enabled the organization to get closer to their desired future
5). The utilization of TQC would help the organization to realize their strategic intent – to produce high quality products. Another program focused on increasing quality of “small and medium-sized bulldozers” was called “Project A” (Bartlett, 1988, p. 5). This project pursued quality at any cost (Bartlett, 1988, p. 5). Kawai junior understood that the sustainability of the organization was based building the core competencies needed to produce a competitive grade of high quality products (Bartlett, 1988, p. 5). “Sustainable, profitable growth is not the product of a deal, it’s the product of foresight” which KL utilized to create new competencies in order to create competitive advantages (Hamel, 1996, Kindle location 70). Project A was a success as customers took notice of the new core competencies based on quality. Success was also measured by a decrease of “67%” in the occurrence of warranty claims (Bartlett, 1988, p. 5). The second phase of Project A was focused on creating core competencies resulting in “cost reductions” (Bartlett, 1988, p. 5). The second phase of the project was also a major success – in just five years KL was able to increase their share of the local market by 15% (Bartlett, 1988, p. 5). The reader must also weight this success by the fact that during this time Caterpillar had established a partnership with Mitsubishi and …show more content…
6). A strategic choice was made by KL’s leadership to mitigate the threats that developed as a result of the trending appreciation of the yen – they established a “pessimistic internal yen/dollar exchange rate of 180 for planning purposes”. This was an effective stratagem – undervaluing the yen allowing them to meet forecasts by leaving substantial room for what the yen might do (Bartlett, 1988, p. 6). This allowed them to utilize the value of the yen to their advantage as their forecasts were based on a much lower value. They would remain competitive because others were not likely doing the same. KL “was responsible for achieving a cost structure that could be profitable even at this “worst scenario” rate” (Bartlett, 1988, p. 6). This stratagem allowed KL to mitigate the risk of an unreliable currency in order to remain competitive in the global marketplace (Bartlett, 1988, p. 6). KL utilized the appreciation of the yen to create a comparative advantage as KL’s cost to produce was much lower than Caterpillar’s (Bartlett, 1988, p. 13). KL’s labor expense was 55% less and the price KL paid for steel was, on average, 28% less than the rates paid by Caterpillar (Bartlett, 1988, p.13). Access to factors of production at lower costs enabled the organization to get closer to their desired future