HarshadaHemangini Sonali Varsha KedarBhooshan

 MNC company which designs, manufactures and markets the product - EME and Engines for earthmoving and construction machines.  Strong 53 percent market share worldwide  Nearly 60 percent of sales was from overseas  Parts represented nearly 35 percent of their total revenue  33 manufacturing plants with 22 in US  Strong dealer network and support

 EME represented 70% of sales and $8.6 billion sales was achieved by CAT in 1981  EME was represented by 60 percent in Construction and 30 percent in Mining and 10 percent by Forestry  Komatsu, a Japanese company was upcoming competition to CAT  Decision for buying EME was dependent on manufacturer’s reputation, machine performance and dealer capability

 Negotiation with UWA for triennial contract  Effect of low sales due to higher interest rates  Growing competitive environment  To find answer to the benefits lost after bitter 1979 strike  Strengthening of US currency  Global debit crisis and severe liquidity crunch  Under – utilization of capacity  High labor and overhead costs

 Buy back offer of CAT machines after 5 years  Complete Sales and Service contract to be offered by the dealers  To handle dollar fluctuation, multiple currency billing to be introduced  Renting out of machines directly  Contract employee strategy  Strong inventory control  Reduce manufacturing and R&D costs

 Target agricultural and allied industry  More joint venture in European and Australian market  Target complete utilization of plant – if needed stop other plants or relocate to emerging markets  Turbine engines manufactured at solar turbines can be sold to aircraft manufacturers as a diversification  Acquisition of non performing competitors