Recommendations of Caterpillar-Komatsu In 1986 Case Help

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Recommendations of Caterpillar-Komatsu In 1986 Case Study Solution

On the basis of above internal and external analysis of the business along with the evaluation of different options, the business is advised to consider alternative 3. As alternative 3 would enable the business to broaden in global markets without any reduction in its local profits and any degeneration of its market position. The company could pursue alternative 1 which would make it possible for the business to focus on prospective worldwide markets rather than the regional markets however as the business is extremely dependent on the local markets with 90% of its stores in the United States, there fore pursuing option 1 would result in the substantial decline in company's profits.

Aletrnative-1: Expanding International Brick and Recommendations of Caterpillar-Komatsu In 1986 Case Analysis Stores

Expansion towards global markets through opening new shops in other Europe and Asian countries with closing domestic shops is although a good alternative for increasing the global presence of the company. Nevertheless, the closing of domestic shops might highly impact the incomes of the firm as above 90% of its shops are located locally and closing those stores would ultimately decrease the profits of the company. The company has a long term market position in US which can not be generated soon in the brand-new markets. The alternative would help the business to expand in worldwide markets in addition to the removal of problems raised in its regional markets connected to its diversity. The benefits and drawbacks for Alternative 1 are noted below;

Pros:

• Exploration of brand-new worldwide markets.
• Boost in income from worldwide markets.
• Removal of problems associated with variety.
• Income diversification.
• Step towards being a strong global brand.

Cons:

• Loss of comprehensive earnings from the regional markets.
• Boost in competition.
• Distinctions in cultures might resulted in a failure of the brand name particularly in Asian countries.
• Low incomes at preliminary levels.
• Boost in marketing expenditures to gain market share.

Alternative-2: Introduction of Click and Recommendations of Caterpillar-Komatsu In 1986 Case Help Stores

With the increased patterns towards online shopping, the online shops like Amazon, Alibaba and so on might present a severe threat to the market share of business. In this circumstance the business might think about presenting Click and Recommendations of Caterpillar-Komatsu In 1986 Case Solution stores. These shops with a low requirement of funds to settle would allow the business to reach international markets, without ending its domestic stores.

Pros:

• Low financial investment
• Lowering competitors danger
• Access to the world markets
• Enlarging customer base
• Easy to manage
• Large Incomes
• Low Operating Costs
• Easy brand-new market entrance

Cons:

• Hazard to the market position
• Elimination of brand name Individuality
• Elimination of the fantastic shop experience.
• Threat of decline in elite sales.

Alternative-3: Expansion towards International Markets Without closing Domestic Stores

Another alternative that the company might consider, is to expand towards the worldwide markets without closing its domestic shops that adds to the huge part of earnings of the business. The benefits and drawbacks related to Alternative 3 are offered listed below;

Pros:

• Reducing competitors risk
• Access to the world markets
• Increasing the size of customer base
• Large Incomes
• Expedition of brand-new international markets.
• Increase in income from worldwide markets.
• Earnings diversification.
• Action towards being a strong international brand name.

Cons:

• Continuation of concerns associated with variety.
• Distinctions in cultures might resulted in a failure of the brand particularly in Asian countries.
• Low revenues at initial levels.
• Increase in marketing expenses to acquire market share.



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