Identify the strengths and weaknesses of Komatsu and Caterpillar's other major competitors. One of the major strengths of Komatsu is the fact that the company has been able to maintain a better relationship with blue- collar workers in its North American factories. In addition, its per- unit labor costs are lower than Caterpillars. Komatsu enjoys a strong brand presence and its logo is recognized the worldover as a sign of quality, innovation and service. Sika has a high degree of brand awareness particularly as a logo. This has enabled the company to place high value on consistent and standardized use of the logo. Customers are ensured of receiving high quality and service wherever the Sika logo appears. The Sika brand as well as 614 additional trademarks such as Sikaflex, Sika ViscoCrete or SikaBond provide a market advantage to the company. The strong brand-image of the company enables it to distinguish the product from its competitors. In addition, the company’s brand lends its products a positive value perception and retains the confidence of its customer High Dependency on Construction Segment The company is generating a major part of its revenues from the construction segment. This segment accounted for 80% of total revenue of the company in year 2008.. The company’s high dependency on construction segment may expose it to business risk. If the demand for the products and services of the segment decline, then the revenues of the company may be adversely affected. Poor Operating Margin
During the fiscal year 2008, Sika recorded a poor operational performance. The operating profit of the company was CHF 422.0 million during the fiscal year 2008, a decrease of 17.4% over 2007. The operating margin declined from 11.1% in 2007 to 9.1% in 2008. The decline in operating margin was due to increase in operating expenses by 3.5%. Further, the massive, short-term increase in raw material prices affected the profitability. The poor operational performance reveals the...
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