Strategy Digest - 2014 - Strategies, Plans, Strategic Priorities & Analysis on World's 10 Leading Construction Equipment Manufacturers - Caterpillar, Komatsu, Volvo, Hitachi, Sany, CNH, John Deere, Sandvik, Terex, Kubota
Overview & Rationale:
The report is a comprehensive strategy digest that provides detailed analysis & strategic insights into the strategies, plans & strategic priorities of these 10 leading global construction equipment manufacturers going forward into 2014 amid a difficult global macroeconomic environment marked by slow pace of ongoing recovery in Western Europe from the debt crisis and a multitude of economic challenges in the United States. The EU economy finally made an egress from red by registering a 0.3% GDP growth for Q2 2013 while the U.S. economy registered a decent 2.5% GDP growth for Q2. The growth projections for the second half of 2013 indicate towards a sub 2% GDP growth with the U.S. economy facing a host of fiscal & monetary policy challenges amid ongoing political tussle amongst the Republicans & the Democrats over handling of fiscal matters & Fed’s indications towards tightening measures fomenting further uncertainty regarding the overall fiscal & monetary policy stance.
Global Construction Equipment Industry on an Uphill Trajectory amid Continued Weakness & Uncertainty in Global Economy:
The global construction equipment industry has been on an uphill trajectory of-late after having been through the roller coaster ride over the years driven, primarily, by the rapid Chinese economic growth over the 2002-2012 decade with the commensurate rise of China as the world’s largest & most strategically significant construction market. The industry, however, has been combating significant pressures with the growth rate in 2012 limited to a low, single digit value amid a difficult & uncertain macroeconomic environment in the western hemisphere and the continued weakness in Chinese market with the economy treading on the recovery path fastidiously after the country’s long bid to contain inflationary pressures through a host of monetary policy measures. The spurt in economic growth in China during Q3 with a mostly investment driven 7.5% GDP growth has been a much needed change ensued by a difficult outlook for 2014 with shooting inflation level and the currency being on a 20 year high that is likely to bring monetary policy measures to forefront over near term.
Additionally, sporadic fluctuations in global currency exchange rates have been putting significant pressure on profitability across OEMs. The magnitude of impact of the strengthening of Swedish Krona on Volvo’s profits has been to the tune of SEK 1 billion during Q3 2013 while weakening of Japanese Yen against the USD eroded Caterpillar’s profitability by $181 million during Q3 2013.
Industry’s Long-Haul to Recovery Spearheaded by Strong U.S. Housing Starts in 2013:
Most global OEMs are facing pressure on revenues & profitability amid difficult global macroeconomic conditions with continued, weak demand & activity in Europe & China further compounded by the ongoing slump in mining activity that has impacted profitability by altering the product sales mix across OEMs. The industry leader, Caterpillar saw topline declining by $11 billion for the first 3 quarters of the year with its resource industries segment registering a 75% contraction with low demand for mining equipment.
The industry & macro-environmental developments indicate towards tough projections for 2013 with the industry growth projected to stay flat at best and contract by 5%-10% at worst in 2013. In the U.S., housing starts have been encouraging so far in 2013 compensating well for the dip in non-residential public construction activity coupled with the Fed’s intent to keep short term credit rates artificially low through 2014, which augurs well for the industry. The U.S. housing starts are likely to touch 1 million in 2013 while the projections for 2014 indicate towards the 1.18 million mark. The strong housing starts & modest non-residential construction activity are likely to drive replacement demand in North America and partially offset continued weakness in Europe & China.
Most Key, Global Markets to Stay Flat in 2013 with Improved Projections for 2014:
Most key, global markets are likely to stay flat for the year 2013 led by Europe where the market is expected to contract in the 5%-15% range after registering a 8% decline for the first 8 months and showing early signs of resurgence. The North American market, on the other hand, has been flat through August 2013 and is projected to be in the -5% to +5% range for the year 2013. The Chinese market contracted by 4% through the first 8 months of 2013 despite a strong 10% growth in Q3 driven mostly by fiscal measures with infrastructure related investments that drove the strong 7.5% economic growth for Q3. Going forward into 2014, the global construction equipment market is likely to recover further led by China which is projected to register a positive, single digit growth rate followed by North America & Europe which are likely to register a low, single digit growth rate at best or contract by upto 5% at worst.
Strong, Long-Term Industry Fundamentals:
The industry fundamentals, however, remain solid and the long-term industry growth prospects still appear robust, driven, primarily, by the significant anticipated investments likely to be made towards infrastructure repair & rebuilding across traditional markets, especially, in the United States and rapid infrastructure development required across emerging markets to sustain economic growth & rapid urbanization trends.
OEMs Fine-Tune Strategies in-sync with Emerging Trends:
Most leading industry OEMs, however, are working towards rationalizing & optimizing their overall cost base & industrial footprint with competitiveness becoming critical while continuing with their strong R&D focus directed at the development of new product platforms, engines and a range of sustainable, alternate fuel based powertrains and other cutting-edge, innovative technologies delivering enhanced & superior performance features as well as optimized operating economics through further integration of a range of ICT technologies as indicated by Komatsu’s expansion of its KOMTRAX offering and development of full autonomous capabilities for select equipment.
Against this backdrop, the report analyzes the strategies, plans & strategic priorities of these 10 leading global construction equipment manufacturers against a difficult, uncertain & complex global macroeconomic environment & conditions.
Key Strategies & Plans included in the Report for each OEM:
1. Product Portfolio Strategies & Plans
2. Market Specific Strategies & Plans - Traditional & Emerging Markets
3. R&D Strategies & Plans
4. Growth Strategies & Plans
5. Business and Corporate Strategies & Plans
6. Sales & Marketing Strategies & Plans
7. Production/Manufacturing Strategies & Plans
8. Strategies & Plans to optimize overall Cost Base and Industrial Footprint
9. Strategies to offset Global Currency Exchange Rate Fluctuations
Relevance & Usefulness:
The report would be useful for:
The report would be essential for those having strategic interest in the Global Construction Equipment industry or any of these companies & will be especially useful for Key Decision-Makers, Top Management of Companies, OEMs, Suppliers, Distributors, Vendors and other Key Players in the Industry Value Chain as well as existing & potential Investors, Industry & Company Analysts & those associated with the Industry or any of these Companies.
Highlight:
The report is comprehensive yet concise & compact at the same time; is custom-built for meetings & presentations, being built on the Microsoft PowerPoint platform; in addition, to being a ready self-reckoner as well as a quick reference guide driving, enabling & ensuring prompt and informed decision making.
The report is a comprehensive strategy digest that provides detailed analysis & strategic insights into the strategies, plans & strategic priorities of these 10 leading global construction equipment manufacturers going forward into 2014 amid a difficult global macroeconomic environment marked by slow pace of ongoing recovery in Western Europe from the debt crisis and a multitude of economic challenges in the United States. The EU economy finally made an egress from red by registering a 0.3% GDP growth for Q2 2013 while the U.S. economy registered a decent 2.5% GDP growth for Q2. The growth projections for the second half of 2013 indicate towards a sub 2% GDP growth with the U.S. economy facing a host of fiscal & monetary policy challenges amid ongoing political tussle amongst the Republicans & the Democrats over handling of fiscal matters & Fed’s indications towards tightening measures fomenting further uncertainty regarding the overall fiscal & monetary policy stance.
Global Construction Equipment Industry on an Uphill Trajectory amid Continued Weakness & Uncertainty in Global Economy:
The global construction equipment industry has been on an uphill trajectory of-late after having been through the roller coaster ride over the years driven, primarily, by the rapid Chinese economic growth over the 2002-2012 decade with the commensurate rise of China as the world’s largest & most strategically significant construction market. The industry, however, has been combating significant pressures with the growth rate in 2012 limited to a low, single digit value amid a difficult & uncertain macroeconomic environment in the western hemisphere and the continued weakness in Chinese market with the economy treading on the recovery path fastidiously after the country’s long bid to contain inflationary pressures through a host of monetary policy measures. The spurt in economic growth in China during Q3 with a mostly investment driven 7.5% GDP growth has been a much needed change ensued by a difficult outlook for 2014 with shooting inflation level and the currency being on a 20 year high that is likely to bring monetary policy measures to forefront over near term.
Additionally, sporadic fluctuations in global currency exchange rates have been putting significant pressure on profitability across OEMs. The magnitude of impact of the strengthening of Swedish Krona on Volvo’s profits has been to the tune of SEK 1 billion during Q3 2013 while weakening of Japanese Yen against the USD eroded Caterpillar’s profitability by $181 million during Q3 2013.
Industry’s Long-Haul to Recovery Spearheaded by Strong U.S. Housing Starts in 2013:
Most global OEMs are facing pressure on revenues & profitability amid difficult global macroeconomic conditions with continued, weak demand & activity in Europe & China further compounded by the ongoing slump in mining activity that has impacted profitability by altering the product sales mix across OEMs. The industry leader, Caterpillar saw topline declining by $11 billion for the first 3 quarters of the year with its resource industries segment registering a 75% contraction with low demand for mining equipment.
The industry & macro-environmental developments indicate towards tough projections for 2013 with the industry growth projected to stay flat at best and contract by 5%-10% at worst in 2013. In the U.S., housing starts have been encouraging so far in 2013 compensating well for the dip in non-residential public construction activity coupled with the Fed’s intent to keep short term credit rates artificially low through 2014, which augurs well for the industry. The U.S. housing starts are likely to touch 1 million in 2013 while the projections for 2014 indicate towards the 1.18 million mark. The strong housing starts & modest non-residential construction activity are likely to drive replacement demand in North America and partially offset continued weakness in Europe & China.
Most Key, Global Markets to Stay Flat in 2013 with Improved Projections for 2014:
Most key, global markets are likely to stay flat for the year 2013 led by Europe where the market is expected to contract in the 5%-15% range after registering a 8% decline for the first 8 months and showing early signs of resurgence. The North American market, on the other hand, has been flat through August 2013 and is projected to be in the -5% to +5% range for the year 2013. The Chinese market contracted by 4% through the first 8 months of 2013 despite a strong 10% growth in Q3 driven mostly by fiscal measures with infrastructure related investments that drove the strong 7.5% economic growth for Q3. Going forward into 2014, the global construction equipment market is likely to recover further led by China which is projected to register a positive, single digit growth rate followed by North America & Europe which are likely to register a low, single digit growth rate at best or contract by upto 5% at worst.
Strong, Long-Term Industry Fundamentals:
The industry fundamentals, however, remain solid and the long-term industry growth prospects still appear robust, driven, primarily, by the significant anticipated investments likely to be made towards infrastructure repair & rebuilding across traditional markets, especially, in the United States and rapid infrastructure development required across emerging markets to sustain economic growth & rapid urbanization trends.
OEMs Fine-Tune Strategies in-sync with Emerging Trends:
Most leading industry OEMs, however, are working towards rationalizing & optimizing their overall cost base & industrial footprint with competitiveness becoming critical while continuing with their strong R&D focus directed at the development of new product platforms, engines and a range of sustainable, alternate fuel based powertrains and other cutting-edge, innovative technologies delivering enhanced & superior performance features as well as optimized operating economics through further integration of a range of ICT technologies as indicated by Komatsu’s expansion of its KOMTRAX offering and development of full autonomous capabilities for select equipment.
Against this backdrop, the report analyzes the strategies, plans & strategic priorities of these 10 leading global construction equipment manufacturers against a difficult, uncertain & complex global macroeconomic environment & conditions.
Key Strategies & Plans included in the Report for each OEM:
1. Product Portfolio Strategies & Plans
2. Market Specific Strategies & Plans - Traditional & Emerging Markets
3. R&D Strategies & Plans
4. Growth Strategies & Plans
5. Business and Corporate Strategies & Plans
6. Sales & Marketing Strategies & Plans
7. Production/Manufacturing Strategies & Plans
8. Strategies & Plans to optimize overall Cost Base and Industrial Footprint
9. Strategies to offset Global Currency Exchange Rate Fluctuations
Relevance & Usefulness:
The report would be useful for:
- Annual Strategy Reviews
- Competitive Strategy Analysis & Assessment
- Internal Strategic Assessment
- Annual Strategic Planning Process
- For Potential Strategic Changes, Adjustments & Realignment
The report would be essential for those having strategic interest in the Global Construction Equipment industry or any of these companies & will be especially useful for Key Decision-Makers, Top Management of Companies, OEMs, Suppliers, Distributors, Vendors and other Key Players in the Industry Value Chain as well as existing & potential Investors, Industry & Company Analysts & those associated with the Industry or any of these Companies.
Highlight:
The report is comprehensive yet concise & compact at the same time; is custom-built for meetings & presentations, being built on the Microsoft PowerPoint platform; in addition, to being a ready self-reckoner as well as a quick reference guide driving, enabling & ensuring prompt and informed decision making.
SECTION – 1
Key Strategies, Plans & Strategic Priorities - For each of the 10 leading Construction Equipment Manufacturers
1. Product portfolio strategies & plans
2. Market specific strategies & plans - traditional & emerging markets
3. R&D strategies & plans
4. Growth strategies & plans
5. Business and corporate strategies & plans
6. Sales & marketing strategies & plans
7. Production/manufacturing strategies & plans
8. Strategies & plans to optimize overall cost base and industrial footprint
9. Strategies to offset global currency exchange rate fluctuations
SECTION – 2
Global Construction Equipment Industry Force Field Analysis
Driving Forces
Restraining Forces
SECTION – 3
Strategic Market Outlook - 2014
North America
Western Europe
BRIC Markets
SECTION – 4
Strategic Business Outlook for each OEM for 2014
SECTION - 5
Key Industry Trends
SECTION - 6
Key Issues, Challenges & Risk Factors
SECTION - 7
Strategic Industry Outlook for 2014
Key Strategies, Plans & Strategic Priorities - For each of the 10 leading Construction Equipment Manufacturers
1. Product portfolio strategies & plans
2. Market specific strategies & plans - traditional & emerging markets
3. R&D strategies & plans
4. Growth strategies & plans
5. Business and corporate strategies & plans
6. Sales & marketing strategies & plans
7. Production/manufacturing strategies & plans
8. Strategies & plans to optimize overall cost base and industrial footprint
9. Strategies to offset global currency exchange rate fluctuations
SECTION – 2
Global Construction Equipment Industry Force Field Analysis
Driving Forces
Restraining Forces
SECTION – 3
Strategic Market Outlook - 2014
North America
Western Europe
BRIC Markets
SECTION – 4
Strategic Business Outlook for each OEM for 2014
SECTION - 5
Key Industry Trends
SECTION - 6
Key Issues, Challenges & Risk Factors
SECTION - 7
Strategic Industry Outlook for 2014
