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Annual Strategy Dossier - 2014 - World's 10 Leading Construction Equipment Manufacturers


1. Industry Backdrop: Global Construction Equipment Industry on a Tough Terrain:-


The Global Construction Equipment industry has been on a tough terrain with most OEMs facing significant pressure on machinery sales, order intake & profitability going forward into 2014 amid difficult & uncertain global macroeconomic environment & conditions further compounded by the ongoing slump in mining activity that has altered the product sales mix across OEMs and has subsequently impacted profitability. The EU economy is slowly making an egress from the slump and making steady recovery while the U.S. economy is poised to move towards more stability in 2014 with a favourable fiscal & monetary policy stance & outlook. The construction activity in the U.S. has been improving of-late driven by strong housing starts which are estimated to touch 1 million in 2013 while projections for 2014 indicate towards the 1.18 million mark. Strong housing starts & modest non-residential construction activity are likely to be key drivers of replacement demand in North America over near term.


2. Chinese Economy Likely to Stay Steady at around 7.5% GDP Growth Rate for Q4 2013 & 2014:-


The economic growth in China; which has been of strategic significance for the global construction equipment industry; registered a decent 7.5% growth during Q3 2013, driven mostly by fiscal measures which had been a much needed change. The estimates for Chinese GDP growth for Q4 2013 & Q1 2014 indicate towards the 7.7% level despite continued economic tightening putting pressure on credit growth besides slowing down of factory output and weakening of export orders in December 2013. Overall, the GDP growth target for the World’s second largest economy for 2014 is likely to be set at around 7.5% by the Chinese Government which is likely to match the 2013 level more or less.


3. Improved Construction Activity Likely in 2014:-


Thus, 2014 is likely to be much better for the construction equipment industry with a number of variables favouring construction activity across Traditional Markets & China. However, managing cost base efficiently & optimally besides sporadic currency fluctuations that pose a significant threat of profitability erosion across OEMs remain key challenges for the industry. The magnitude of impact of the strengthening of Swedish Krona on Volvo’s profits had 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.


4. 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.


5. Report Rationale: Strategic Insights into Key Strategies & Plans being Pursued by Industry OEMs


The report analyses & provides strategic insights into the key strategies & plans being crafted & pursued by these 10 key, Global Construction Equipment manufacturers to navigate their way through the present macro-environmental uncertainty & difficult global economic conditions necessitating strategic nimbleness & deftness. Most leading industry OEMs, however, are working towards rationalizing & optimizing their overall cost base & industrial footprint with competitiveness becoming critical and continue with their strong R&D focus directed at the development of new product platforms and cutting-edge technologies delivering enhanced performance features as well as optimized operating economics.


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 – New Product Platforms & Technological Innovations

4. Growth Strategies & Plans – Organic & Inorganic

5. Business Strategies & Plans

6. Corporate Strategies & Plans

7. Sales & Marketing Strategies & Plans

8. Production/Manufacturing Strategies & Plans

9. Financial Strategies & Plans


6. Strategy Excerpts from the Report:


1. Analysis of Caterpillar’s Strategies to Bolster Profitability & Enhance Operating Efficiencies.

2. Analysis of Komatsu’s R&D Driven Growth Strategy with Development & Integration of a range of ICT Technologies & Applications forming Core of New Product Development Strategy.

3. Analysis of Volvo’s 2013-2015 Strategy for Construction Equipment Business Revolving around the Triad of Growth, Efficiency & Leadership.

4. Analysis of CNH’s Financial Strategy focusing on Liquidity & Diversification of Funding Sources.

5. Comprehensive Analysis of Hitachi’s Vision 2020, Products Specific Strategies, Services & Solutions Specific Strategies & Specific Strategies for Key Global Markets & Regions.

6. Analysis of John Deere’s Pursuit of an End-User Driven New Product Development Strategy.

7. Analysis of Key Technological Trends likely to Shape Industry’s Future.


7. Relevance & Usefulness: Strategic Planning, Analysis & Decision-Making Process


- Strategic Planning, Competitive Analysis & Benchmarking Exercise

- Comprehensive Strategic & Competitive Assessment & Analysis for each key OEM

- Strategic Insights into key Business Strategies & Plans being pursued by each key OEM

- Assessment of degree of environmental responsiveness as well as strategic orientation

- Identification of opportunities which could be capitalized upon

- Identification of potential threats in the business environment

- Gaining a Strategic Perspective on the Business & Strategic Outlook for all key players for 2014

- Gaining access to Key Industry as well as Market Trends, Insights & Growth Opportunities

- Analysis of Forces Driving as well as restraining the Industry & their overall Dynamics through a Force Field Analysis

- Identifying & highlighting areas for Strategic Changes, Adjustments & Realignment

- Access to Key Industry Trends, Issues & Challenges, Risk Factors & Industry Outlook for 2014


8. For Whom: Key Decision-Makers across Industry Value Chain


The report would be essential for those having strategic interest in the Global Construction, 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.


9. Report Highlights: Visual Representation/Orientation with a Slide based Architecture


The report is comprehensive yet concise & compact at the same time; is custom-built for meetings & presentations with visual representation & orientation based on a slide architecture, 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.


10. Key Takeaways: Enhances Scope of Utilization/Application with Visual Representation & Saves Time


This PowerPoint architecture based report provides high readability & ease of navigation and saves significant amount of time by saving the end-user the effort of sifting through voluminous pages of text besides enhancing the scope of retention, immediate utilization & application of analysis with visual representation and incorporation of relevant images to support & supplement the analysis.

Table of Contents

Section - 1


Business Structure & Snapshot – For each of the 10 Leading Construction Equipment Manufacturers


a) Founded

b) Headquartered

c) Business Segments

d) Employees

e) Revenues

f) Market Capitalization

g) Key Executives

h) Shareholding Pattern & Structure


Section - 2


Financial Performance Snapshot – Q1-Q3 2013 Vs. Q1-Q3 2012 & H1 2013 Vs. H1 2012- Charts & Analysis for each Company:


- Sales Revenues Growth Trend

- Revenues Split by Key Business Segments

- Gross Earnings & Margin Trend

- Operating Earnings Growth

- Operating Margin Trend

- Profitability Growth

- Net Profit Margins Trends

- Cash Flow Generation by Operations


Section – 3


Construction Equipment Business Segment – Snapshot – For all 10 OEMs – Charts & Analysis


- Sales Revenues Growth Trend

- Operating Margin Trend

- Revenues Split by Key Geographic Markets & Regions

- R&D Expenditure Level, Growth Rate & Trend

- Capital Expenditure


Section – 4


SWOT Analysis – For Each Company


-Sources of Strengths to be Leveraged

-Areas of Improvements to Ameliorate & Offset

-Opportunities to Capitalize Upon

-Threats to be Mitigated, Negated & Overcome


Section - 5


Key Strategies & Plans - For each of the 10 key 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 Strategies & Plans

6. Corporate Strategies & Plans

7. Sales & Marketing Strategies & Plans

8. Production/Manufacturing Strategies & Plans

9. Financial Strategies & Plans


Section – 6


Global Construction Equipment Industry - Force Field Analysis


-Driving Forces

-Restraining Forces


Section – 7


Key Industry Trends


Key Issues & Challenges


Risk Factors


Industry Outlook for 2014

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