Cummins Incorporated continues to grow and maintain a competitive advantage in their respective market. The company does not make its on vehicles however, it makes nearly half of its revenues from its Engine segment. This segment composes diesel and natural gas powered engines for the heavy and mid-duty truck, automotive and industrial markets, along with marine, rail, mining, and construction. Cummins also offers complementary business segments which include Components, Power Generation and Distribution. Furthermore, Cummins has a strong history of remaining focused, even under financial constraints. For example, Cummins' competencies around heavy truck engines allowed it to significantly increase market share when their competitor, Caterpillar, left the heavy truck engine market. Cummins recent experiences with competition are vital, because they prove that one should evaluate all opportunities and use them to improve on unique strategies.
How can two companies look at the same external environment and come up with completely different strategies? Cummins strengths lie mainly in production and engine. On the other hand, Caterpillars lie in heavy equipment development,
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results have been outstanding in the current economic environment. Profits were up 78% in 2011 over 2010. By truly understanding the different market requirements, Cummins was able to capitalize on their customization advantage and use these regulatory changes as a way to gain market share. When your company is faced by a market change similar to the regulatory threat faced by Cummins, try to evaluate the threat as an opportunity, rather than just a threat. In terms of fuel efficiency, Cummins’ engines are 6% better than Caterpillar. That’s not the only area where CMI’s coming out on top. It’s taking share from CAT in other heavy-duty engines as well. Cummins is taking share from all its competitors, actually, as it’s now the largest supplier to Paccar.