Excavators are used to dig foundations for large buildings trenches to lay large pipes for sewers…

Disruptive Technology in Mechanical Excavators

Excavators are used to dig foundations for large buildings, trenches to lay large pipes for sewers and the like, and foundations and trenches for residential construction and farm work. Prior to the 1940s, the dominant technology used to manipulate the bucket on a mechanical excavator was based on a system of cables and pulleys. Although these mechanical systems could lift large buckets of earth, the excavators themselves were quite large, cumbersome, and expensive. Thus, they were rarely used to dig small trenches for house foundations, irrigation ditches for farmers, and the like. In most cases, these small trenches were dug by hand. In the 1940s, a new technology made its appearance: hydraulics. In theory, hydraulic systems had certain advantages over the established cable and pulley systems. Most important, their energy efficiency was higher: for a given bucket size, a smaller engine would be required for a hydraulic system. However, the initial hydraulic systems also had drawbacks. The seals on hydraulic cylinders were prone to leaking under high pressure, effectively limiting the size of the bucket that could be lifted using hydraulics. Notwithstanding this drawback, when hydraulics first appeared, many of the incumbent firms in the mechanical excavation industry took the technology seriously enough to ask their primary customers whether they would be interested in products based on hydraulics. Because the primary customers of incumbents needed excavators with large buckets to dig out the foundations for buildings and large trenches, their reply was no. For this customer set, the hydraulic systems of the 1940s were not reliable or powerful enough. Consequently, after consulting with their customers, the established companies in the industry made the strategic decision not to invest in hydraulics. Instead, they continued to produce excavation equipment based on the dominant cable and pulley technology. It was left to a number of new entrants, which included J. I. Case, John Deere, J. C. Bamford, and Caterpillar, to pioneer hydraulic excavation equipment. Because of the limits on bucket size imposed by the seal problem, these companies initially focused on a poorly served niche in the market that could make use of small buckets: residential contractors and farmers. Over time, these new entrants were able to solve the engineering problems associated with weak hydraulic seals, and as they did so, they manufactured excavators with larger buckets. Ultimately, they invaded the market niches served by the oldline companies: general contractors that dug the foundations for large buildings, sewers, and so on. At this point, Case, Deere, Caterpillar, and their kin rose to dominance in the industry, while the majority of established companies from the prior era lost share. Of the thirty or so manufacturers of cable-actuated equipment in the United States in the late 1930s, only four survived to the 1950s.

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