Caterpillar’s Strategic Management

Caterpillar’s Strategic Management

Introduction

Caterpillar is the most successful company in producing truck-type tractors in the world. Caterpillar came into existence because of competition between Benjamin Holt and Best (Gibbs, 2018). Over the years, the company has changed with changes in technology to survive the tuff competition from companies producing mining equipment, industrial turbines, diesel and gas engines, and all diesel/electric locomotives. For instance, in 1890, Benjamin invented a steam tractor that kept farmers working for longer hours; this gave the company a mirage over the competitors. The company does business across the world, providing solutions to three major segments- Energy and Transport, construction industry, and resource industry through the provision of finances using financial products (Gibbs, 2018).

Guiding principles in the mission and vision statement of Caterpillar

Mission statement: “to enable economic growth through infrastructure and energy development, and to provide solutions that support communities and protect the planet” (Muelle, 2018)

Vision statement: “a world in which all people’s basic needs such as shelter; clean water, sanitation, food and reliable power are fulfilled in an environmentally sustainable way and a company that improves the quality of the environment and the communities where we live and work” (Muelle, 2018)

Core values: “integrity, excellence, teamwork, commitment and sustainability” (Muelle, 2018)

The guiding principles of the above mission and vision statement include the economy, environment, customers, products, and employees. The mission, vision, and values of the company revolve around the production of quality goods and services that satisfy the customer’s needs without causing any harm to the environment and ensuring economic growth and development.

Comparison of Caterpillar’s mission, vision, and core values’ conformity to guiding principles in the organization’s strategic planning

The company’s main strategy focuses on legacy and continuous commitment to meet customer needs and invest in potential areas for profitability growth. The guiding principles of the mission, vision, and core values are vital to the company’s strategic planning through ensuring economic growth, environmental sustainability, and the production of quality products to satisfy customer needs and a good working environment for employees.

The company and the products support economic growth across the continents. The company’s strategy to expand the markets worldwide has led to investment in transport, energy, and telecommunications (Chowdhury, 2018). Through improved infrastructural facilities, the customers immediately access goods and services. Developed infrastructural facilities have led to access to a wide market, which has improved the company’s profitability.

The company’s environmental sustainability strategy aims at reducing greenhouse gas emissions. Caterpillar supports customers to meet environment-related measures in the energy transition to lower carbon by investing in new technologies such as the use of steam to run machines in factories (Chowdhury, 2018). A sustainable environment creates a good working environment as it reduces complaints from the surroundings.

Caterpillar’s creativity and innovation over the years have made it successful (Chowdhury, 2018). The company’s team has built a high-class technology that produces a variety of machines that meet the customer needs that keep on changing day day. Implementation of high technology and developed transport/communication networks have led to the company’s profitability in a wide range of markets.

The company focuses on employee experience that creates an environment where every worker does their best. The company’s strategy of implementing decisions as per the employees’ feedback motivates employees to continue working hard. Allowing employees to participate in decision-making promotes creativity and innovation by sharing ideas.

Caterpillar’s Current Competitive Advantages and Disadvantages (SWOT Analysis)

Caterpillar’s competitive advantages and disadvantages can be examined through SWOT analysis in the current world where a business has become competitive. The company’s competitive advantages are based on the strengths of the company. Such competitive advantages include a strong brand, large-scale production, and access to a large market. Caterpillar’s brand image is known worldwide for its high-quality products. The company’s large-scale production supports the growth of side business activities such as contracts to construct roads and buildings. Caterpillar has access to wide markets since its products are known all over the continents.

The company’s disadvantages are based on its weaknesses and threats. Caterpillar’s current disadvantages include a lack of distributors in new markets, imitations from competitors, advanced technologies, and low innovation rates in emerging markets. A limited marketing network hinders the company from maximizing profits. Meanwhile, Caterpillar does not have extensive distributors in the Chinese market. Stiff competition between Caterpillar and other companies has led to product imitations. The Chinese manufacturers have come up with modifications that are similar to Caterpillar. Japanese competitors have come up with robots that are more competitive. In summary, Caterpillar is facing stiff competition in the market.

Recommendations for Caterpillar

Caterpillar can improve their products through differentiation strategies. The company has to invest resources to conduct market research and develop unique products. To improve the company’s distribution network and finances, Caterpillar should increase the number of distributors in countries like China.

References

Caterpillar. (2019). Caterpillar | Vision, Mission, Strategy, & Principles. Caterpillar.com. https://www.caterpillar.com/en/company/sustainability/vision-mission-strategy.html

Chowdhury, A. R., Soh, G. S., Foong, S., & Wood, K. L. (2018). Implementation of Caterpillar-inspired rolling gait and nonlinear control strategy in a spherical robot. Journal of Bionic Engineering, 15(2), 313-328.

Gibbs, E., & Phillips, J. (2018). Who owns a factory? Caterpillar tractors in Uddingston, 1956-1987. Historical Studies in Industrial Relations, 39, 111-137.

Mueller, R. P., Reiners, E. A., Lane, J. E., Gelino, N. J., Nick, A. J., & Batterson, L. (2018). Sensor testing for telerobotic perception during asteroid and mars regolith operations. In Earth and space 2018: Engineering for extreme environments (pp. 440-453). Reston, VA: American Society of Civil Engineers.

Wilbert, C. (2010). The success of Caterpillar’s global approach to change management. Global Business and Organizational Excellence, 29(6), 17-24.

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Create a Word document and title it Strategic Management Research Journal Part 1.

Caterpillar’s Strategic Management

Write a 500- to 700-word response to the following prompts as your journal entry:

Create a Word document and title it Strategic Management Research Journal Part 1. Write a 500- to 700-word response to the following prompts as your journal entry: Justify the guiding principles required for preparing effective statements that describe the mission, vision, and core values of an organization as covered in the assigned reading.
Compare whether Caterpillar Inc.’s mission, vision, and core values conform to the guiding principles in the text and support organizational strategic planning principles as justified in prompt #1. Refer to the Caterpillar Inc. website listed in the Resources section below.
Assess what Caterpillar Inc.’s current competitive advantages and disadvantages are by considering their business partners, allies, and general operations. Research the assignment resources listed below. Based on your research, evaluate Caterpillar’s current competitive advantages and disadvantages.