Caterpillar Inc’s Goals and The Impact of Mergers
Caterpillar’s Short-Term and Long-Term Goals
Caterpillar Inc. has a set of short-term and long-term goals that guide the company’s progress. The primary long-term goal is to attain profitable growth. The objective is based on the tenet that once profits grow, the company will have sufficient resources to invest in new products and services to cement its status as a global leader in the construction industry. Another long-term objective is to offer customers a wide range of innovative solutions. On the other hand, short-term goals are categorized into product management and operations. Operational objectives include reducing greenhouse gas emissions and reducing workplace injuries, while product management goals include enhancing the safety of those who handle these products along the supply chain.
Mergers and Acquisitions in the Last 3-5 Years and Their Impact on Caterpillar Inc.’s Organizational Performance and Goals
According to Caterpillar’s official website, one of the company’s most significant acquisitions in recent history is the purchase of Marble Robot. The 2020 deal means Caterpillar Inc. acquired all the company’s infrastructure, facilities, and employees (Caterpillar Inc., 2020). Notably, the acquisition aligns with Caterpillar Inc.’s strategic goal of adopting robotic technology. In addition, the acquisition seeks to give competition to companies with established robotics technology, like Komatsu. Companies use mergers to align with emerging technologies and remain competitive in the global market.
Other acquisitions include the 2017 purchase of Kemper Valve and Fittings Corp, which widened Caterpillar’s product range. Also, the 2020 acquisition of Yard Club brought new technological solutions that Caterpillar can leverage in the face of increasing competition. Most of Caterpillar’s acquisitions are designed to improve the company’s market position and competitive edge. The company uses these acquisitions to compensate for its weaknesses.
The Most Critical Acquisition
Throughout Caterpillar’s history, the most important acquisition was the 2011 purchase of Bucyrus International. Mergers and acquisitions (M&A) primarily occur to lower production costs, reduce competitive rivalry, and achieve differentiation benefits (Tamosiuniene & Duksaite, 2009). The acquisition of Bucyrus International lowered the competitive intensity of traditional competitors like Komatsu. The main idea behind the acquisition was to solve Caterpillar’s longstanding problem of having a narrow product range. By partnering with Bucyrus International, Caterpillar significantly improved its new product development capabilities. Particularly, the acquisition helped Caterpillar start producing advanced underground and surface mining equipment. Notably, mergers and acquisitions on the global stage have become a global trend due to the restructuring of some industries. Most companies engage in M&A deals to enhance their profitability prospects (Tamosiuniene & Duksaite, 2009). Once revenue increases, companies can then fulfill their shareholder obligations.
The Effectiveness of Caterpillar Inc.’s Operational Plan for Global Strategies
The company’s operational plan for the global strategy is effective since it helps it achieve its international goals. Motohashi (2015) presents four strategic frameworks that multinational corporations may pursue: international strategy, multi-domestic strategy, transnational strategy, and a global standardization strategy. Caterpillar pursues a transnational strategy, which is characterized by local responsiveness and corporate cost reduction goals. To that end, Caterpillar tries to act as a local player in areas where it operates, even going as far as adding some local features to its products. On the other hand, the company’s robust global network helps it deal with the pressure of rising costs. The transnational strategy pursued by the company has helped it maintain its position as an international leader in heavy equipment manufacturing.
Caterpillar has been largely successful on the international stage, outperforming its competitors by a wide margin. One of the indicators of the success of Caterpillar’s global strategy is the increase in sales of construction units. For instance, between 2010 and 2022, the company successfully sold over one million units of construction equipment (Statista, 2022). Despite the competition on the global stage, Caterpillar still manages to outperform established players.
References
Caterpillar Inc. (2020). Caterpillar Announces Acquisition of Robotics Expertise. Retrieved from https://www.caterpillar.com/en/news/caterpillarNews/customer-dealer-product/robotics-expertise-marble.html.
Motohashi, K. (2015). Global Business Strategy. In Springer Texts in Business and Economics. Springer Japan. https://doi.org/10.1007/978-4-431-55468-4.
Statista. (2022, April 19). Global construction machinery unit sales 2022. Statista. https://www.statista.com/statistics/589833/global-construction-machinery-unit-sales/
Tamosiuniene, R., & Duksaite, E. (2009). The Importance of Mergers and Acquisitions in Today’s Economy. KSI Transactions on Knowledge Society, 2(4), 11-15.
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Question 
The Strategic Management Project intends to provide you with practical experience with the elements of strategic management. The project is spread across the 5 weeks of the course. Weeks 1‑4 provide an opportunity to put key terms into practice by appraising the strategic planning elements of Caterpillar Inc. through documentation in the Strategic Management Research Journal. The Week 5 concluding assignment showcases your understanding of strategic management and improvement in formulating a presentation to Caterpillar Inc.’s leadership team.
Caterpillar Inc’s Goals and The Impact of Mergers
For the Strategic Management Project purposes, you will operate as if you are a new hire at the Caterpillar Inc. headquarters as Assistant Strategic Development Analyst.
Assistant Strategic Development Analyst Job Description
- Maintain a Strategic Management Research Journal in which you:
- Appraise Caterpillar Inc.’s corporate data, competitors, and associated business information.
- Document background information to include previous and current strategic management of Caterpillar Inc.
- Assess the strengths and weaknesses of the strategic management of Caterpillar Inc., based on your analyses, and provide information in a presentation to Caterpillar Inc. leadership.
- Recommend strategic management actions to ensure future success in a presentation to Caterpillar Inc.’s leadership team.
About Caterpillar Inc.
The following is derived from the Caterpillar Inc. website:
Caterpillar Inc. is a leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Caterpillar’s enterprise strategy focuses on solutions to help customers build a better world, allowing the company to deliver profitable growth for their shareholders. The company’s corporate governance program ensures it serves the interests of stockholders and other stakeholders with the highest standards of responsibility, integrity, and compliance with all laws. Caterpillar’s global presence, product breadth, and financial strength enable the company to be competitive in today’s global marketplaces.