Strategic Management-Caterpillar Inc
Like many other competitive corporations, Caterpillar has clear short-term and long-term goals. First, the company is aiming at manufacturing high-quality products. It wants its products to be more appealing to customers to boost its sales volumes (Caterpillar.com, 2022). In the next five years, Caterpillar aims to create the best team of workers to strengthen its labor force. It understands that having a strong, competent, and cohesive team of workers could give it a competitive advantage (Britannica, 2022). The company aims to reduce workplace injuries and increase alternative sources of energy.
Caterpillar Company’s long-term goals are increasing its managed fleet hours by 100% and increasing the manufactured and rebuilt business sales by 20% in the next ten years. Caterpillar aims at becoming a global leader through innovation and sustainability. The company aims to provide a conducive environment that would boost corporate growth as it increases productivity through cost-effective strategies (Krause Find Research, 2017). It aims to become capable of rapid global expansions and optimal use of capital.
Mergers and acquisitions have been Caterpillar’s main business growth strategies. Over the years, the company has acquired 36 companies, two of them being private equity firms. The recent acquisitions were Kemper Valve and Fittings in March 2017, Yard Club acquisition in May 2017, and Marble Robot acquisition in June 2020 (Caterpillar.com, 2022). These recent acquisitions are said to achieve taper integration because Yard Club brought more technology, and the Kemper Valve acquisition widened the company’s range of products. Therefore, acquisitions boosted Caterpillar’s performance, thus achieving its goals.
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The most critical of Caterpillar’s acquisitions was the acquisition of Bucyrus International Corporation, which happened in 2011. This acquisition is known to be the most critical one that gave Caterpillar the necessary synergy to become more competitive (Britannica, 2022). The addition of Bucyrus led to increased product differentiation in that the company managed to increase the number of its products, hence offering the customers more options. Bucyrus was known for manufacturing heavy mining machinery and equipment (Caterpillar.com, 2022). Thus, its acquisition had a significant impact on Caterpillar’s product lines. The addition of Bucyrus enabled Caterpillar to become even more competitive in the heavy machinery and equipment industry. Caterpillar was facing fierce competition from industry leaders such as Komatsu, SANY, Volvo, John Deere JCB, Hitachi, and XCNG (Trainer, 2020). By acquiring Bucyrus International, Caterpillar countered this global competition through large mining equipment that boosted its differentiations.
Caterpillars Company’s operation plan for global strategy can be appropriate because it has helped attain its significant goals. In most cases, business firms may choose among the four global methods while marketing their products globally. The four strategies include multi-domestic strategy, transnational strategy, international strategy, and global standard strategy. Since Caterpillar is a multinational corporation, it has adopted the transitional approach (Krause Find Research, 2017). This strategy is characterized by the combination of local responsiveness and the quest to cut costs. It is a fact that Caterpillar acts as a local firm in foreign markets. It tries as much as possible to make local customers think that it is a local company. It does this by adding some local market features to its products (Trainer, 2020). This strategy makes the customers in every market have a soft look at it. In cutting costs, Caterpillar Company has a global dealer network and plants operating in different parts of the world to help cut down transportation costs (Caterpillar.com, 2022). The transnational strategy has worked well for Caterpillar since it has enabled it to maintain its marketing leading position in the heavy machinery and equipment industry globally.
References
Britannica. (2022). Caterpillar Inc. https://www.britannica.com/topic/Caterpillar-Inc
Caterpillar.com (2022). Caterpillar. https://www.caterpillar.com/
Krause Find Research. (2017). Caterpillar Inc. https://tippie.uiowa.edu/sites/tippie.uiowa.edu/files/documents/krause/f17_cat.pdf
Trainer, D (2020). Clear the way for Caterpillar. https://www.forbes.com/sites/greatspeculations/2020/06/17/clear-the-way-for-caterpillar- inc/?sh
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Question 
Strategic Management-Caterpillar Inc
Review the following terms and concepts discussed this week to prepare for this assignment:
vertical integration
taper integration
backward vertical integration
forward vertical integration
strategic alliances
global strategy
international strategy
innovation
Create a Word doc and title it Strategic Management Research Journal Part 4.
Write a 525- to 700-word response to the following prompts in your journal entry:
Identify Caterpillar Inc.’s short-term and long-term goals.
Evaluate how mergers and acquisitions in the last 3-5 years have contributed to Caterpillar Inc.’s performance and affected its organizational goals.
Determine the most critical merger or acquisition that has contributed to Caterpillar’s performance and success in achieving organizational goals. Defend your choice.
Evaluate the effectiveness of Caterpillar’s operational plan for global strategies (international, multi-domestic, global-standardization, or transnational). Include supporting research or data.