Strategic Management Research Journal – Caterpillar Inc

Strategic Management Research Journal – Caterpillar Inc

Mission

Caterpillar’s mission highlights three main elements: value to clients, profitability, rewards, and social responsibility.

To provide the best value to customers, grow a profitable business, develop and reward people, and encourage social responsibility

When developing a mission statement, it is necessary to ensure that the terms used are concise, outcome-oriented, and inclusive (Caterpillar, 2021). The company’s mission statement gets the main message about their daily activities in the market in one sentence. An outcome-oriented mission highlights the goals or outcomes that an entity intends to achieve through its activities. This element is achieved in Caterpillar’s mission statement because the main outcomes are clearly highlighted in the statement. Inclusivity is also evident as the mission statement highlights the inclusion of the community in the process. As demonstrated, Caterpillar’s mission statement converts the company’s broad intentions contained in the vision into specific action-oriented aspects. The involved parties, including clients, employees, and the community, are concisely informed of their roles.

Vision

A company’s vision statement is broad and highlights the future goal of the entity. In the case of Caterpillar, the vision statement highlights the future plan (Caterpillar, 2021).

To be the global leader in customer value

The company’s aspiration is accurately captured in a brief statement. First, the vision statement is easy to comprehend. All stakeholders can easily visualize the company’s future goal. As a result, the vision statement inspires all stakeholders to work towards the goal. It also acts as a basis for other strategies that are likely to achieve the company’s goals.

Core values

Caterpillar’s core values include integrity, excellence, teamwork, commitment, and sustainability. Core values highlight the company’s guiding principles in terms of behaviours. They should be enabling employees to achieve the mission and vision statements. Caterpillar’s core values are sufficient for the achievement of the mission and, consequently, the vision statement.

Current activities at Caterpillar show progression towards the achievement of the mission and vision. The company participates in sustainability-oriented activities, an important aspect of the core values and the mission statement. In addition, innovation is embraced at the company through research and development. This leads to the development of effective products to solve the current challenges that the clients may be experiencing, thus achieving increased customer value.

Caterpillar Inc. enjoys specific competitive advantages. These include reliable cash flow, performance in the markets, return on investments, reliable network of suppliers, client satisfaction, automation, good reputation, and strong distribution networks. These advantages relate to the company’s access to human and financial resources and its allies and business partners. The long-standing partnerships with the distributors have made distribution and availability of its products easy in various locations. There are at least 175 dealers in more than 180 nations. The dealers have represented Caterpillar Inc. in these regions since the 1970s (MarketWatch, Inc., 2021). Thus, Caterpillar’s expansion cost into new areas is reduced significantly since they are already present through third parties. Good relations with its suppliers minimize the likelihood of material shortages.

Its main competitive disadvantages include reduced marketing, issues with inventory turnover, debt obligations, a low success rate in core business activities, a high attrition rate, and significantly low investments in research and development compared to competitors. These disadvantages can be improved by improving the working conditions, increasing R&D investments, finding retention strategies, motivating employees appropriately, and training leaders on strategic and ethical leadership.

References

Caterpillar. (2021). About Caterpillar. Retrieved from Caterpillar: https://www.caterpillar.com/en/company.html

Caterpillar. (2021). Strategy & Purpose. Retrieved from https://www.caterpillar.com/en/company/strategy-purpose.html

MarketWatch, Inc. (2021). Caterpillar Inc. Retrieved from MarketWatch: https://www.marketwatch.com/investing/stock/cat/company-profile

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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 Caterpillar Inc.’s current competitive advantages and disadvantages 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.