Week 1 Strategic Management Journal

Week 1 Strategic Management Journal

Justify the guiding principles required for preparing effective statements that describe the mission, vision, and the core values of an organization as covered in the assigned reading.

The Vision, Mission, Objectives, Strategies, and Action Plans (VMOSA) process entails the guiding steps that lead to the company’s vision and mission. First, the company’s management, in this case, Caterpillar Inc., should understand its own vision or desired future position and current role in society, which is the mission. The mission statement should be concise, goal-oriented, and inclusive of the company’s key objectives. The vision and mission statements should highlight the most important aspects that matter to a community. The community refers to the most important direct stakeholders of the organization. Once Caterpillar Inc.’s management has this information, the company should create a vision statement that gives hope for the future, draws people in to work for a common goal, inspires stakeholders to realize their goals through positive and effective actions, and provides a foundation for the development of other elements of the VMOSA planning process (The University of Kansas, 2021).

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.

Caterpillar Inc.’s mission statement is ‘to provide the best value to customers, grow a profitable business, develop and reward people, and encourage social responsibility’. The mission statement fulfills the main aspects of the guiding principles as detailed through the VMOSA planning process. First, the mission statement is concise and captures the critical aspects as it pertains to the direct stakeholders. From the mission statement, one clearly understands that Caterpillar Inc. seeks to ensure that customers access the best value in terms of machinery, support services, and engines. Profitability is important to the organization because it is a valid reason for its existence. Achieving this aspect leads to increased shareholder benefits. Its employees and partners will have a chance to access development opportunities even as they work in a diverse environment that cultivates or supports innovation, teamwork, and continuous growth. Most importantly, these internal clients will be rewarded for their performance. Finally, the external community will benefit through Corporate Social Responsibility activities that Caterpillar Inc. drives (Thompson, 2018). The main objective of these CSR activities is to ensure that the quality of life improves while the natural environment is well-conserved.

Caterpillar Inc.’s vision statement is to “be the global leader in customer value”. This vision statement is brief and contains the term ‘global leader’, which provides the community with hope for a greater future. However, it is too generalized and fails to specify Caterpillar’s business sector. Thus, an individual who does not know about the company would not understand this goal due to a lack of such details (Caterpillar, 2021). It would be significantly ineffective in laying the ground for the development of other aspects of the VMOSA action planning process.

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.

Caterpillar Inc. enjoys little competition from new business players due to the low threat of new entrants into the sector. The particular sector is capital intensive, and even the few entrants work on a small-scale basis, thus exerting little to no effect on Caterpillar Inc. However, the existing competition from similar players in different regions is stiff. These players tend to have access to financial resources and research and development knowledge. In addition, the current shift towards automation of engineering tools threatens to substitute the heavy equipment that Caterpillar Inc. produces. The clients’ bargaining power is significantly low due to the number of limited players in the sector. At the same time, the suppliers’ power of bargaining is also low because Caterpillar Inc. does not rely on a single supplier. Thus, the company needs to work on its rate of innovation, to match up to the upcoming engineering solutions (Thompson, 2018).

References

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

The University of Kansas. (2021). Section 2. Proclaiming Your Dream: Developing Vision and Mission Statements. Retrieved from https://ctb.ku.edu/en/table-of-contents/structure/strategic-planning/vision-mission-statements/main

Thompson, A. (2018). Caterpillar Inc. Vision, Mission, Intensive Strategy, Five Forces, SWOT.

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Week 1 Strategic Management Journal