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Business, Coursework, Pages: 2

Week 2 Apply Strategic Management Journal Part 2

Week 2 Apply Strategic Management Journal Part 2

Conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of Caterpillar, Inc. Each SWOT quadrant must contain 7-10 items, (this is not included in the 525-word count).

Strengths

1.      Reliable cash flow

2.      Great performance in markets

3.      Returns on investment

4.      Reliable suppliers

5.      Good reputation for product development

6.      Customer satisfaction

7.      Automation that has led to consistency

8.      Formidable dealer networks of distribution

 Opportunities

1.      New clients from online forums

2.      Increasing client spending

3.      Reduced cost of transportation

4.      Increasing urbanization

5.      Automation and digitization

6.      New technological innovations

7.      Markets arising from renewable energy
Weaknesses

1.      High attrition rate

2.      Low investment in research and development

3.      Reduced marketing

4.      Low rate of success in core business activities

5.      Gaps in the current product range

6.      Issues with inventory turnover

7.      Debt obligations

 

 Threats

1.      Shortage of skilled employees

2.      Counterfeit or low-quality machinery

3.      Environmental regulations (Paris 2016 agreement)

4.      The increasing strength of local distributors

5.      Currency fluctuations due to operations in different countries

6.      Increasing wages and policies to support the same

7.      Challenging economic conditions

Analyze Caterpillar’s strengths and include specific examples based on your SWOT analysis findings.

Caterpillar Inc. enjoys a reliable and strong flow of cash, which facilitates its ability to carry out different activities. This advantage has enabled the organization to expand into new markets and create success out of these. This expansion and success have increased the company’s streams of revenue and its stability as well. The projects and investments that Caterpillar Inc. makes have resulted in significant returns, making them worthwhile. The suppliers who provide raw materials are reliable due to fewer market players with similar demands. The company has innovated and created consistency by automating various production activities, contributing to quality consistency. As a result, the satisfaction rate is high among clients. In addition, the dedicated CRM department ensures that clients’ needs are met sufficiently. Most importantly, the strong network of distributors has enhanced the company’s ability to compete. There are about 175 dealers in more than 180 nations. The dealership network is valued at $23.4 billion. Most of these dealers have worked with Caterpillar Inc. since the 1920s, such as the Yancey Brothers (MarketWatch, Inc., 2021). This cooperation reduces the costs of operation and ownership across the continents.

Evaluate the weaknesses and threats for any common themes that might be a risk.

According to data obtained from Comparably, Caterpillar struggles with the retention of good employees. At least 92 percent reported that they would leave the company for a 20 percent raise in a different entity. More than 60 percent reported burnout, while 68 percent believe that leaders could do more to enhance retention. Compared to other competitors such as John Deere, Alamo Group, Dresser-Rand, and Columbus McKinnon, Caterpillar Inc. is ranked fourth in the retention of employees (Comparably, 2021). The inability to retain employees aligns with the current shortage of skilled workforce, threatening Caterpillar’s ability to keep doing business. In addition, the company’s lack of significant investment in Research and Development inhibits its ability to explore other business segments and compete with other companies.

Compare Caterpillar’s weaknesses against its opportunities.

Caterpillar Inc.’s threats and weaknesses are linked to the opportunities that exist in its external environment. For instance, more investment in Research & Development is likely to increase innovation and enable the company to explore technological advancements and reach out to clients online. The company’s low retention rate is connected to the shortage of a skilled workforce. Limited innovation inhibits the ability to take advantage of the rising urbanization and produce machinery that satisfies needs aligned with green awareness among clients. The renewable energy concept is developing new markets that Caterpillar Inc. cannot access due to limited innovation.

Propose problem-solving strategies to address Caterpillar’s weaknesses or threats that could be mitigated by a business opportunity or business decision.

To solve the current problems, Caterpillar Inc. needs to increase its current spending on Research and Development. The process should lead to more innovation and enable the company to develop more technologically aligned products than the current ones. Since clients are gaining awareness of environmental conservation and renewable energy, their needs are changing to accommodate these aspects. Thus, Caterpillar Inc. must also move at a fast pace to continually meet the market’s needs. In addition, it is important to devise different retention strategies to ensure that employees are comfortable and motivated. A motivated workforce is an essential competitive advantage for the entity. The motivation can also be drawn from continuous learning and development, which empowers employees and offers career growth opportunities. Finally, marketing is vital in ensuring that the company reaches all clients from different platforms. Online marketing aligns with the areas that the company should explore to ensure that Caterpillar Inc. has a visible online presence to increase its sales.

References

Comparably. (2021). Caterpillar Inc.. Retrieved from Comparably: https://www.comparably.com/companies/caterpillar/retention

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

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Question 

Week 2 Apply Strategic Management Journal Part 2

Assignment Content

Strategic management includes an analysis of a business’s current state. Continuing with your research of Caterpillar, Inc., you will leverage the business SWOT tool to identify and drive organizational strategic decision making and evaluate problem-solving strategies for the company.

Week 2 Apply Strategic Management Journal Part 2

Week 2 Apply Strategic Management Journal Part 2

Review the Strategic Management Project Background document (Below “Overview”)

Create a Word doc and title it Strategic Management Research Journal Part 2.

Write a 350- to 525-word response to the following prompts in your journal entry:

    1. Conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of Caterpillar, Inc. Each SWOT quadrant must contain 7-10 items, (this is not included in the 525-word count).
    2. Analyze Caterpillar’s strengths and include specific examples based on your SWOT analysis findings.
    3. Evaluate the weaknesses and threats for any common themes that might be a risk.
    4. Compare Caterpillar’s weaknesses against its opportunities.
    5. Propose problem-solving strategies to address Caterpillar’s weaknesses or threats that could be mitigated by a business opportunity or business decision.

Overview

The intention of the Strategic Management Project is to provide you practical experience with the elements of strategic management. The project is spread across the 5-week period 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 the formulation of a presentation to Caterpillar Inc.’s leadership team.

For purposes of the Strategic Management Project, you will operate as if you are a new hire at the Caterpillar Inc. headquarters in the role of 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 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 and allows the company to deliver profitable growth for their shareholders. The company’s corporate governance program ensures they serve 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 enables the company to be competitive in today’s global marketplaces.