Caterpillar Inc. Company Strategic Management

Topic: Strategic Management
Words: 652 Pages: 2

The success of any business organization in the market is influenced by the level of planning, monitoring, and assessment of processes undertaken by the firm. It is through strategic management that managers can identify specific goals and various approaches to achieving them. Caterpillar Inc. Company has been formulating both short and long-term goals to enable it to meet its intended objectives in the industry. An effective business strategy such as acquisition enables firm’s to gain strong competitive advantage in the market.

To enhance its efficiency in the market, Caterpillar Inc. has formulated short-term objectives that it works towards. They include limiting the aspect of workplace injury that might affect its users. Sometimes clients using the machines are exposed to danger especially when the equipment becomes faulty. Improving safety is critical and the company’s focus is to guarantee customers’ safety. In addition, the firm’s long-term objective is to advance and promote the use of other alternative sources of energy that can be used by machinery. Currently, the corporation’s products mainly use diesel which is a by-product of petroleum (Ridley et al., 2019). The engagement is targeted to enhance the contribution to lowering the carbon footprint. Furthermore, the management goal is to facilitate quick rebuild and remanufacture to raise the level of sales by a significant percentage to increase its income.

To remain competitive in the market, Caterpillar Inc. opted to acquire other organizations and form mergers. Over the past years, the company has managed to acquire a significant number of corporations to influence the achievement of its strategic goals. For instance, the acquisition of Yard Club has enabled Caterpillar to access advanced technologies essential to its manufacturing processes (“Innovation at Caterpillar,” n.d.). The move proved useful for the firm because it is capable of producing types of machinery that are high-tech and capable of improving the safety goal. Similarly, Caterpillar Inc. acquired the Kemper Valve & Fittings business organization. The entity produces oilfield-related products and pressure pipes which are key components of Caterpillar’s commodities. Through the merger, Caterpillar managed to increase its product line in the market thus allowing it to make significant sales to achieve its goal of generating high income. The acquisitions have proven essential in strengthening the market position of the company leading to better performance.

Similarly, the most critical merger for Caterpillar Inc. was the acquisition of Bucyrus International in the year 2011 contributed significantly to the performance of Caterpillar in the industrial sector. The merger was targeted to lower the competition Caterpillar was facing from Bucyrus International which specialized in manufacturing mining equipment. The strategy allowed Caterpillar to minimize the impact of other players in the market such as Komatsu. The approach gave Caterpillar an added advantage since it managed to differentiate its products in the market which is vital for gaining a competitive force (“Digging deep to meet mining customers’ needs” n.d.). For instance, through the acquisition consumers have been able to obtain different items from the firm. Following the successful acquisition of Bucyrus International, Caterpillar Inc. improved its overall performance in the industry.

Based on the operations of Caterpillar Inc. in the market, its global business strategy can be categorized as transnational. Caterpillar Inc. is adding features on their machines to meet the demands and specification of a given local market. The tactic enables the company to capture large foreign market thus promoting its success (“Caterpillar’s strategy” n.d.). The approach has proven to be vital since most clients view the company as a domestic organization in the industry.

In summary, Caterpillar Inc. has remained proactive in the industry following its strategic management approaches. The engagement in the acquisition of other corporations such as Kemper Valve & Fittings and Bucyrus International gave the entity a competitive advantage that has enhanced its position in the market. Therefore, it is necessary for managers to formulate effective operation plans that have the potential of increasing the viability of an organization.

References

Caterpillar’s strategy. (n.d.). Web.

Digging deep to meet mining customers’ needs. (n.d.). Web.

Innovation at Caterpillar. (n.d.). Web.

Ridley, S. J., Ijomah, W. L., & Corney, J. R. (2019). Improving the efficiency of remanufacture through enhanced pre-processing inspection–a comprehensive study of over 2000 engines at Caterpillar remanufacturing, UK. Production Planning & Control, 30(4), 259-270.

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