Phoenix MGT 498 Strategic Management Research Project PowerPoint

Shawn Cyr

MGT 498

17 December 2019

Mr. Sell

Identify Caterpillar Inc.’s short-term versus long-term goals.

For over eighty-five years, Caterpillar Company has been making possible progress and steering sustainable and productive change on all continents. With 2018 revenue and sales of approximately $54.7 billion, an increase from 2017 sales and revenue of approximately $45.5 billion, the Company is among the world’s leading producer of mining and construction equipment, natural gas and diesel, and industrial gas turbines (Caterpillar.com). Caterpillar is also a prominent services provider through Caterpillar Logistics, Caterpillar Financial Services, Progress Rail Services, and Caterpillar Re-manufacturing Services.

The Company has established aspirational short-term and long-term goals for its product and operations stewardship. These goals will enable the company to lead the industry to a more sustainable and brighter future. The company’s short-term goal is to concentrate on efficiency improvements (Souder et al., 2017). These efforts will contribute to the company’s year-over-year performance improvements. On the other hand, the company’s long-term goals include: delivering greater results, developing and nurturing the best team, and becoming the universal leader in all places it conducts its business

Evaluate how mergers and acquisitions in the past 5 years have contributed to Caterpillar Inc.’s performance.

In today’s world, companies are bound to compete to stay on top. However, there are certain companies that are more successful and prosperous than others. These companies grab any opportunity that comes their way to stay ahead of others. These opportunities include merging with or acquiring other companies (Riepina et al., 2018). Just like other companies, Caterpillar has acquired several companies. Caterpillar Inc. has acquired approximately 35 entities, including 3 in the past five years.  In 2015, CAT announced its acquisition of ESRG Technologies Group, a data analytics developer and vessel monitoring within the marine industry. ESRG has offered remote monitoring and data analysis technology for assets in the naval defence and marine sectors since its initiation in 2000. Similarly, in 2016, Caterpillar Oil and Gas division acquired Kemper Valve and Fittings Corp. Kemper Valve & Fittings Corp has been producing low and high pressure pipe unions and other related products. In 2017, CAT acquired Yard Club, a corporation created to make more effective use of construction and other heavy machines.

All these acquisitions have contributed largely to CAT’s performance. The acquisitions have enabled the entity to enjoy economies of scale, hence decreasing its operational costs. Acquisitions have also enabled the corporation to have an easy entry in international markets. It has also enabled the corporation to have a competitive advantage over its competitors since the company has a larger market share. The increased market share has contributed a lot to the company’s revenue and sales. As stated earlier, in 2018, the company’s sales and revenue were approximately $54.7 billion, an increase from 2017 sales and revenue of approximately $45.5 billion.

Assess Caterpillar Inc.’s global strategy (international, multi-domestic, global-standardization, or transnational).

One essential thing that companies should do for them to grow is to pursue global customers. By pursuing global customers, companies will get access to a larger customer base, hence, enjoy increased profits and revenue. Going global also allows companies to diversify their market, hence, revenue sources will be more stable. Going global also improves a company’s reputation. Companies that can successfully pursue and attract global customers may enjoy the prestige of referring themselves as international companies. However, the process of pursuing global customers can be tricky.

Caterpillar Inc. decided to compete as a local entity in a foreign market. These have been the company’s success ever since. In 2018, external sales accounted for approximately 58.5% of the company’s total revenue. The company serves approximately 193 countries over its dealer network.. Additionally, CAT has employed thousands of individuals all over the world.  According to the 2018’s annual report, CAT hired around 104,000 full-time employees of whom around 59,400 are outside the U. S.

When we take a closer look at what Caterpillar is doing right domestically and globally, the most essential criterion relates to financial matters. The company usually allocates money to the best and highest use (Goffin, 2017). Even though this has been a problem with any companies, CAT has been able always focus on that. The other thing is the quality of their products and services. Although the company faces competition from companies such as Komatsu, John Deere, Kobe Steel, Volvo Construction Equipment, and Kubota, to name a few, quality products and services have enabled the company to enjoy the prosperity its enjoys currently and will continue to enjoy in the future.

The types of innovation Caterpillar Inc.’s uses, such as radical incremental, disruptive, and architectural innovation. Identify types of innovation Caterpillar Inc. has used over time.

Caterpillar Inc. has a very long history of innovation, from the very first commercial popular tractor to electric-drive technology, and many more. The company continue to build on these legacies with the formation of ground-breaking results/solutions-results that will influence the company’s competitors, allow customers to build a better life, and to change the future.

In the past, the company used incremental innovation. Incremental innovation is among the most popular innovations. This type of innovation normally uses the company’s existing technology (Un & Asakawa, 2015). Examples entail adding new features or elements to an existing product/service or removing certain features. Later on, the company changed to disruptive innovation, which involves the introduction of new processes or technology in the current market. However, it was difficult to change the company’s culture of improving the company’s existing product/service.

References

 Goffin, K. (2017). Caterpillar: a service brand for customer peace of mind. The Business & Management Collection.