Week 5 MGT 498

In this week’s discussion about strategic planning, we discussed more corporate strategy. We learned that there are three scopes of corporate strategy which include vertical integration, diversification as well as geographic scope. We also learned the role of the company leaders in the strategic planning of the company. The discussion also touched on concepts such as tape, innovation integration global strategy and international strategy among many other concepts (Rothaermel, 2019). The main aim of these concepts is to help the company strategically plan for activities that will help the company grow. The concepts also help to align the company strategically with other companies. In this journal, I will discuss some of these concepts and how they apply to the company’s strategic planning.

Caterpillars Inc. short versus long term goals.

Caterpillars Inc. has created both short term and long-term goals to help grow the company. The short-term goals of the company are mainly key improvements in various areas are that enable the company to achieve its long-term goals. These short-term goals include improvements in renewable energy areas, water consumption intensity, reducing the number of recordable injuries, improving sales and revenues, and reducing the GHG emissions intensity in the next five years (Caterpillar Inc., 2019). The company also has long term goals that encompass the short term goals and this includes, reducing the energy intensity by 50 percent, reducing the emissions of the company by 50 percent, reducing the water consumption in the company by 50 percent and reducing the injury recorded rate in the company by 60 percent (Caterpillar Inc., 2019). All of these should be achieved in 5 years. The short term goals are the necessary steps that the company must take to achieve its long term goals. The main purpose of achieving the goals is to reduce the costs of operations, offer better products and reduce pollution to the environment.

Mergers and acquisitions contributed to the company’s performance.

The company has acquired three companies through mergers and acquisitions in the last 5 years. Two of the three companies acquired by caterpillar are from the private sector and have divested a total of 8 assets. These mergers and acquisitions have enabled caterpillar companies to increase their aggressiveness in the market place increasing its dominance in the global industrial market (Merger. 2019). It has helped the companies increase their value, improve their overall performance and has reached an increased growth in the regional and global market share and its products in the market. It has established a strategic market realignment in the company’s network helping it achieve more market shares and thrive well in the last 5 years.

The company’s global strategy

Global strategies in caterpillar Inc. are important in achieving the company’s global objectives and create an international expansion. The company has adopted four global strategies that consist of multi-domestic strategies that involve tailoring products and services to meet the needs of customers in a particular country (Potter, 2019). The international strategies involve creating subsidiary companies in various countries that operate like local companies with minimal supervision from the main company. The global standardization strategies that involve the production of standard products that are aimed at satisfying consumers from different part of the world. The last one is the transnational strategies that involve the production of goods that are standardized for everyone to use and also other products that are customized for use in specific areas (Potter, 2019). Through the applications of the four discussed global strategies, the company can reach a wider market and offer different products to many buyers around the globe meeting all their needs.

Types of innovations in caterpillar Inc.

The company applies the four different innovations to expand its business, increase efficacy and increase its profits. Using Incremental innovation, the company can utilize the technology that is already in use to improve the values of the existing markets to the consumers (Potter, 2019). To increase new consumers in the market, the company makes use of architectural innovation to apply different skills and technology in creating new products. The company also uses disruptive innovation to apply new technology in the existing or new markets (Potter, 2019). Finally, when creating a brand new product or industry, the company applies radical innovation to achieve these goals and bring brand new products in the market and revolutionary technology in the market. Through combining all the discussed innovations, the company can create new products that can meet the consumers’ needs. The main aim of applying these innovations is maximizing the global value of technology in producing quality products.

References

Merger (2019). Retrieved from https://mergr.com/caterpillar-acquisitions

Potter, S. B. (2019). FactSet - Caterpillars Fortunes Are Tied to Those of The Global Economy. Retrieved from https://insight.factset.com/caterpillars-fortunes-are-tied-to-those-of-the-global-economy

Rothaermel, F. T. (2019). Strategic Management (4th ed.). New York, NY: McGraw Hill.