Strategic Management Project

MGT/498: Strategic Management Research Journal Part 3 |

Caterpillar’s Incorporation Measure of Strategic Effectiveness

Caterpillar Incorporated is ensuring that there is strategic effectiveness. The process of planning, continuous assessment, control and implementation of the set organizational objectives and goals create a strategic effectiveness. To begin with, there is a clear goal set which is to provide high quality products which provide value to the consumers of our products and outdo the competitors’ quality. It is taken with serious action that every employee maintains their best performance toward the organizational goal. The organization is a global company and therefore provides quality products to consumers around the globe. Innovation of new and advanced products is part of maximizing the customer satisfaction.

Apart from the customer satisfaction, the employees’ safety while at work is a priority to ensure that performance is maximized. Providing a wide variety of products for the consumers ensures that customers are provided with a variety of products to suit them in their different life cycles. The central objective is to ensure that customers have optimal support and provided the best services by the company’s dealers (CO-PRODUCERS, C. A. 2006). There is intensive use of the digital data analytics, which ensure that all the resources are used to the maximum. The level of inertia is low considering the open mindedness of the leaders as well as the openness to altering technology.

Caterpillar’s Inc. Organizational Structure

The organizational structure is the strategic system in which the workflow of the organization is organized. In Caterpillar Inc., uses a structure that is decentralized shifting of absolute authority away from the senior management. Authority is delegated to management on the lower levels so as to spread the decision-making process away from the senior management. This structure is effective in the operational workflow since it allows faster decision making and simplifies the MGT/498: Strategic Management Research Journal Part 3 | Tee hunter process of work around the globe for quality customer services. However, it is the responsibility of the board of directors to oversee the management of the company, ensure that Caterpillar Inc. follows all the legal requirements as well as monitor the various management teams. The different divisions of the organization have vice presidents who delegate power and decision making to their teams. The organization simply works with teams who work together to actualize the delegated tasks.

The organizational structure at Caterpillar Incorporated is a holocracy as the management is decentralized. Employees are actively involved in the decision-making process and power is decentralized. This ensures that employees are actively participating in realizing the goals and objectives which are set. Importance of Internal and External Environments Internal business environment is encompassed by the factors which are within the business and therefore affecting the operations and efficiency. Leaders in Caterpillar Inc. must therefore be vigilant as such internal factors to ensure that the operations are maximized, the available opportunities are tapped and strengths are identified and reinforced. In addition, any weaknesses and threats identified are addressed appropriately by elimination of reduction. The external environment covers all factors outside the business such as the political, social, economic, legal, technological and the environmental factors (Yüksel, I. 2012).

The social factors dictate relevant information about the consumers’ preferences which are determined by their age, cultural inclination, rate of population growth and the demography. This makes up the consumer behavior which ensures that all the needs of the consumers are met satisfactorily. Environmental factors are important in establishing the positioning of the business. The environment being fragile and susceptible to pollution, environmentally friendly methods must be used to ensure the pollution is minimized. The economy has a huge impact on the business in terms of the interest rates, exchange rates especially in the global market and varying economic growth rates. Prices of commodity will rise and fall with such volatile economic factors.

Technology has become part and parcel of every human being today. Caterpillar’s leadership must be at the forefront in incorporating new technology to obtain a competitive position. The political environment determines how well business will boom. A highly stable political environment allows for business to boom. Legal factors such a s the compliance requirements are created to ensure consumers are protected, Noncompliance to such legal requirements will lead to financial struggle in the future.

Caterpillar Inc.’s Competitive Position

The level of Caterpillar’s competition is high and due to the quality it offers its clientele it is the leading incorporation. The level of quality is not only in the products but also the wide variety of products around the lifecycle of the consumers and the lower pricing. Employees are treated well, therefore they perform to their maximum to provide quality services. This is especially evident in the quality service of Caterpillar’s dealers. The operations of Caterpillar occur globally; this simply provides the advantage of economies of scale where the costs are reduced. In addition, the company has a strong financial backbone which supports it in case of economic instability. Due to the use of advance digital analytics and advanced technology, it has gained more competitiveness in its service delivery.

Recommendations

Active engagement of the consumers to help know whether the consumers’ needs are being adequately met and provide a more emotional relationship to reinforce the consumer quality would be a step to strengthen and support the company’s strategic plan. In order to improve their business performance, utilizing the Operating and Execution Model can be helpful. This will show the decision makers where the successful parts of the business are and they can then either streamline or shore up their movements in that sector. They can also use the information to see where they have the best potential for development.

References

CO-PRODUCERS, C. A. (2006). Implications for Marketing Strategy Effectiveness and Marketing Operations Efficiency. The service-dominant logic of marketing: dialog, debate, and directions, 166.

Yüksel, I. (2012). Developing a multi-criteria decision-making model for PESTEL analysis. International Journal of Business and Management, 7(24), 52.