Case Study: Caterpillar Inc.

1289 words - 5 pages

1. Why was Caterpillar able to meet Japanese competition and succeed where other major US manufacturers failed?
Due the leadership of Glen Barton, who was with Caterpillar from 1964 to 2004? "Barton began his direction of Caterpillar at a time when there was weakened demand for its products in many markets around the world. By quickly redirecting its efforts into areas that showed more demand (such as smaller machines and truck engines), the company substantially outperformed its stiff competition. In 1999 Caterpillar was able to return a respectable profit to its stockholders, even though many industries served by Caterpillar were in the middle of or emerging from recession. Barton proceeded to lead the company to an improved relationship with the union, giving much of the credit for the company's financial success during his reign to the excellent support provided by all of its employees." (Caterpillar 2009).
This information is significant as Barton saw an issue and reinvented the company's focus to focus on different areas of the business. When one portion of the business is faltering or lagging, a good manager will look at the company's strengths and focus on those strengths as he or she restructures the faltering portion of the business. That is exactly what Barton did and the success he has had in his tenure is impressive.
2. What did Caterpillar do that the big three US automakers have not done?
The Washington Post has stated, "Caterpillar has come up with the model for how a big American manufacturing company can not only survive, but prosper, in a highly competitive global economy." (Pierlson 2006) While others failed, Caterpillar has had excellent leadership. Leadership that looked at corporate American greed and reversed the abuse process.
3. Using a SWOT analysis, summarize Caterpillar's marketing and management strengths and weaknesses.
Strengths
The marketing strengths are significant. "In 1992 Caterpillar formed a joint venture with Mitsubishi Heavy Industries (MHI) Ltd to combine technological, financial and marketing strengths in the production of materials handling equipment." (Caterpillar 2009) What marketing genius. Mitsubishi Heavy Industries, a Japanese company and Caterpillar, an American company, joining forces on more than one level. This joint venture brought Caterpillar to the next level and to the hard to penetrate Japanese market.
The company's business decisions have been wise and by partnering with MHI, the same marketing budget is now doubled or even tripled, depending upon the agreement.
The strengths of the company's marketing are strong and surpass the competition.
Weaknesses
The weaknesses are too few to mention, as the company has posted another impressive quarter. AG Equipment Magazine is quoting that "Caterpillar's revenues are up 34%." (2008)
4. In the United States, Caterpillar is competing in a mature industry. This means that for Caterpillar to increase its US...

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