Caterpillar Tractor Co. – Case Analysis. The Case Is Based On 1981 Figures

5021 words - 20 pages

executive summaryNothing is more familiar on a construction site than the bright yellow heavy equipment manufactured by Caterpillar, Inc. Caterpillar Inc., headquartered in Peoria, Illinois, has dominated the world in earth moving, construction, and materials machinery for more than 50 years. Their global dominance; however, created a stagnant and risk averse environment. Komatsu, a leading Japanese competitor, had gained market share by offering low cost, high quality options in a variety of product lines while Caterpillar was busy raising prices in their existing product lines at an average of 10% per year. The key strengths of the company were its commitment to product innovation and its large loyal distribution base. The changing socio-economic conditions of the world could force CAT to change some of the ways they are doing business now and offer products that the customer requires rather that the manufacturer proposes. Developing countries are building highways, bridges, and waterways necessary to sustain economic growth. Caterpillar will need to ensure its product line can meet the growing demands of these countries. All the while, Caterpillar also needs to look at the United States market and identify pockets of opportunities. Small residential contractors or individuals may need heavy equipment for a shorter period of time to accomplish landscaping, moving earth.This report assesses CAT against competitors in its major operational business segments. The report compares the company's financial performance, geographical presence, products and services and business strategies with those of its competitors. The report also gives an insight into the competitiveness of the sector and identifies the gaps that could be exploited by the company. The assessment covers the growth trends in key business segments and provides information about the client base of the competitors.Finally a set of recommendations to Mr.Lee Morgan is provided which focus chiefly on the feasible breaking up of the international strategies CAT is following to incorporate elements of multi-domestic and global elements with a more competitor sensitive, socio-political environment sensitive strategies.1. COMPANY overviewIntroductionAs one of the Fortune 500, Caterpillar Inc. is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company is a technology leader in construction, transportation, mining, forestry, energy, logistics, electronics, financing and electric power generation. Caterpillar products and product support services are sold worldwide into a variety of highly competitive markets. Headquartered in Peoria, Illinois, Caterpillar is also a leading US exporter, with more than half of its sales outside the United States.1.2. Background/ History of the CompanyThe early innovation that set Caterpillar apart from its competitors was the use of treads on its tractors, a development that...

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