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Caterpillar is the worlds largest manufacturer of construction and mining equipment. It serves a number of industries infrastructure, construction, mining, oil and gas and transport, the company is considered one of the most demanded in the global economy.
Caterpillar Inc.s Vision
Mission of Caterpillar Inc.
The companys mission is to promote and accelerate economic growth by developing infrastructure and energy. For such purposes, the organization produces equipment and machinery. In addition, the mission of Caterpillar Inc. is to provide solutions that support society and protect the environment.
Vision of Caterpillar Inc.
Caterpillars vision of growth sees a world where the basic needs of all people, such as housing, clean water, and reliable energy, are met in an environmentally sustainable manner.
Caterpillar Actions
In pursuit of its mission, Caterpillar launched the new GX excavator line in China in November 2020, which customers have received well. The GX series delivers up to 15% less fuel consumption than previous models. It also offers 25% lower maintenance costs (Caterpillar, 2020). This aligns with the companys mission to care for the environment and innovate.
The company first showcased some of its mining technology at the Consumer Electronics Show. It showed Cat MineStar, a set of technologies that are used in autonomous trucks. Customers have achieved productivity increases of up to 30% with zero human injuries (Lasley, 2021). This is in line with the companys vision of the quality of peoples work.
Mission and Vision Change Recommendations
Switching to alternative fuels
In the heavy engineering sector, alternative fuels can contribute to decarbonization almost immediately. According to Emery (2022), expanding the use of these renewable fuels is the fastest way to maximize the reduction of carbon emissions. This will make the construction process more environmentally friendly.
Increasing the gap from competitors
The market analysis technique helps to identify the shortcomings of business processes that hinder sales and find ways to solve the problem. Corrective proposals can become new goals: to find distributors to expand the dealer network and increase sales.
Investments in robotics
Over the past decade, the number of companies involved in robotics and business process automation has increased dramatically. By investing in robotics, corporations are striving to produce goods more efficiently and reduce lead times.
Caterpillar Inc.s Competitive Advantages and Disadvantages
Caterpillar benefits come from free trade. Free trade requires a company to continually improve its global competitiveness and creates an environment that helps us better respond to our customers needs and grow profitable businesses. The Company takes a proactive approach to identifying, assessing and managing the risks that have the greatest impact on our business.
Current lockdowns in some regions of Europe may limit construction and infrastructure activities in the short term. Seasonality and current uncertainty in the oil and gas industry. All this can have a negative impact on the financial results of the company. One of Caterpillars problems is that when oil prices fall, investment and exploration of new sources of oil also falls.
SWOT analysis of Caterpillar Inc.
STRENGTHS: Retailers, Brand loyalty, Brand longevity, Global, Industry diversity, Market leader, Innovation
WEAKNESS: Dependence on US market (40+%), Weak marketing, Gaps in product range, Competition, Reduced profits, High attrition rate in work force
OPPORTUNITIES: New technology, Stable cash flow, New markets, Emerging markets, Backward integration, Global recovery from COVID, Integrations with legacy equipment
THREATS: Competition, COVID, Multi-country regulatory pressures, Cost of raw materials, Multiple competing brands, Marketing in developing countries
Caterpillars Strengths
Caterpillar has been around for about 100 years and has nearly 4,000,000 products in service around the globe. The next metric that stands out is the companys brand loyalty. Caterpillar has a Net Promoter score of 41 (Customer.guru, 2022). Generally, any score above 0 is a good score. Although 41 is not considered a great score, great scores start at around 50. A few other Caterpillar strengths would be its market leadership and their innovation. Among the companys strengths, one can highlight the fact that Caterpillar is a well-known brand trusted by millions of users.
Evaluating the Weaknesses and Threats
A few common themes can be found to evaluate the weaknesses and threats. The most significant common theme would be competition. Because of the competition in the market, it is reasonable to assume that Caterpillars market share will also decline, further reducing profits. Two other issues affecting Caterpillar are their weak marketing and their most loyal customers, the baby boomers retiring. These two issues could result in a further decline in market share. According to Momin (2022), Good marketing strategies play a vital role in the success of a business. Caterpillar is a giant in the construction-equipment industry, and its marketing strategies are not up to the mark. In sales, the companys customers buy cycles, allowing product teams to properly order and inventory the projected products. One of the threats to the company is that taxation and legislation puts a lot of pressure on all areas of the company.
Comparing Strengths against Opportunities
Markets that are just beginning to take shape can see an increase in investment in development and infrastructure. A rise in population, migration to cities is driving the construction equipment market growth in Asia and other regions. Pratap (2021) states, The emerging economies are at the core of most of the new growth opportunities before Caterpillar Inc. The global economy is constantly changing, and Caterpillars market leader is uniquely positioned to take advantage of this growing opportunity. Although it can be listed as a surplus of inventory as a weakness if taken advantage of. Because of the supply chain issues of many of their competitors, this could quickly turn into a strength and opportunity for Caterpillar.
Problem-solving strategies to address Caterpillars weaknesses or threats
Some of the weaknesses could be mitigated by investing in their employees. This would allow Caterpillar to retain top talent. Another weakness is the dependence on U.S. markets and sales. Because of their global reach and capital, it should be easy to drive adoption in other regions if they increase marketing and customer outreach in those developing areas. The global economy recovering from COVID-19 and their surplus of inventory being able to deliver products quickly to recovering or growing economies should be a focus.
Caterpillars Global Strategy
Caterpillars strategy is turning todays innovations into new opportunities for customers to achieve long-term and sustainable results in the future. This means that the team is looking for and developing technologies that help customers achieve their goals successfully (Caterpillar, 2017). To improve the productivity and efficiency of the company, the organization should make some changes to the global strategy of Caterpillar Inc. First, it will be helpful to focus goals on environmental friendliness. In addition, an essential aspect of the strategy may be a deepening in the energy sphere. This is a practical solution because it will help expand the reach of users and conclude contracts with the state.
References
Caterpillar. (2020). Cat® GX new classic excavators bring more benefits to China customers. CAT. Web.
Customer.guru. (2022). Caterpillar net promoter score 2022 benchmarks. Caterpillar Net Promoter Score 2022 Benchmarks. Web.
Emery, I. (2022). Pathways to net-zero ethanol: scenarios for ethanol producers to achieve carbon neutrality by 2050. Informed Sustainability Consulting. Web.
Lasley, S. (2021). Cat shows off techier side at CES 2021. Metal Tech News. Web.
Momin, A. (2022). Caterpillar SWOT analysis 2022. PESTLE Analysis. Web.
Pratap, A., & Pratap, A. (2021). Caterpillar SWOT analysis. Notesmatic. Web.
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