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Paper Topic:

Caterpillar Case Study


Running Head : Caterpillar Case Study


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Caterpillar Case Study

Brief History

The founders of Caterpillar Inc . Benjamin Holt and Daniel Best were already building their own separate businesses in the 1890 . They were researchers that experimented with various types of steam tractors for use in farming . In 1925 , the Holt and Best companies merged to form Caterpillar Tractor Co . Until 1942 , the company displayed tremendous growth in both product lines and market share . In 1950 , the company performed

its first foreign investment in Great Britain , quickly followed by many more foreign investments . The company performed its first joint venture activities with the Japanese in 1963 , and continues to expand their product lines

After 50 years of operations , the company has proven themselves to be the undefeated champion of the industry , and continue expanding their business with help of their Caterpillar Financial Services , formed in 1981 . The company has a wide range of business network worldwide and able to maintain commitment of quality with each of its customer . The company used premium-`value for money ' strategies that have seem to bring the company almost to a level of invulnerability . theless , the world recession catch up with the company in 1983 , causing leaders to company to rethink their entire business strategies


II .1 The Nature of Caterpillar 's Position

The heavy equipment industry is a capital intensive industry with considerable amount of barriers . In a sense , new ventures inside the industry would have to face serious challenges before they could compete in the same market as the leaders of the industry . Furthermore Caterpillar Inc is protected by its legacy of customer satisfaction for decades , causing it to have strong relationship with numerous markets which provided the company with considerable share of business

Caterpillar 's commitment to quality -rather than by pricing strategies- maintain the company 's strong position in its international markets Caterpillar 's strategy of premium prices reveals this tendency . In simple terms , the company is able to earn considerable profit and maintain its market share , despite the prices of their products which are slightly higher than average . All the factors mentioned above increase the strength of corporate presence in international markets

One of the factors that contributed to Caterpillar 's success over the decades is its key managerial strategy . Management of Caterpillar Inc was top-down in nature . In the sense that all considerations and managerial decisions are made by the to level managers . The top level managers consist of six key people , they are the CEO , COO , and executive vice presidents of marketing , manufacturing , engineering and science However , although their contributions in decision making is vital , the CEO would remain as the strong figure that stated the final decision . In a sense , this managerial style is intimidating for the lower level employee , but retain them in their highest performance for the sake of the company

Other feature of their strategy is the tradition of not sparing any expenses when it...

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