SuperRain8265
1. Can you provide references for the essay below? 2….
1. Can you provide references for the essay below?
2. Can you suggest corrections?
Caterpillar is the biggest manufacturer of earth moving equipment and engines in the world.
Founded in 1925 Caterpillar has grown steadily into the global leader in the industry. Its
nearest competitor Komatsu has less than half the sales of caterpillar. Caterpillar’s mission
is to provide best value to customers, grow a profitable business, develop, and reward
(“Caterpillar Mission & Vision Analysis – Mission Statement”)
people, and encourage social responsibility.
Caterpillar’s vision is to be the global leader in customer value. (“Caterpillar Inc. Vision,
Mission, Intensive Strategy, Five Forces, SWOT”) Caterpillar’s corporate
strategy is not designed solely to grow the business but to invest in areas with the most potential
to create value. To accomplish this, Caterpillar uses an Operation and Execution (O&E) Model.
Caterpillar values in action include integrity, excellence, teamwork, commitment, and
sustainability. Caterpillar was recently named to Barron’s 100 most sustainable US companies.
Caterpillar has no geographic target area but leverages its immense resources to provides a
wide range of equipment and machines on every continent. Caterpillar has a decentralized
organizational structure with three strategic business units: construction, resource, energy and
transportation. It automated and streamlined its manufacturing
processes. It invests significantly in research and development. Its products are unmatched in
quality and reliability.
Caterpillar develops products that serve each market and region’s specific needs. Caterpillar is
focused on innovating high-tech “green” machinery for every industry that it competes in.
Caterpillar’s products range is immense. Caterpillar has over 300 different machines for sale. Its
product serves eight industries. It not only sells but also provides aftersales support with an
extensive dealer network.
Caterpillar distinguishes itself from its competitors with the quality and range of its products.
Caterpillar ranks number one or two in every industry that it serves. Its distinctive yellow
machines are universal and have helped make the brand a U.S icon.
Caterpillar operate a high cyclical business that is susceptible to recession, high prices,
inflexible bureaucracy. Despite its global presence, over 40% of revenue is from North America.
Caterpillar has identified emerging markets as opportunities for growth. Caterpillar faces
constant threats to its market share from global competitors like Komatsu and John Deere.
.
Analysis
Caterpillar Inc is an American corporation that designs, manufactures, and sells machinery,
financial products and insurance. The company was founded on the 15th of April 1925 in
California as the Caterpillar tractor company by merging Holt manufacturing company and CL
Best tractor company. Caterpillar went from a tiny tractor company with a single product to an
international brand with massive array of distinctively mustard colored equipment.
Jim umpleby is the current CEO of Caterpillar and their headquarters is located in Irving Texas
USA.in 2022, there are 109100 employees working for Caterpillar worldwide. Caterpillar’s
revenue for the twelve months ending December 31, 2022, was $59.427B, a 16.59%
increase year-over-year.
Caterpillar is the world’s largest construction and mining equipment manufacturer and
Caterpillar machinery is especially recognizable due to its unique trademark Caterpillar yellow
and the CAT logo. Caterpillar made one pink tractor for a female dealer in support of breast
cancer movement. There are more than 4 million products at work around the world.
Caterpillar has a catalogue of over 300 products that sells through its dealer network. These
includes construction equipment, mining equipment, diesel, and natural gas engines, industrial
gas turbines and diesel electric locomotives. Caterpillar moves more than 50% of rock
and aggregates in the world’s quarries.
The company also manufacturers smartphone for industrial applications. These phones can
survive extreme weather, temperature, rough handling and even function 15 feet underwater for
one hour. Caterpillar has an apparel line which produces durable and high-quality clothes and
shoes.
Caterpillar was ranked number 65 on the Fortune 500 list and number 238 on the Global
Fortune. (“Caterpillar Inc. (CAT) Stock Price & News – Google Finance”). It is ranked 44 on
Fortune world’s most admired company. It may be considered a blue-chip company, but it had a
turbulent decade from 2010-2020.
In the early 2010, Caterpillar pumped up production especially of mining equipment. It
spent $8.8 billion to buy a mining equipment company Bucyrus international. Unfortunately,
around 2012 commodity and energy prices started falling and Caterpillar was left with excess
inventory and production capacity. It suffered years of falling sales and was forced to eliminate
thousands of jobs in 2015. 2012 -2016 was the worst period in almost 100 years of operations.
Even though its recovery was affected by the COVID pandemic, Caterpillar is experiencing a
turnaround since 2021 due to a surge in prices of copper, iron ore, oil, and gas. These rising
commodity prices have fueled demand for mining equipment. Caterpillar has other plans that
could stimulate a lot of growth. New technologies could add value for customers and distinguish
its product from competitors. These include vehicles and equipment that can be piloted remotely.
The self-driving and autonomous technology may facilitate safe use of machinery especially in
the mining industry.
A potential area for growth for caterpillar is in services. Caterpillar plans to
double services revenue to $28 billion. It plans telematics preventative maintenance messages
sent to customers to remind them about repairs or replacement of equipment. Its remanufacturing
initiative saves up to 80% in raw material and lowers costs up to 60% without compromise in
quality. This helps to deepen relationships with customers and keep them coming
back.
Caterpillar is making moves that can further distinguish it from competitors. There are few
companies that can match it in terms of brand recognition. John Deere which is mostly
known for farming equipment but has a brand name with high degree of recognition and
customer loyalty to Caterpillar.
The Japanese manufacturer Komatsu also has a huge global presence in earth moving
equipment. Komatsu is second to Caterpillar in construction and mining equipment globally.
There are a lot of smaller construction equipment makers globally especially in developing
markets as China. These smaller companies may beat Caterpillar in markets where customers
are more price conscious.
Caterpillar has a long history of partnership with the government. It won over $1.2 billion
in contracts with the department of defense in 2022.It is poised to take advantage of “The
Inflation Reduction Act “of 2022 with massive government investments in domestic energy
Production, the “Build Back Better Act” with emphasis on clean electricity standards and the
“Infrastructure Investment and Job Act”.
Caterpillar ACT automation,connectivity and is caterpillar’s strategy
Caterpillar has a high employee attrition rate. It has had labor related problems. It has been
accused of forcing employees to work overtime and to work on weekends. Industry
watch groups criticize Caterpillar for giving investors $6.7 Billion while demanding concessions
from workers (Class struggle WSWS.ORG Shannon jones 9/3/2023).
Caterpillar has been accused of unfair tax practices. It used offshore subsidiaries in
Bermuda and Switzerland to siphon profits and avoid US taxes. It triggered a congressional
hearing. Caterpillar recently announced a settlement with the internal revenue service.
Caterpillar had a poor safety rating. In 2003, it redesigned a vision for safety with a goal of
zero injuries. The Caterpillar Vision Zero safety program was launched in 2007. By 2010, 40%
of all its facilities has zero injuries. In 2011, it was named America’s safest company.
Recommendations
Caterpillar inc should have a large cash reserve as it operates in a very cyclical market. It needs
to plan for cycles
Caterpillar should consider equipment rental as a way to expand its customer base and revenues
Caterpillar needs to invest more in the welfare of its employees to improve morale
