Assignment Content
- Review the Strategic Management Project Background and your strategic management research journal entries from Weeks 1–4.
Create a 10-slide presentation for Caterpillar Inc. leadership in which you summarize your key findings, propose recommendations, and provide rationale for your recommendations.
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Respond to the following prompts:
Summarize your evaluation of the alignment between what Caterpillar Inc. is currently doing and their mission, vision, or values statement. Would you propose any changes to Caterpillar Inc.’s mission, vision or values statements? Why or why not? (Refer to Wk 1, Bullet #4.)
Summarize your assessment of whether Caterpillar Inc. is leveraging the appropriate value and cost drivers for their business strategy. Would you propose any changes? Why or why not? (Refer to Wk 2, Bullet #3.)
Summarize your analysis of the strengths and weaknesses of Caterpillar Inc’s competitive advantages. Based on your analysis would you propose any changes? Why or why not? (Refer to Wk 2, Bullet #4.)
Summarize your assessment of whether Caterpillar Inc. is using the appropriate measures to verify its strategic effectiveness. Based on your analysis would you propose any changes? Why or why not? (Refer to Wk 3, Bullet #1.)
Summarize your evaluation of Caterpillar Inc.’s competitive position and how they have responded to shifts in the external and internal environments. Would you propose any changes in how Caterpillar Inc. responds to shifts in the external and internal environments? Why or why not? (Refer to Wk 3, Bullet #5.)
Summarize your evaluation of how mergers and acquisitions in the past 5 years have contributed to Caterpillar Inc.’s performance. Would you propose that Caterpillar Inc. pursue mergers and acquisitions in the future? Why or why not? (Wk 4, Bullet #2.)
Summarize your assessment of Caterpillar Inc.’s global strategy. Based on your assessment would you propose any changes? Why or why not? (Refer to Wk 4, Bullet #3.)
Include relevant media and visual aids on each slide of your presentation.
Use Speaker notes to communicate your response to each of the above prompts including citations.
Strategic Management Research Journal, Part 3
Sheroda Spearman
MGT 498
February 6, 2020
James Powell
1
2
Strategic Management Research Journal, Part 3
Assess whether Caterpillar Inc. is using the appropriate measures to verify its strategic effectiveness.
From my perspective, proper procedures are being used to substantiate its strategic effectiveness. According to Thompson (2016), Caterpillar is currently considered a global manufacturer of growth and mining hardware, diesel and petroleum engines, and current gas turbines. The mission of Caterpillar is centered around solutions to enable the clients to manufacture a better world (Thompson, 2016). Because Caterpillar’s focus is centered on value and not strictly profit, they have gained recognition as the high-ranking performer amongst other organization globally.
Quality is seen as one of the primary goals of the Caterpillar’s organization. While the company deems operation and executing as their way of life. This model is helpful in overseeing and regulating all methodology while keeping up benefits regarding profit making. Caterpillar is client focused, where its desire is to ensure that all customers’ needs are met with precedence. It also allows the organization to focus on core issues that may arise. According to Robertson (2015), the organization focus on building up an operative market which connects value, safety, interest and lean cost portions to work it at a prevalent circumstance in the market. Likewise, there has been a development in duty to additionally draw in clients through improved methods of tasks. At last, there is advancing toward making strong ground in the market. The objective is for customers to totally rely upon the company for high caliber items and management by streamlining their duties and filling in publicize gaps to set up steadiness and thusly relationship with customers will be strong.
The supply of quality products, institution of a scaled economy, and delivery of excellent products that are required in the market have influenced the success of Caterpillar Inc which has also worked in the organizations advantage over the years. The organization has been able to create a stock system that is the focal point of client’s needs, making it accessible across the globe. The items arrangement is likewise financially savvy, which has made a client rely upon and dependability while building up trust and potential development I what’s to come. Proceeded with responsibility with embellishment procurement has likewise been a driving component for Caterpillar Inc.
Summarize Caterpillar Inc.’s organizational structure
Caterpillar Inc. organizational structure entails a basic hierarchical structure. This form of structure is beneficial in guaranteeing that the organization’s practices, authentication methods, and offer of products runs well (Thompson, 2016). Moreover, management is encouraged to be assembled into a single line of operation making the task simple and effective.
Determine whether Caterpillar Inc.’s organizational structure is considered a traditional organizational structure or a Holacracy
Holacracy is viewed as the structure of organization for Caterpillar Inc. The organization is administered by a top managerial staff which is totally free and independent. The company has a panel that consist of outsiders who are not members. There is a general officer that supervises five presidents who are dispersed across operational regions of the organization who official title is known as the Chief Executive Officer. There is a total of 25 vice presidents that are under presidents that are gathered by the presidents. The VPs roles include managing offices, locales, focuses and displaying sites.
The organization has established a small committee that provide innovative ideas and are able to supervise the hierarchical leadership in the event of mismanagement, which in turn allows the company not to be totally reliant on hierarchical management. Decentralization of leadership was invented to create more concepts, ideas, and appeal more clients to the firm.
Detail why Caterpillar Inc. leadership should study and understand the company’s internal and external environments.
It is significant that Caterpillars Inc leaders understand the organization condition to guarantee sound managers and, in this manner, better execution. Managers must come together to have an understanding to inspire continuous execution. Once this accomplished, they can make an assessment and provide expectations because there is an understanding of the internal and external environment within the organization. Managers will also be able to pinpoint areas of improvements, opportunities, and plan for a better organization (Gumusluoğlu & Ilsev, 2019). A way for some organizations to guarantee the ability to sustain and perform consistently well in the market is for the managers to constantly take part in researching and identifying the environmental factors of the organization. For example, SWOT analysis amongst other forms can be used as research to assist in getting a result for the company. When a manager understands the position of the company, its establishment of goals, plan, and focus can be attained. Use of suitable resources has helped in understanding the environment of the organization. This incorporates guaranteeing that the organization is in good standings according to people in general by giving products that order quality and care. The concept of a better position anticipated by high performance is a key motivator for employees (Gumusluoğlu & Ilsev, 2019). Due to present circumstance in the market, resources are expensive however, the organization has had the option to eliminate that to guarantee that they do not lose clients from increased costs.
Evaluate Caterpillar Inc.’s competitive position and how they have responded to shifts in the external and internal environments
The main cause of Caterpillar’s having an upper hand is having a high caliber product. In its business, Caterpillar delivers top-notch machines, and this has given the organization a leeway over their rivals. It has additionally had the option to increase its upper hand through markets of size and its consistent stock system that the organization has worked during the years. By giving its clients a primacy and have chipped away at its stock framework, Caterpillar has had the chance to grow enormously. Clients depend on the products provided by Caterpillar because of their markets of size which allows them to produce a top-notch product that they sell at a lesser price. Lower cost additionally draws in plenty of customers who have assisted in the organization forming their status within the market. Caterpillar has formed equally its internal and external environment since its competitiveness is based on performance, quality, cost, and the type of assistance to clients.
References
Gumusluoğlu, L., & Ilsev, A. (2019). Transformational leadership and organizational innovation: The roles of internal and external support for innovation. Journal of Product Innovation Management, 26(3), 264-277.
Robertson, B. J. (2015). Holacracy: The new management system for a rapidly changing world. Henry Holt and Company.
Thompson, J. L. (2016). Strategic effectiveness and success: the learning challenge. Management Decision.
Week 1
· Bullet#1
Determine how AFI strategy framework acts as an integrative facilitator for strategic management planning.
· Bullet #2
Identify the guiding principles used for preparing effective statements that describe the mission, vision, and the core values of an organization.
· Bullet #3
Review the mission statement in Chapter 1 of Strategic Management: Concepts (p. 13), and determine whether the Caterpillar Inc. mission statement conforms to the description in the text. State the reasons the mission statement conforms or does not conform.
· Bullet#4
Research public information, such as news releases, financial reports, and marketing analyses. Based on your research evaluate the alignment between what Caterpillar is currently doing and their mission, vision, or values statement.
Week 2
· Bullet #1
Describe the role of strategic planning in achieving a competitive advantage.
· Bullet #2
Assess Caterpillar Inc. to determine whether their top focus is accounting profitability, shareholder value creation, or economic value creation.
· Bullet#3
Assess whether Caterpillar Inc. leverages the appropriate value and cost drivers for their business strategy.
· Bullet #4
Analyze the strengths and weaknesses of Caterpillar Inc’s competitive advantages.
· Bullet #5
Evaluate the influence of ethics, social responsibility, and legal considerations on strategic planning.
· Bullet #6
Discuss the value of corporate social responsibility (CSR), and determine if Caterpillar Inc.’s CSR meets those values.
· Bullet #7
Analyze the role of ethics and social responsibility in developing Caterpillar Inc.’s strategic plan while considering stakeholder needs and agenda.
Week 3
· Bullet #1
Assess whether Caterpillar Inc. is using the appropriate measures to verify its strategic effectiveness.
· Bullet #2
Summarize Caterpillar Inc.’s organizational structure.
· Bullet #3
Determine whether Caterpillar Inc.’s organizational structure is considered a traditional organizational structure or a Holacracy.
· Bullet #4
Detail why it is important for Caterpillar Inc. leadership to study and understand the company’s internal and external environments.
· Bullet #5
Evaluate Caterpillar Inc.’s competitive position and how they have responded to shifts in the external and internal environments.
Week 4
· Bullet #1
Identify Caterpillar Inc.’s short-term versus long term goals.
· Bullet #2
Evaluate how mergers and acquisitions in the past 5 years have contributed to Caterpillar Inc.’s performance.
· Bullet #3
Assess Caterpillar Inc.’s global strategy (international, multi-domestic, global-standardization, or transnational).
·
Bullet #4
Discuss the types of innovation Caterpillar Inc.’s uses such as radical incremental, disruptive, and architectural innovation. Identify types of innovation Caterpillar Inc. has used over time.
Research Journal Part 4
Sheroda Spearman
MGT 498
February 10, 2020
James Powell
Running head: RESEARCH JOURNAL PART 4
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RESEARCH JOURNAL PART 4
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Research Journal Part 4
In this week’s discussion about strategic planning, we discussed more corporate strategy. We learned that there are three scopes of corporate strategy which include vertical integration, diversification as well as geographic scope. We also learned the role of the company leaders in the strategic planning of the company. The discussion also touched on concepts such as tape, innovation integration global strategy and international strategy among many other concepts (Rothaermel, 2019). The main aim of these concepts is to help the company strategically plan for activities that will help the company grow. The concepts also help to align the company strategically with other companies. In this journal, I will discuss some of these concepts and how they apply to the company’s strategic planning.
Caterpillars Inc. short versus long term goals.
Caterpillars Inc. has created both short term and long-term goals to help grow the company. The short-term goals of the company are mainly key improvements in various areas are that enable the company to achieve its long-term goals. These short-term goals include improvements in renewable energy areas, water consumption intensity, reducing the number of recordable injuries, improving sales and revenues, and reducing the GHG emissions intensity in the next five years (Caterpillar Inc., 2019). The company also has long term goals that encompass the short term goals and this includes, reducing the energy intensity by 50 percent, reducing the emissions of the company by 50 percent, reducing the water consumption in the company by 50 percent and reducing the injury recorded rate in the company by 60 percent (Caterpillar Inc., 2019). All of these should be achieved in 5 years. The short term goals are the necessary steps that the company must take to achieve its long term goals. The main purpose of achieving the goals is to reduce the costs of operations, offer better products and reduce pollution to the environment.
Mergers and acquisitions contributed to the company’s performance.
The company has acquired three companies through mergers and acquisitions in the last 5 years. Two of the three companies acquired by caterpillar are from the private sector and have divested a total of 8 assets. These mergers and acquisitions have enabled caterpillar companies to increase their aggressiveness in the market place increasing its dominance in the global industrial market (Merger. 2019). It has helped the companies increase their value, improve their overall performance and has reached an increased growth in the regional and global market share and its products in the market. It has established a strategic market realignment in the company’s network helping it achieve more market shares and thrive well in the last 5 years.
The company’s global strategy
Global strategies in caterpillar Inc. are important in achieving the company’s global objectives and create an international expansion. The company has adopted four global strategies that consist of multi-domestic strategies that involve tailoring products and services to meet the needs of customers in a particular country (Potter, 2019). The international strategies involve creating subsidiary companies in various countries that operate like local companies with minimal supervision from the main company. The global standardization strategies that involve the production of standard products that are aimed at satisfying consumers from different part of the world. The last one is the transnational strategies that involve the production of goods that are standardized for everyone to use and also other products that are customized for use in specific areas (Potter, 2019). Through the applications of the four discussed global strategies, the company can reach a wider market and offer different products to many buyers around the globe meeting all their needs.
Types of innovations in caterpillar Inc.
The company applies the four different innovations to expand its business, increase efficacy and increase its profits. Using Incremental innovation, the company can utilize the technology that is already in use to improve the values of the existing markets to the consumers (Potter, 2019). To increase new consumers in the market, the company makes use of architectural innovation to apply different skills and technology in creating new products. The company also uses disruptive innovation to apply new technology in the existing or new markets (Potter, 2019). Finally, when creating a brand new product or industry, the company applies radical innovation to achieve these goals and bring brand new products in the market and revolutionary technology in the market. Through combining all the discussed innovations, the company can create new products that can meet the consumers’ needs. The main aim of applying these innovations is maximizing the global value of technology in producing quality products.
References
Caterpillar Inc (2019). Retrieved from https://www.caterpillar.com/en/company/strategy.html
Merger (2019). Retrieved from https://mergr.com/caterpillar-acquisitions
Potter, S. B. (2019). FactSet – Caterpillars Fortunes Are Tied to Those of The Global Economy. Retrieved from https://insight.factset.com/caterpillars-fortunes-are-tied-to-those-of-the-global-economy
Rothaermel, F. T. (2019). Strategic Management (4th ed.). New York, NY: McGraw Hill.
