Goals
Short-Term
Caterpillar Inc. is a global leader in the production of construction and mining equipment, power generation equipment, and diesel and gas engines. The firm has many short- and long-term goals that are distinct from its vision and purpose. One of Caterpillar Inc.’s short-term aims is to enhance its market share in the many industries in which it operates. Another short-term aim may be to raise earnings by a given percentage over a year (Hughes, n.d.).
Long-Term
Caterpillar Inc.’s long-term mission is to constantly create new products and technology. To enhance efficiency and decrease environmental impact, the organization may aim to produce new green construction equipment or new energy solutions (Hughes, n.d.). Another long-term goal may be to expand the company’s geographic footprint, such as entering new markets and establishing its own manufacturing bases.
Mergers and Acquisitions
Bucyrus International
Caterpillar Inc. has undergone several mergers and acquisitions over the past 3-5 years, affecting its performance and organizational goals. One of the most significant mergers was the 2011 merger with Bucyrus International (Pope, 2019). This acquisition allowed the company to expand its mining equipment range and strengthen its market position. As a result of this merger, the company was able to offer its customers a wider range of products and expand its market share in the mining equipment sector.
Progress Rail Services
Another important merger of Caterpillar Inc. was the 2006 acquisition of Progress Rail Services (Pope, 2019). This acquisition strengthened the company’s position in the railroad equipment sector and expanded its global customer base, enabling it to offer its customers a full range of products and services in the rail transportation sector.
Implications
The purchase of Bucyrus International, which was valued at around $8.6 billion (including net debt) and paid for with cash on the company’s balance sheet and debt, is the most significant M&A that helped Caterpillar enhance performance and accomplish its organizational goals (Pope, 2019). Through this acquisition, the business was able to improve its market position and broaden its skills in the mining equipment industry. By providing a greater variety of goods and services to its clientele, the business was able to grow its market share and boost earnings.
Global Strategy
Type
Caterpillar Inc.’s global strategy is multinational. The corporation is in over 180 countries and provides its goods and services worldwide (Hughes, n.d.). The corporation tailors its goods and strategy to local needs and geographical differences. Caterpillar Inc.’s global network of manufacturing locations is an example of a multinational strategy in action. The corporation has production sites in several countries to accommodate local demand and cut logistics and delivery costs. For example, to fulfill demand in various regions, the corporation has production facilities in the United States, Germany, China, and other nations (Hughes, n.d.).
Effectiveness
Caterpillar Inc.’s worldwide strategy is effective. The firm has succeeded in foreign marketplaces and has increased its market share in several fields. Research and data confirm the company’s success in achieving its organizational goals and meeting the needs of customers around the world (Hughes, n.d.). For instance, the company has high customer appreciation and a reputation internationally. The company also invests in research and development of new products and technologies, which enables it to remain competitive in the global market.
References
Hughes, J. (n.d.). Caterpillar Competitors Analysis [2021]: 5 Biggest Competitors – Business Chronicler. Business Chronicler. Web.
Pope, S. (2019). Caterpillar Innovates as Competition Escalates. Web.