Introduction
Strategic management is constantly planning, monitoring, analyzing, and assessing all requirements that a company requires to accomplish its goals and objectives. Organizations will have to reevaluate their success methods regularly due to changes in the business environment. The strategy implementation process aids businesses in taking stock of their current condition, developing and implementing management plans, and evaluating their efficacy (Ansoff, 2018). Thus, the paper aims to analyze their strategic management, organizational structure, internal and external factors, and competitiveness and suggest recommendations for operational change.
Measures for the Strategic Effectiveness
If a company’s strategy supports organizational objectives and provides a strategy for achieving them with the resources at hand, it may be deemed effective. The corporation uses the Operating & Execution Model, allocating resources to those business sectors that result in greater growth and earnings for the organization (Caterpillar, n.d.). The business’s strategy calls for enhancing customer service and product quality and expanding its offers to meet these objectives (Caterpillar, n.d.). Caterpillar’s approach may be seen as successful because it supports its objectives.
Organizational Structure
The organizational structure of Caterpillar Inc. makes it possible for the business to create, produce, and transport its goods to clients, including heavy machinery and construction machinery. The CEO of Caterpillar, who also serves as the President of the Board of Directors, is in charge of the business (Caterpillar Inc. standards, 2018). The board comprises several group presidents who manage the efforts of numerous vice presidents in charge of Caterpillar’s activities in various industries and regions. After some reorganizations, a bottom-up management strategy was established, enabling staff to contribute to the creation of strategic projects and enhancing customer service. Particularly with the reform, Caterpillar’s operational plan can be characterized as a holacracy. Caterpillar is split up into numerous divisions that operate in various areas, which enables teams to self-organize and carry out certain activities related to their area of competence.
Internal and External Environments
Since Caterpillar Inc. does not function in a vacuum, the organization’s leadership researches and comprehends its internal and external contexts. The organization learns about its core competencies, such as good quality, to continuously improve the work and prosper in the future. The leadership team at Caterpillar is aware of the company’s advantages in responding to problems and maintaining a competitive edge. The company’s sector and the competitive factors in this industry create the external environment (Ansoff, 2018). The leadership team at Caterpillar understands the market trends and rivals, anticipates risks, and spots opportunities that will guarantee continued corporate success.
Competitive Position
Caterpillar competes in a fiercely competitive industry, and the rivalry is intense abroad since laws and fluctuating currency exchange rates could make Caterpillar’s products less cost competitive. Nevertheless, Caterpillar successfully addresses these environmental problems by concentrating on the superior quality of its goods and enhancing customer support. Regarding the internal ecosystem, the business creates new goods that will cater to changing consumer wants while utilizing its assets and core skills to enhance the value of its current offerings.
Recommendations for the Operational Changes
Caterpillar may think about creating new items to broaden its product offering and provide fresh approaches to consumers’ issues that would outperform rivals in terms of ease and quality. It would assist in achieving its strategic objective of future market expansion and growth (Ansoff et al., 2018). By maintaining its competitive advantage, it would also serve as a guide for the company’s future business decisions and enhance its performance of the business.
Conclusion
Overall, to achieve these goals, the company’s plan calls for improving the quality of its products and services and customer service. Due to its decentralized nature, Caterpillar’s organizational structure may be described as a holacracy. The leadership team at Caterpillar is aware of market trends and competitors, and they also foresee dangers and identify possibilities that will ensure the company’s internal and external success. Caterpillar can consider developing new products to diversify its line-up and give novel solutions to consumer problems that would beat competitors in terms of functionality and quality. It can help in achieving its strategic goal of future market expansion and growth.
References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting strategic management. Springer.
Caterpillar Inc. guidelines on corporate governance issues. (2018). Caterpillar. Web.
Caterpillar’s Strategy. (n.d.). Caterpillar. Web.