Caterpillar Inc., like other successful companies, resorts to making short and long-term goals to assure the necessary progress in its operations. The short-term mission of the company is expressed by dividing it into individual goals in areas such as operations and product management. The long-term goal of Caterpillar Inc. is continuous profitable growth, which will enable the company to increase its investment in its products and services (Liou & Rao-Nicholson, 2021). This factor will strengthen the position of the corporation in the world market. Additionally, the company’s management strives to provide its customers with the best solutions for building a better world.
The effectiveness of the operating plan is to reduce local injuries, energy intensity, greenhouse gas emissions, and water consumption. In addition, the company’s operations in achieving the goals offer an increase in the use of alternative energy sources. Caterpillar Inc. is committed to providing leadership in manufacturing safety and the workplace for employee comfort through state-of-the-art innovation. This move allows the corporation to operate and manage its products efficiently. One of the company’s leading goals is to “increase managed fleet performance by 100 percent, compared to 2013” (Liou & Rao-Nicholson, 2021). The factors mentioned above suggest that Caterpillar Inc. primarily focuses on growth and sustainability as part of its international strategy in the marketplace.
The Contribution of Mergers and Acquisitions by Caterpillar Inc.
The path to achieving strategic goals and gaining market advantages includes vital merger and acquisition decisions with other businesses. Caterpillar Inc. has acquired about 30 companies throughout its history, the last three of which became part of the corporation in the last five years. Acquisitions of this nature have helped to improve the company’s efficiency and help achieve organizational goals (Liou & Rao-Nicholson, 2021). For example, purchasing a company such as Kemper Valve & Fittings Corp. helped expand the product line by saturating the service industry with products. A merger with such a company as Yard Club has led the corporation to technological innovation and organizational plans. Using the best qualities of companies Caterpillar Inc. bought or merged with significantly strengthened its position in the global market.
Most Important Acquisition
One of the most significant acquisitions for Caterpillar Inc. is Bucyrus International, which joined the corporation in 2011. This acquisition was a conduit for the most efficient operation of the company and the successful realization of its goals. The purchase of Bucyrus International reduced pressure from competitors, particularly Komatsu (Liou & Rao-Nicholson, 2021). This phenomenon confirms that mergers increase differentiation and reduce costs and competition. The acquisitions effectively expanded Caterpillar’s product range to include large mining equipment. The deal’s success is underscored by the friendly deal that allowed the merger to occur most conveniently and efficiently.
Effectiveness of Caterpillar’s Operating Plan for Global Strategies
The effectiveness of the global strategy is underscored by the fact that the operating plan enables the company to achieve critical organizational goals. Each company is free to choose one of its global strategies when they plan to promote its products worldwide. The company chose the transnational strategy because it combines high on-the-ground responsiveness with pressure to reduce costs. In any of the markets around the world, Caterpillar Inc. feels like a local company that creates culturally and geographically relevant products (Liou & Rao-Nicholson, 2021). A vast network of dealers and factory facilities worldwide help keep costs down for products and services. This strategy is a practical investment for Caterpillar because it allows it to maintain a strong market position.
Reference
Liou, R. S., & Rao-Nicholson, R. (2021). Multinational enterprises and sustainable development goals: A foreign subsidiary perspective on tackling wicked problems. Journal of International Business Policy, 4(1), 136-151.