Caterpillar Inc. was formed in 1925 when Holt Manufacturing Company and the C. L. Best Tractor Co. merged to form Caterpillar Tractor Co. These two companies were formed by Benjamin Holt and Daniel Best, thus the two founders of Caterpillar. Throughout their history, Caterpillar has continued to update and diversify their product lines to meet the demands of consumers. In 1931, the first Diesel Sixty Tractor rolled off the assembly line in East Peoria, Illinois, offering a new efficient source of power for track-type tractors. In 1940, the Caterpillar product line grew beyond just track-type tractors to include motor graders, blade graders, elevating graders, terracers and electrical generating sets. In 1950, Caterpillar established its first of many overseas operations in Great Britain. In 1953, the engine sales group of Caterpillar was restructured to include a separate sales and marketing division to better serve the needs of a broad range of engine customers. This division now accounts for approximately one-third of the company’s sales and revenues. In 1983, Caterpillar Leasing Company is expanded to offer equipment financing options to its customers worldwide and is renamed Caterpillar Financial Services Corporation. In 1986, Caterpillar Tractor Co. changed its name to Caterpillar Inc., which serves as proof of the growth and diversity the company had accomplished over the years. In 1998, Caterpillar introduced the world’s largest off-highway truck, the 797. And finally, in 2003 Caterpillar became the first engine manufacturer to offer a complete line of diesel engines fully compliant and certified by the U.S. Environmental Protection Agency (EPA).(8)
Caterpillar is now the world’s largest manufacturer of earthmoving machinery and construction and mining equipment, and is a leading supplier of agricultural equipment. They offer more than 300 products to their customers, and are made up of three divisions: machinery, engines, and financial products. The machinery division is concentrated on the design, manufacture, marketing, and sales of their wide variety of earth moving machinery. The engine division is concentrated on the design, manufacture, marketing, and sales of their wide variety of engine products. The financial products division provides a range of financing alternatives to customers and dealers. Caterpillar is traded on the New York Stock Exchange under the ticker CAT.(3)
Although Caterpillar is a global leader in its sector and has a worldwide presence, rising material costs and other factors can have an impact their profitability. Thus, Caterpillar has strengths, weaknesses, opportunities, and threats, just like any other global leader. Caterpillar has many strengths. First, Caterpillar is a global market leader. Currently serving customers in more than 200 countries, Caterpillar is a global market leader.(7) In fact, Caterpillar was recently named number 66 of Business Week’s 100 Best Global Brands.(1) A major strength of Caterpillar Inc. is that they are at the head of their industry. This competitive advantage is achieved because of their long standing reputation for quality products and services, and because of their position as a leading manufacturer and service provider in their industry. Next, Caterpillar also serves a diversified geographical spread, which is a great strength to have. Caterpillar, Inc. generates revenues from most of the significant markets in the world, therefore not relying on a specific economy. In 2008, 67% of its revenues were generated from markets outside the U.S.(5) Diversified operations provide flexibility to the cash flow and also protect the company against recessions in a particular economy.(5) Caterpillar, Inc maintains a strong presence in markets such as Europe and the Middle East, and is rapidly increasing its business in developing markets such as China and India. Also, Caterpillar has a mix of business, which reduces earnings...
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