Caterpillar Case Analysis

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ABSTRACT:
In 2005, Caterpillar set out its vision for 2010 to become a $50 billion company. Deriving its business from industries that are cyclical in nature, Caterpillar adopted a strategy to generate profits during times of economic downturn. The company believes that the strength of its strategy lies in its remanufacturing division, which recycles old parts and engines and sells them to its clients at half the price of new ones.

ENVIRONMENT:
* Fortune 100 company
* One of 30 companies in the DJIA (DOW JONES INDUSTRIAL AVG.) index * Caterpillar specializes in the manufacturing of heavy vehicles for construction, agriculture, and mining * Customers:

* Engineering firms
* Construction companies
* Mine operators
* Product line:
* Earthmovers
* Road building machines
* Mining related equipment

EXTERNAL ENVIRONMENT:
* Slow down in growth
* Customer Loyalty
* Bargaining Power
* Dollar Value

INTERNAL ANALYSIS:
* MANAGEMENT
* MARKETING
* PRODUCTIONS/OPERATIONS
* RESEARCH AND DEVELOPMENT
* COMPUTER INFORMATION SYSTEMS
* FINANCIALS
PROBLEMS:
* To discuss the growth strategies of Caterpillar
* To discuss whether the company could depend upon remanufacturing for realizing its vision in the face of visible signs of slowing down of the global economic growth rate. STRATEGY FORMULATION:

Retrenchment of America
Political Instability
Economic Recession
Devaluation of Currency
Establish New Small Machinery Product Lines
Large Market
Low Barriers To Market Entry
Diversify Product Lines
Strengthen Brand Loyalty
Reposition Company Focus into Asian Market
Low Asian Market Share
Recent Joint Venture with Mitsubishi
Population Density
Infrastructure Development
Mining Potential
Current U.S. & China Relations
Increase Research Development
Current Joint Venture with Fuel Cell Energy Inc.
Stiffer Emission Laws
Demand for...
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