Merger of C.L.

Best & Holt Caterpillar

World’s largest manufacturer of heavy equipment
Markets include construction, mining,
agriculture, forestry, and many others
Recent acquisition of Bucyrus
& Pyroban.
Competitors

Deere & Co.,

Komatsu Ltd.,
Joy Mining,
CNH Global,
International
Harvester.
CAT Logistics
•World-class supply chain
management
•Serves more than 60 global firms CAT Financial
•Aerospace, oil and gas, •Provide customers with a means of
industrial, and high tech financing equipment purchases
•Insurance provided as well
A world in which all people's basic requirements
- such as shelter, clean water, sanitation and
reliable power - are fulfilled in a way that
sustains our environment.
 Their mission is to enable economic growth
through infrastructure and energy development,
and to provide solutions that protect people and
preserve the planet.
Our strategy is to provide work environments, products, services
and solutions that make efficient use of the world's natural
resources and reduce unnecessary impacts on people, the
environment and the economy.

• Promote and protect individual safety and well-being

• Provide employment, education and training
• Minimize the use of energy, materials, water and land
• Maximize recycling
• Minimize emissions
• Optimize the use of renewable resources
World’s largest manufacture of earth moving equipment (EME)

The EME industry began in the late 1800’s with the development
of steam powered equipment
The demand for EME depended on the increase at which
machines were substituting manual labor.
Demand was higher in developed countries (US) Demand
structure changed due to the changing oil demands within the
Middle Eastern countries
This lead to an increase with construction activity
1981, the construction industry along with EME usage represented
nearly 70% of total dollar sales

Excavators, bulldozers, graders, loaders off highway tractors and

haulers

EME demand was doubling throughout 1973-1980’s

Mining / Construction industry -60% of the EME market

Low cost labor method created competition

EME Industry focused on improvements for existing products
 Differentiation strategy

Extending its markets globally- plants in over 8 foreign countries

Providing high-quality, extensive product line backed by efficient

service

100% ownership of its subsidiaries (resists joint ventures)

Recognizing opportunities in external environment (postwar

opportunity)
 Worldwide demand has doubled- expanding markets globally

Intensity of competition increases Understand these markets needs

and wants better. (Competitive analysis)

Less developed countries are increasing their rates of construction

activity

New opportunities to target new customers

Financing problems with LDC

Construction in the U.S is decreasing-less U.S dominated and less
concentrated in the U.S

Advanced developing countries are entering the industry and

increasing competitive competition

World contractors are becoming better placed than U.S

contractors to perform contract

Foreign companies are more flexible and easier to form joint

ventures with
Free from constraints such as the FCPA
 SAQIB
MEHMOOD
CAT responded effectively to the 1981 hardship, but not without
criticism from their former employees
They laid off a large percentage of workers, bringing about
enormous labor union strikes
CAT delegated the tasks of warehouse and production to outside
firms, rather than trying to battle the union
Instead of using their office workers for research and
development, CAT faced them directly in the factories
This allowed them to suspend innovation and save money on
labor costs
Throughout this hardship, 20,000 high-wage union jobs were lost
 PORTER FIVE
FORCES MODEL

SWOT ANALYSIS
 Operational Efficiency  Legal Proceedings
 Wide Product Base
 Extensive Distributorship
 Research and Design

 Emerging Markets  Environmental Regulations

 Inorganic Growth  Currency Rates
 Facility Expansion
 • CAT started its business operations in UK,
Europe, Brazil, Canada, Mexico and Australia
• CAT tried to enter Japanese market by joint
venture with Mitsubishi.

• Appointing the senior officials from headquarters.

• over the nearest competitor’s model

North and South America served by U.S,
Brazil, Mexico and Canada.

Europe, the Middle East and Africa served

by European facilities.

Far East receive its products from Japan,

Australia and India.
Caterpillar products and components are manufactured in 110
facilities worldwide.

51 plants are located in the United States and 59 overseas

plants are located in rest of the world.

Caterpillar products are distributed to end-users in nearly 200

countries through Caterpillar's worldwide network of 220
dealers.

As of the first quarter of 2006, 66% of Caterpillars sales are

made by one of the 63 dealers in the United States, with the
remaining 34% sold by one of Caterpillar's 157 overseas dealers.
 Corporate
Governance
CAT management had developed a “caterpiller village” in
geneva.

In 1981 CAT’S management constructed a training center

in down town peoria.

Caterpillar china was awarded the 2011 china sustainability

award in beijing
CAT financial brazil demonstrates social responsibility
throughout the year
Caterpillar environment, health & safety (ehs) policy
STRATEGIES IN 1981 STRATEGIES IN 2012

• Recover the benefits • Delivering superior

lost due to strike in results – earnings per
1979. share growth,
operating profit after
Affective response to capital charge and
the changing and cash flow
emerging competitive • Developing the best
environment team of people
• Becoming the global
To support the leader everywhere
employees of they do business
caterpillar.
Increased emphasis on mining side of the business because of the fact that emerging
markets will require coal and other resources.
Expand their dealership facilities into the Asia and Middle Eastern market

Enhance product reliability

Support customer relations through repair & maintenance scheduling

Develop relations with outside manufactures and designers

Launch rental and lease arrangements

Increase their production systems to reach the level of their competitors