Part 2:
Assignment Content
Strategic management includes an analysis of a business’s current state. Continuing with your research of Caterpillar, Inc., you will leverage the business SWOT tool to identify and drive organizational strategic decision making and evaluate problem-solving strategies for the company.
Review the Strategic Management Project Background document.
Create a Word doc and title it Strategic Management Research Journal Part 2.
Write a 350- to 525-word response to the following prompts in your journal entry:
Conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of Caterpillar, Inc. Each SWOT quadrant must contain 7-10 items, (this is not included in the 525-word count).
Analyze Caterpillar’s strengths and include specific examples based on your SWOT analysis findings.
Evaluate the weaknesses and threats for any common themes that might be a risk.
Compare Caterpillar’s weaknesses against its opportunities.
Propose problem-solving strategies to address Caterpillar’s weaknesses or threats that could be mitigated by a business opportunity or business decision.
Note: You will use information from this entry in your presentation due in week 5.
Submit your assignment.
ANSWER
Analyze Caterpillar’s strengths and include specific examples based on your SWOT analysis findings
The above quadrant represents Caterpillar’s SWOT analysis. Caterpillar Inc.’s greatest strength is its global presence. Caterpillar operates in the United States and other countries in Asia, South America, Africa, and
the Middle East. Caterpillar Inc. has leveraged technology for machine operations, e-commerce, financial products, and operations (Caterpillar 2021) . This way, it can track global operations, collect and store data and fulfill obligations with suppliers and customers better. Caterpillar benefits immensely through collaboration with dealerships and suppliers; this is one of the reasons why it has a global outlook.
Caterpillar has a strong brand image and has formed its reputation by selling genuine and durable machinery, parts and components, and technologies for construction, oil well services, and mining. The organization has been in operations since 1925 and has grown in experience, established relationships, and survived through notable economic changes (Caterpillar 2021). Strong leadership has made Caterpillar a global business name. Years of investment in employees and customers have guaranteed Caterpillar its financial success, which has been one of the most significant driving forces for its global success.
Evaluate the weaknesses and threats for any common themes that might be a risk
The organization’s slow innovation has exposed it to threats. Caterpillar faces competition from other similarly established firms with similar business models such as Komatsu, CASE, and Deere (Caterpillar 2021). Its slow innovation has also contributed to reduced revenues. Caterpillar’s primary product offering is in heavy machinery and parts; such overreliance has exposed it to uncertainty. The global environment seems to have overcome the worst part of the pandemic. However, individual and corporate customers are still skeptical about the future of construction, which is Caterpillar’s primary market.
Compare Caterpillar’s weaknesses against its opportunities
Caterpillar’s weaknesses can be solved by implementing solutions presented by the opportunities. For example, Caterpillar’s reduced revenues in 2020 could have been anticipated through big data technology and corrective measures taken. Over the years, Caterpillar has invested in acquisitions of key strategic partners such as ECM spa, which deals with the management and operationalization of railway infrastructure (Caterpillar 2021). Further investment in acquisitions can help diversify financial and operational risks (Dilshad 2013). Acquisitions can also give Caterpillar access to new talent to boost its human asset base. Acquisitions can also address part of the threat posed by competition.
Propose problem-solving strategies to address Caterpillar’s weaknesses or threats that could be mitigated by a business opportunity or business decision
Automation technology can help increase employee safety, a significant concern in the 2020 report. In 2020 the organization recorded its best statistics in terms of employee safety (Caterpillar 2021). Part of this could have been due to reduced activity due to the pandemic. Automation and robotics are effective tools for analyzing processes for employee safety (Huck et al., 2022). The marketing strategies have not been yielding the best results. The 2020 report shows that the organization relied on dealerships for the majority of its marketing activities (Caterpillar 2021). Caterpillar can take advantage of the emerging markets and place itself strategically to benefit from new customer bases. The data-driven solution can help the organization have more efficient processes. Caterpillar already uses lean processes as a cost management strategy (Caterpillar 2021). However, big data and process analytics can help clarify process metrics and provide more information to support technical and operational decision-making. Caterpillar notes the significant threat posed by cybercrime (Caterpillar 2021). Adopting more cloud-based computing solutions can help improve communication and provide better security against threats (Miloslavskaya & Tolstoy 2019). However, Caterpillar would also need a backup system to ensure minimal disruption, downtime, and continuity of core activities in case of a security breach.
References
Caterpillar Inc. Annual Report 2020. (2021). Caterpillar.Com. https://reports.caterpillar.com/ar/2020_Caterpillar_Annual_Report.pdf
Dilshad, M. N. (2013). Profitability Analysis of Mergers and Acquisitions: An Event Study Approach. Business and Economic Research, 3(1). https://doi.org/10.5296/ber.v3i1.2781
Huck, T. P., Ledermann, C., & Kroger, T. (2022). Testing Robot System Safety by Creating Hazardous Human Worker Behavior in Simulation. IEEE Robotics and Automation Letters, 7(2), 770–777. https://doi.org/10.1109/lra.2021.3133612
Miloslavskaya, N., & Tolstoy, A. (2018). Internet of Things: information security challenges and solutions. Cluster Computing, 22(1), 103–119. https://doi.org/10.1007/s10586-018-2823-6
