Caterpillar Inc.--Early 1990s

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Recommended: Development of marketing strategies and plans

Caterpillar Inc.--Early 1990s

The assessment of opportunities and threats is the foundation upon which planners develop strategies. The Caterpillar case illustrates some of the problems associated with the identification of opportunities and threats, especially in a situation where previous successes are notable. Attempting to pattern long-term growth on the basis of previously valid assumptions is one of the classic dilemmas facing the strategic planner whether in consumer or organizational markets.

In addition, the shareholders at the big three automakers have sometimes had to force necessary changes.

Evaluate Caterpillar Inc.'s marketing and management strengths and weaknesses.

Caterpillar's Strengths:

* Product-orientation, widely recognized, technologically superior product line; immediately integrating latest advances.

* Most extensive dealer-service-parts network in the industry; recognized as one of the most important reasons for buying Caterpillar equipment.

* Market share leader for earth-moving machinery.

* Brand equity--the name Caterpillar has evolved as synonymous with the finest equipment available.

Caterpillar's Weaknesses:

* U.S.-based manufacturer with higher labor costs.

* Caterpillar has followed a policy of promotion from within. Because of this policy, the management team has a conservative, introspective perspective toward worldwide operations. In addition, the company has extensive global operations but its senior executives are U.S. citizens. Executives appear trapped in a classic case of marketing myopia, especially as Caterpillar looks to aggressively expand in Eastern European and Asian markets.

* Labor-Management adversarial approach to contract talks.

* Caterpillar receives majority of ...

... middle of paper ...

..., lawn mowers

(Students should recognize that Caterpillar has absolutely no experience or expertise in these markets. It might have to establish an entirely new distribution channel to market these products but could probably capitalize on the Cat name.)

In summary, while Caterpillar has undergone major changes in response to the changing competitive environment, the company can not return to its insular attitude towards competing in this industry. There are many challenges remaining for Caterpillar, if the company is to compete successfully in the 1990s.

Harvard Business School, July 1991. Caterpillar Inc.: George Schaefer Takes Charge

Caterpillar Company Information. Mission. Caterpillar. Web:http://www.cat.com/about_cat/company_information/03_mission/mission.html

Komatsu Code of Business Conduct. Komatsu, Inc. http://www.komatsu.com/profile/index.html

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