Free Essay

Swot Analysis for Caterpillar Inc

In:

Submitted By cwarthan
Words 1076
Pages 5
SWOT Analysis for Caterpillar Inc.
MBA5101
Christi Warthan
Columbia Southern University

SWOT Analysis for Caterpillar Inc.

Introduction: This will be a Strength, Weakness, Opportunities and Threats (SWOT) analysis on Caterpillar Inc. From the inception of the company in 1925 Caterpillar has been a pioneer in the industry and today is a global corporation that is one of the most widely recognized in the world.

Strengths: One of the biggest strengths that Caterpillar has going for it is brand name recognition. There are few places on planet Earth that you can go and not find a piece of Caterpillar equipment. That name is also synonymous with quality. Another one is the wide product range it has and services. With a distribution chain that is global, the company is able to produce and supply those quality products to just about anywhere. With nearly $11 billion in sales and revenue last physical year the company is able to achieve a strong line of acquisition too. According to the company website Caterpillar.com, they current holds more than 15,000 active patens and have more than 108,000 full time employees. The strength of any company is its work force and Caterpillar is no exception. They currently employ over 11,000 engineers and over 350 Ph-D level scientist that are working to provided new innovation and technologies. Another benchmark for the company is its efforts to achieve sustainability. “A leader in remanufacturing technologies and processes, Cat Reman returns products at the end of their lives (called 'core') to same-as-new condition and helps reduce owning and operating costs by providing our customers same-as-new quality at a fraction of the cost of a new part.” (http://www.caterpillar.com/).

Weaknesses: According to Caterpillars own retail statistics they are down across the board in every market and product for the last quarter of 2015. They categorize the retail into several segments; Machines Retail Statistics Total, Resource Industries, and Construction Industries. The loses are the largest in Latin America with 38%, 44% and 34% respectively. Asian markets are not much better with 21%, 48% and 9% respectively. Their Energy & Transportation Retail Statistics are equally lacking with Power Gen and Industrial down 22%, Transportation was hit hard down 58%, and finally Oil and Gas were down 32%. It does not take a degree in finance to realize that the company cannot continue to sustain these types of loses (http://www.caterpillar.com/en/investors/financialInfo/dealer-statistics.html). The company is facing some competition in places like the Asian market and Latin Americas economy as a whole has been dropping. European markets are another concern with the continued financial problems there as well. If Caterpillar is going to overcome these issues they are going to have to fine new innovation, either through its own development or by acquisitions. It is clear that the current inventory is not meeting the mark.

Opportunities: The global growth in the construction market is projected to grow from $8.5 trillion in 2015 to $10.3 trillion by 2020 according to the PR Newswire website. “The construction industries in the Middle East and Africa region are predicted to be the fastest growing in 2016-2020, overtaking the Asia-Pacific region, which held the top spot in 2011-2015.” (http://www.prnewswire.com/). By placing a focus on and in the growing markets of Africa and the Middle East, Caterpillar could recapture market shares and turn around declining retail sales. They could also redirect some of its resources that are located in the crumbling Euro market to cut loses and capitalize on the other nation’s growth. Mining as an industry suffered huge losses last year and 2016 is not projected to be much better. Until the markets strength mining will continue to “bump along the bottom” (Mining.com). Mining.com also states that the down turn is due in large part to oversupply and weak markets. Innovation is a key factor in the opportunity ring for Caterpillar. With sustainability on the lips of nearly every large corporation, Caterpillar should continue its push to look for new and innovative ways to help them become an industry leader. Maybe look for a greener solution in overall product development. The company could also increase revenues in such areas as growth and expansion. Increasing the competitive advantages over its closes rival Joy Global is another way.

Threats: Caterpillar has a large market share of the mining industry and with the projected slump in mining operations, they stand to lose additional revenue there. There is also the competition of Joy Global. These two are closely connected when it comes to the market. Neither company had a great last quarter and now both have announced layoffs and plant closures. Then there are the ever present Asian markets which have been known to “borrow” technology from competitors, make just enough design changes to be able to legally call it their own and then bring the product to market at a, sometimes greatly, reduced price. Another issue for the company is the strength of the dollar. According to Investpedia.com “In particular, the weak euro has had a dramatic impact on Caterpillar, with Europe providing almost a quarter of the company's total revenue. Weak currencies in the Asia-Pacific and Latin American regions have also played a role in keeping growth down.” The falling price of gas and oil are hitting them as well. According to the same article in Investopedia, “In the eyes of one Caterpillar executive, "the impact of substantially lower oil and gas prices is the most significant reason we're expecting lower sales in 2015," with about half of the company's anticipated 9% revenue drop coming from oil.” (Investopedia.com).

References:
(2015, March 20) Caterpillar Faces These 3 Major Threats. Investopedia. Retrieved from URL http://www.investopedia.com/stock-analysis/032015/caterpillar-faces-these-3-major-threats-cat.aspx
Jamasmie, Cecilia (2015, Dec 22) What to expect for 2016: Top predictions for the mining industry. Mining.com Retrieve from URL http://www.mining.com/what-to-expect-for-2016-top-predictions-for-the-mining-industry/
Retrieved from URL http://caterpillar.com/
Retrieved from URL http://www.caterpillar.com/en/investors/financialInfo/dealer-statistics.html
(2015, Feb. 17) Global Construction Market Worth $10.3 Trillion in 2020. Retrieved from URL http://www.prnewswire.com/news-releases/global-construction-market-worth-103-trillion-in-2020-50-largest-most-influential-markets-292235961.html

Similar Documents

Premium Essay

Environmental Scan

...first step in the environmental scan process is to conduct a SWOT analysis to determine internal and external strengths, weaknesses, opportunities for growth and trends in the market place. Once the SWOT analysis is complete, it can be reviewed and evaluated to determine areas that the company can create value and sustain competitive advantage through business strategy. In order to sustain the created value and competitive advantage, companies must set measurement guidelines and assess how effective those guidelines are in measuring strategic effectiveness. In order to illustrate how an environmental scan can help a company, we will look at two different organizations. The two companies are Caterpillar Logistics, Inc. and Monumental Life Insurance Company. Caterpillar Logistics, Inc. is in the business of distributing parts for Caterpillar, Inc. machines. Monumental Life Insurance Company is in the business of selling life, health, and disability income insurance to American families. We will look at each company separately. Caterpillar Logistics, Inc. Caterpillar Logistics, Inc. has many strengths including quality parts, dealer networks, parts availability, inventory control systems, and twenty-four hour emergency service. Caterpillar parts are original manufacturer parts whose quality is superior to those manufactured by the competition. The dealer network helps to distribute parts efficiently to Caterpillar customers. With this network customers have a direct local...

Words: 1148 - Pages: 5

Premium Essay

Organizational Planning

... University of Phoenix Mr. Thompson Caterpillar is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. A strong portfolio of brands supports Caterpillar’s business growth and diversified geographic presence helps the company mitigate the overall risk associated with the range of external factors in the marketplace. The company operates globally with major presence in North America, Asia Pacific and Europe. Its headquarters is located in Peoria, Illinois and employs roughly 120,000 people. Caterpillar’s Mission, Vision and Goals are as follows… “Our mission is to enable economic growth through infrastructure and energy development and to provide solutions that support communities and protect the planet”. “Our vision is a world in which all people’s basic needs – such as shelter, clean water, sanitation, food and reliable power – are fulfilled in an environmentally sustainable way and a company that improves the quality of the environment and the communities where we live and work”. “Our strategy is to provide work environments, products, services and solutions that make productive and efficient use of resources as we strive to achieve our vision”. Caterpillar is also in the process of designing all new facility construction to meet Leadership in Energy and Environmental Design (LEED) or comparable...

Words: 600 - Pages: 3

Free Essay

Caterpillar France

...paper is to assess the ability of Caterpillar Inc. to be competitive internationally in France. Caterpillar is already established in France, but has had its setbacks and challenges along the way. I am going to analyze Caterpillar’s products, industry context, and performance-to date and suggest how they can expand current manufacturing and distribution operations and the institutional challenges that lie ahead. I chose Caterpillar because they are an Illinois company that employs multiple family members of mine. I chose France because my wife is a French teacher and we have visited France multiple times. INTRODUCTION According to The World Factbook, France today is one of the most modern countries in the world and is a leader among European nations. It plays an influential global role as a permanent member of the United Nations Security Council, NATO, the G-8, the G-20, the EU and other multilateral organizations. France rejoined NATO's integrated military command structure in 2009, reversing DE GAULLE's 1966 decision to take French forces out of NATO. Since 1958, it has constructed a hybrid presidential-parliamentary governing system resistant to the instabilities experienced in earlier, more purely parliamentary administrations. In recent decades, its reconciliation and cooperation with Germany have proved central to the economic integration of Europe, including the introduction of a common currency, the euro, in January 1999. Caterpillar was first exposed to France between...

Words: 2412 - Pages: 10

Premium Essay

Case

...SWOT ANALYSIS: REVIEW DOCUMENT FOR COMPANY ANALYSIS Company Name: Cummins Inc. Industry Sector: Global Diesel Engine Manufacturer Date: 23/11/2014 Analyst: Rajesh Kumar Strengths • Strong distribution network and strategic joint ventures with customers to allow better access to end customers CMI has joint ventures and strategic alliances with customers, particularly in emerging markets, including Tata motors in India, Dongfeng Motors in China, Komatsu in Japan, and PACCAR in the US. These companies are market leaders in their respective regions/countries. Additionally, CMI has 600 company owned and independent distributors locations, and approximately 6500 dealer locations in more than 190 countries. • Diversified portfolio of engines catering to wide range of customers The Engine segment produces engines and parts for sale to customers in on-highway and various industrial markets. Our engines are used in trucks of all sizes, buses and recreational vehicles, as well as various industrial applications including construction, mining, agriculture, marine, oil and gas, rail and military equipment. The composition of revenues by highway segment and industrial segment is around 60% and 40% respectively. Thus the concentration risk is minimized. The segment sells engines, generator sets, alternators, power systems and services. The Distribution segment includes wholly-owned and partially-owned distributorships engaged in wholesaling...

Words: 945 - Pages: 4

Premium Essay

Status Report – Bu 2799 Business Management Capstone Project

...lawn mowers, tractors, equipment, to industrial equipment, which include excavators and bulldozers. The company currently has a loyalty and rewards program for John Deere customers that promotes company retention and loyalty. The loyalty rewards program is called the GreenFleet Loyalty Rewards Program. The new business model that I propose would be structured around an enhanced version of the current GreenFleet Loyalty Rewards. Company Structure Second, I discussed the John Deere’s company structure. John Deere is considered a corporation. The company is made up of many subsidiaries, as well. Some of the subsidiaries of John Deere include Nortrax, John Deere Landscapes, Inc., The Vapormatic Company, Lesco, Farm Plan Corporation, John Deere Bank SA, Banco John Deere SA, John Deere Agricultural Holdings, Inc., as well as many other subsidiary companies and holdings that are held by John Deere. John Deere also has a...

Words: 1232 - Pages: 5

Premium Essay

Caterpillar Malcolm Baldrige Award

...CATERPILLAR FINANCIAL SERVICES CORPORATION TABLE OF CONTENTS AND FIGURES LIST P: Organizational Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure P-1 Figure P-2 Figure P-3 Figure P-4 Figure P-5 Figure P-6 Figure P-7 1: Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Figure 1-1 Figure 1-2 Figure 1-3 Figure 1-4 Figure 1-5 Figure 1-6 Figure 1-7 Figure 1-8 2: Strategic Planning 3: Customer and Market Focus 4: Measurement, Analysis, and Knowledge Management Measurement Architecture Sources & Uses of Comparative Data Information Systems Knowledge Management Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Figure 5-1 Figure 5-2 Figure 5-3 Figure 5-4 Figure 5-5 6: Process Management Customer Listening Approaches Customer Contact Mechanisms Customer Survey Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Figure 4-1 Figure 4-2 Figure 4-3 Figure 4-4 5: Human Resource Focus Strategic Planning Process Strategies and Action Plans Performance Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Figure 3-1 Figure 3-2 Figure 3-3 30 Compensation...

Words: 39947 - Pages: 160

Premium Essay

Factors That Affect a Business

...INTERNATIONAL BUSINESS CASE STUDY Assignment 11/29/2014 CASE STUDY OF DECEMBER 2014 ABE EXAMS Suggested questions 1) Using the PESTLE framework, analyse JCB global environment - Political factor: JCB political risk is not specified in the case study. But as a multinational, it is impacted by the political decisions of countries where it operates. According to the text, JCB is in a position of prevention. The company is implemented in countries where political riks are low. Even if they have potential market to sell compaction equipment in key developing country such as Africa, they are not ready to enter this market if there are no favorable political conditions. Control or restriction of it operations - Economical: The economic environment includes factors of production such as land, labor and capital. The company could analyze the income figure as the Gross Demographic or the Gross national Product of countries where they peroate as a guide to a specific market size. The inflation and the recession can also affect the operational cost of the company. This need to be observer and manage specially for some south American countries that have experienced high inflation rate, for example, Mexico has succeeded in bringing its inflation rate down from over 100% to under 10%. Other economic influence s that can be important are the level of government budget deficit or surplus. - Social and...

Words: 638 - Pages: 3

Free Essay

Sime Darby Swot

................................................................................................................3 Business Description...........................................................................................4 History...................................................................................................................6 Key Employees...................................................................................................10 Key Employee Biographies................................................................................12 Major Products and Services............................................................................20 Revenue Analysis...............................................................................................22 SWOT Analysis...................................................................................................24 Top Competitors.................................................................................................30 Company View.....................................................................................................31 Locations and Subsidiaries...............................................................................36 Sime Darby Berhad © MarketLine Page 2 Sime Darby Berhad Company Overview COMPANY OVERVIEW Sime Darby Berhad (Sime Darby or ‘the company’) is a diversified company with business interests in...

Words: 10629 - Pages: 43

Premium Essay

Strategy Formation and Management

...vision to see the entire beast everyone has grabbed hold of some part or the other and “railed on in utter ignorance” about the rest Course Title: Bachelor in business studies Module : MGT 330 Module title: Business Strategy Submitted to : Mr Mervyn Sookun Submitted by : Madan Gupta Student Id no: 860199. Contents Page No. 1. Core of the assignment. 3 2 Introduction 4-5 3Porters Generic Strategy 6 4 An Empirical Analysis 7 5. Role of different Schools of Strategy 8-12 6.Advantages & Disadvantages of Strategy 13 7. Conclusion 14 8. Reference 15 : Core Of Assignment: This assignment is designed on the strategy formation and strategic management. The statement of the assignment have been taken from the Strategy Safari (2001) written by H. Mintzberg. As the assignment progresses we will discuss how the strategy formation takes place where the writer comapares it with the elephant. According to the writer We are all blind people and the strategy formation is our elephant and because everyone is blind noone has been able to see this elephant and have different vision on strategy...

Words: 4848 - Pages: 20

Premium Essay

Mngt

...PART I COMPANY PROFILE 1.1Name of the Company McDonald's Corporation  McDonald's 1.2 Location of the Company (Head Office) Golden Arches Development Corporation 17th Floor Citibank Centre, Paseo De Roxas Avenue, Makati City 1.3 Locations of McDonald’s All over the Philippines there are McDonald’s. McDonald’s has grown to become one of the leading fast food chains with close to 300 restaurants nationwide. Mostly branches were strategically located at the malls and commercial buildings. 1.4 Website Address www.mcdonalds.com.ph 1.5 Background History of the Company The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald at 1398 North E Street at West 14th Street in San Bernardino, California . Their introduction of the "Speedee Service System" in 1948 furthered the principles of the modern fast-food restaurant that the White Castle hamburger chain had already put into practice more than two decades earlier. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee". Speedee was eventually replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man having puffed out costume legs. McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961, with the description "Drive-In Restaurant Services", which continues to be renewed through the end of December 2009. In the same year, on September 13, 1961, the...

Words: 7401 - Pages: 30

Premium Essay

Morgan Motor

...Morgan Motor Company An analysis on Internal and external environment i|Page Table of Contents Executive Summary .................................................................................................................. iii 1.0 Current Situation.................................................................................................................. 1 1.1 Current condition ............................................................................................................. 2 1.2 Strategic Posture .............................................................................................................. 2 2.0 Corporate Governance......................................................................................................... 6 2.1 Board of Directors............................................................................................................ 7 2.2 Top Management ............................................................................................................. 9 3.0 External Environment: Opportunities and Threats ............................................................ 11 3.1 Physical Environment: Raw Material ............................................................................ 12 3.2 Societal Environment ..................................................................................................... 14 3.3 Task Environment .............................................................

Words: 14866 - Pages: 60

Premium Essay

Strategic Planning

...Core Company Analysis Mike Bartelt, Rachel Bruss, Joe Collard, Michael Tenzer, Danielle Van Boxtel, Sam Weber Table of Contents Executive Summary Management Mission Statement Beliefs Culture Leadership Acquisition History Company Structure Competitive Advantages Regulations Future Strategy Human Resources Recruitment Compensation/Benefits Social Responsibility Marketing SWOT Analysis Marketing Mix Target Market Marketing Strategy Why BorgWarner? Accounting Principles Income Statement Revenues Expenses Balance Sheet Assets Liabilities Stockholders Equity Statement of Cash Flows Operating activities Investing activities Financing activities EBITDA Comparison Conclusion Finance Gross Margin Net Profit Margin Return on Assets Return on Invested Capital Return on Equity Interest Coverage Current Ratio Quick Ratio Long-Term-Debt to Assets Ratio Debt to Equity Ratio P/E Ratio Forward P/E Ratio Finance Summary Appendices Works Cited Executive Summary Our company, BorgWarner, was founded in 1928 when Warner Gear merged with Borg & Beck; eighty-seven years later the company is still going strong. Headquartered in Auburn Hills, Michigan, we are a global leader in developing powertrain technologies, with a large focus on fuel economy and overall efficiency. We, at BorgWarner, have a very diverse and loyal customer base around the world. We strive to produce and manufacture the most...

Words: 9760 - Pages: 40

Premium Essay

Dove

...Introductory Marketing Place Chapter 11 Armstrong/ Kotler Marketing: An Introduction  Marketing Channels and Supply Chain Management I. The Nature of Distribution Channels Channels of Distribution is known as "Place" in the "4 P's" model of Marketing. Distribution Channels provide the utility of place, of having products where the customer wants when the customer wants them. In these days of customer focus and emphasis on competition, the 4 P's model is considered very simplistic, and I've always thought that was probably why Marketers began referring to Place as Channels, to move us away from "The "4 P's" as a description of all of what Marketing is about; nevertheless, "place" is a convenient way to think of the term Channels of Distribution. |Distribution is particularly important in a country |[pic] | |like Canada with our huge size and our northern | | |climate. Every spring, trucks go down through the ice | | |in places where frozen water is used as a seasonal | | |road; this truck is sinking in Lake Winnipeg. | | |[pic] ...

Words: 40156 - Pages: 161

Premium Essay

Walgreens Marketing Plan

...Marketing Project: Walgreens Company Table of Contents Introduction………………………………………………………………………….3 Market Situation/External Analysis………………………………………………..3 Current Industry…………………………………………………………………….3 SWOT Analysis………………………………………………………………………4 Major Changes and Trends…………………………………………………………6 Key Success Factors……………………………………………………………….…8 Marketing Strategy………………………………………………………………….9 Segmentation Strategy……………………………………………………………….9 Target Market Description and Strategy…………………………………………..13 Positioning……………………………………………………………………………15 Marketing Mix Strategy………………………………………………………….….18 Marketing Objectives………………………………………………………………..18 Product Strategy……………………………………………………………………..21 Pricing Strategy……………………………………………………………………...23 Promotion Strategy………………………………………………………………….25 Distribution Strategy………………………………………………………………..27 Forecast………………………………………………………………………………29 Conclusion……………………………………………………………………………31 References……………………………………………………………………………32 Introduction Walgreens is established as one of the leading competitors in the drug store industry. Over the years, Walgreens has developed a very well-known and respectable name for itself through different marketing strategies and company strengths. Like any company in a competitive market, Walgreens has its share of opportunities and threats, and has continued to remain at the top of the industry. Providing such a wide variety of products and services to its very diverse customer base means Walgreens must stay up-to-date...

Words: 10659 - Pages: 43

Premium Essay

Strategic Advantage and Information Technology

...PART I IT in the Organization 1. Information Technology in the Digital Economy 2. Information Technologies: Concepts and Management 3. Strategic Information Systems for Competitive Advantage CHAPTER Strategic Information Systems for Competitive Advantage Rosenbluth International: Competing in the Digital Economy 3.1 Strategic Advantage and Information Technology 3.2 Porter’s Competitive Forces Model and Strategies 3.3 Porter’s Value Chain Model 3.4 Interorganizational Strategic Information Systems 3.5 A Framework for Global Competition 3.6 Strategic Information Systems: Examples and Analysis 3.7 Implementing and Sustaining SIS Minicases: (1) Cisco Systems/ (2) Aeronautica Civil 89 LEARNING OBJECTIVES 3 After studying this chapter, you will be able to: Describe strategic information systems (SISs) and explain their advantages. Describe Porter’s competitive forces model and how information technology helps companies improve their competitive positions. Describe 12 strategies companies can use to achieve competitive advantage in their industry. Describe Porter’s value chain model and its relationship to information technology. Describe how linking information systems across organizations helps companies achieve competitive advantage. Describe global competition and global business drivers. Describe representative SISs and the advantage they provide to organizations. Discuss the challenges associated with sustaining competitive advantage. ROSENBLUTH INTERNATIONAL: COMPETING...

Words: 18939 - Pages: 76