Fluent Essays

Write a 2- to 3-page memo to the CEO of the Caterpillar company you’ve been assessing throughout the course, outlining your plan to create economic, social, and environmental value. In your memo, include the following items:  An executive summary of the memo A summary of the organization’s strengths and weaknesses, and recommendations for converting weaknesses into strengths A summary of your Week 3 findings on Porter’s Five Forces A summary of your Week 4 findings on the Diamond of National Advantage A summary of your Week 5 analysis of the firm as a learning organization Strategic recommendations based on your previous work in this course. Include the opportunity identified in Week 2, the move into the country identified in Week 4, and any recommended moves toward being a learning organization. Provide rationale for each recommendation. Cite references to support your assignment. Format your citations according to APA guidelines MGT/576 v1 Porter’s Five Forces MGT/576 v1 Page 2 of 2 Porter’s Five Forces Complete the table below. For the company you’ve decided to assess in week 1, determine the strength of each of Porter’s Five Forces and of the complementors.    Justify your determination with examples.  Industry force  Strength Provide a justifying your determination with examples High  Medium  Low  Example x This is why I believe it is medium. Threat of new entrants  x This is the reason why the company has to maintain its quality production to avoid new entrances in the market. Power of buyers  x The company has ensured their factories have been fully automated to produce high quality products that are easily accepted in the market. Automation is done to cope up with the high demand of products from the Company. Power of suppliers  x The company has a strong global network of distributions which allows their products and services to be found easily all over the world. Power of substitutes  x They focus on quality products and services that are offered at premium prices thus allowing many customers to be taken care of at the same time. Thus customers don’t require substitutes. Rivalry among competitors  x Caterpillar ensures that they stick to their legacy of commitment to their target market and work towards meeting the expectations of their customers hence limiting the chances of competitors survival. Complementors  x The company is only focused to produce what the customers’ needs and not to complement another firms products or services. References: 2021. [online] Available at: <https://www.caterpillar.com/en/brands.html> [Accessed 4 July 2021]. : https://www.caterpillar.com/ Copyright 2020 by University of Phoenix. All rights reserved. Copyright 2020 by University of Phoenix. All rights reserved. The CATERPILLAR Expanding the Organization Theadelle dyn Santos MGT 576/ University of Phoenix 7/25/2021 1 Agenda The country Elements of the Diamond of National Advantage Analysis of forces to help success of Caterpillar Company in Philippines Forces hindering the organization’s success Leadership actions to make 4 adjustments identified by Burkus Recommendation and rationale Conclusion References Target Country for Expansion Philippines, Asia is in high demand of mining, forestry and construction equipment therefore Caterpillar Company could consider expansion into the country. Caterpillar Company is the leading company that is involved with the manufacture of equipment used in construction and mining, natural gas engine, turbines for industrial gas and diesel electric locomotives. Expansion of the company relies on the demand of its products in a given country. Philippines, Asia is in high demand of mining, forestry and construction equipment therefore Caterpillar Company could consider expansion into the country. 3 Elements of the Diamond of National Advantage The four factors of the Diamond of National Advantage: industry rivalry, demand conditions, related and supporting industries, and factor endowments have been favorable for Caterpillar in helping the company boost its international growth with continuous innovation and technology upgrades. 4 Industry rivalry Demand conditions Related and supporting industries Factor endowments Industry rivalry In terms of global competition, Caterpillar needs to gain an understanding of different international business behavior to foresee potential threats; and understand regional business practices and culture in the Philippines in order to develop region-specific products and services. 5 Competition with global players Understanding of different international business behavior Understanding of regional business practices and culture Demand conditions When it comes to Demand Conditions, Caterpillar should look into the size of the domestic market for its international expansion measures. As the size of local markets and domestic customer increases, understanding the dynamics at play with larger markets, will help the company strategize and plan their operations accordingly. Utilizing the sophisticated and demanding domestic customers for Caterpillar will challenge them into utilizing its resources to drive innovation in order to develop unique products and services. Anticipating the nature and behavior of domestic customers with can help predict behavior of customers with the same profile in other markets. 6 Demand conditions state the size of customer products Nature of customer base for production Drives innovation Determines improvement of product Related and supporting industries Related and supporting industries contribute to innovation relying on the level of transparency and transfer of knowledge. Related industries correspond to suppliers and customers who can represent threats and opportunities in the Five Force model. For Caterpillar, the supporting and related industries helped the company in achieving new heights. The presence of related industries, have supported the company by providing materials needed for the operation of the business. For example, Caterpillar was able to source raw materials in different markets that allowed them to control cost and achieve economies of scale. 7 The upstreaming and downstreaming industries Facilitation of change by switching ideas Factor endowments One of the main role of government in controlling the economy of the nation is encourage and challenge business operations within the country to focus on the design and growth of the elements of factor condition. The government establishes and enforces anti- trust laws to stimulate competition. If Caterpillar pursues The Philippines for expansion, the nation can create factor endowment such as low-cost skilled labor, its land which is rich in natural resources, strong knowledge base, easy government support and adaptable culture, huge opportunities for technological innovation and high potential infrastructure and capital. 8 Most important according to Porter’s theory Created by the country’s economy Large skilled labor Technological innovation Infrastructure and capital Analysis of forces to help success of Caterpillar Company in Philippines The mission statement of Caterpillar Company will rely on its missions including provision of the best machines will support services for potential customers. Intensive strategies such as market penetration and develop will enhance success of the company in Philippines. The strong brand image of the company will serve as a success force in Philippines. Philippines is one of the emerging and developing markets in Asia hence the company can successfully develop in the country. 9 Mission statement Intensive strategies Strengths of the company Opportunities of the company Forces hindering the organization’s success in Philippines Related companies in the country increase the level of competition as they are all struggling for the same customers. Substitutes such as crude tools can be used in the place of heavy equipment in the company. Buyers’ bargaining power lowers the company’s sales and profits over a given period. New entrants in the market may attract most of the customers hence affecting the company’s entry in the market. 10 Competitive rivalry Threat of substitutes Bargaining power of buyer New entrants Leadership actions to make 4 adjustments identified by Burkus Burkus identified adjustments include development of a global mindset which requires the leaders to develop a mindset that is open to team members on cultural diversity. Development of sensitivity to cultural differences requires the leaders to perceive and leverage the variation of familiar and foreign culture. Decentralization adjustment entails the executives to change philosophy of management. Deciding on the level of involvement entails deciding on anticipation on new markets such as exploration, joint venture and foreign operation. 11 Synthesize the company’s global strategy Perceive and leverage differences between familiar and foreign cultures Change philosophy of management Decide on anticipation Recommendation and rationale Caterpillar Company can improve performance through differentiation The company should produce new and unique products The company should invest more in developing novel products Caterpillar Company should create its distribution network The company should focus on developing markets Creation of new and unique products will contribute in attraction of more customers in the company. To increase competitiveness, the company should invest in developing novel products. To focus on performance, the company should develop its network for distribution. 12 Conclusion The Caterpillar can grow and emerge in developing markets , mostly Asia The company is able to exploit construction boom in the countries it expands To capture more global market the company can innovate new products Philippines can support the expansion of the company since it is in Asia where there are high chances of carrying out construction, mining, forestry and electric power, References Byrnes, B. (2021). Caterpillars Emerging-Market Strategy | The Motley Fool. The Motley Fool. Retrieved 24 July 2021, from https://www.fool.com/investing/general/2011/11/30/caterpillars-emerging-market-strategy.aspx. Caterpillar Inc. Vision, Mission, Intensive Strategy, Five Forces, SWOT - Panmore Institute. Panmore Institute. (2021). Retrieved 24 July 2021, from http://panmore.com/caterpillar-inc-strategic-analysis-vision-mission-swot. Burkus , D. (2012). Essay: Developing Global Leadership: A review of barriers and adjustments for international expansion.  International Management Review, 8 (2), 83–84. 14 .MsftOfcThm_Accent1_Fill { fill:#ACD433; } .MsftOfcThm_Accent1_Stroke { stroke:#ACD433; } Caterpillar’s Opportunities and Value THEADELLE DYN SANTOS UNIVERSITY OF PHOENIX Good Morning Professor and Class, This presentation is about one of 500 Fortune Companies, Caterpillar and its opportunities to add economic, social and environmental value. 1 Agenda The Agenda of this presentation is to provide the description of the Caterpillar as a company. We will also tackle Caterpillar’s strengths and weaknesses and my recommendations to address opportunities for its economic, social and environmental value. 2 Description of the organization. Summary of the strengths. Summary of the weaknesses. Caterpillar Organization This slide includes the description of caterpillar Inc. In 2020, Caterpillar’s sales and revenues of $41.7 billion has made them the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Since 1925, they have been driving sustainable progress and helping customers build a better world through innovative products and services. Throughout the product life cycle, they offer services built on cutting-edge technology and decades of product expertise. These products and services, backed by our global dealer network, provide exceptional value to help their customers succeed. They do business on every continent, principally operating through three primary segments – Construction Industries, Resource Industries, and Energy & Transportation – and providing financing and related services through their Financial Products segment. 3 Caterpillar Inc. is the world’s leading manufacturer of: Construction and mining equipment. Diesel and natural gas engines Industrial gas turbines Diesel-electric locomotives. They do their business in every continent. Summary of Caterpillar’s strengths Now, let’s talk about Caterpillar’s strengths. The company has a strong brand image that is appealing to their target customers who seek their services. Besides, the company’s large-scale assets have the ability of performing any tasks they are given to do by their various clients across the world. Also, the company has a strong global network of distribution which allows their products and services to be found easily all over the world. The company focus on quality products and services that are offered at premium prices thus allowing many customers to be taken care of at the same time. Moreover, the company make quick pre-planned decisions that enable them work towards achieving the goals of its target market. 4 The company has a strong brand image. They have large scale assets The company has strong global network. They focus on quality products and services. They make quick pre-planned decisions. Summary of Caterpillar’s Weaknesses When it comes to weaknesses, Caterpillar’s weaknesses include its low rate of innovation and limited connections in emerging markets. The low rate of innovation is typical in the heavy equipment and financial services industries. This weakness makes the company vulnerable to competitors that aggressively invest in technological innovation. Limited business connections in emerging markets prevent the firm from maximizing revenues. For example, while it already operates in China, Caterpillar still lacks an extensive network of distributors in the Chinese market. 5 They have low rate of innovation and limited connections. 1 They have limited business connections in emerging markets. 2 Competitive Rivalry The company faces high competition. They have various competitors. The competitors are major players in the global market The competitors have similar strategies. This slide includes the discussion of one of the key aspects of external environment assessment that presents opportunities for adding value. The company faces high competition in the industry. In heavy equipment manufacturing, there are significant competitors from countries like Japan and the Netherlands. These competitors are also major players in the global market. They have engineering expertise comparable to that of Caterpillar. In financial services, competition is even higher. There are many small, medium, and large financial service companies that directly compete with firms like Caterpillar. 6 Threat of Substitutes This slide includes the discussion of another key aspect of the assessment of Caterpillar Inc. external environment which is threat of substitutes. The threat of substitution is low. For instance, crude tools can be used as substitutes to heavy equipment from the company. However, the current trend is toward mechanization and automation. Thus, customers are unlikely to shift away from using heavy equipment like those from Caterpillar Inc. 7 The company has a low threat of substitutes. Crude tools can be used as substitutes The current trend is toward automation and mechanization. The customer may not shift from using heavy equipment. Evaluation of opportunities to add economic value Let’s go over how Caterpillar Inc. adds economic values through pursuing their opportunities. Caterpillar strives to provide customers with quality equipment that provides the best economic proposition for their business. Their remanufacturing (reman) and rebuild businesses provide customers not only with an immediate cost savings, but also help extend life cycles and use materials more efficiently. 8 They ensure maximum productivity from their equipment They increase reliability and equipment uptime. They ensure cost-effective performance They increase the customer’s return on their investment An evaluation of opportunities to add environmental value Let’s discuss some opportunities of Caterpillar to add value to the environment. The company is committed to further reducing their greenhouse gas emissions while helping their customers meet their climate-related objectives. They are supporting their customers during the energy transition to a lower-carbon future through investments in new products, technologies and services. Caterpillar has a legacy of providing products and services that continually improve the quality of the environment and communities by fulfilling society’s basic needs such as shelter, clean water, education and reliable energy – in a sustainable way. 9 The company focus on reducing greenhouse gas emissions. The company supports their customer during energy transition. The company provides products and services that improve the quality of environment. Opportunity Recommendation My first recommendation is for Caterpillar to increase its revenues through growth and expansion. Secondly, Caterpillar will benefit from global growth in the construction market by creating improved products and meeting market demands. From 2016 to 2020, the global construction output in advanced economies is expected to increase by 2.5\%, and the output in emerging markets is expected to increase by 4.2\%. The Asia-Pacific region is expected to hold the largest share of the global Construction Industry. Caterpillar owns and operates a dealership in Japan that reaches 85\% of the Japanese heavy machinery market. The global energy requirement is expected to increase by 30\% from 2017 to 2040. $44 trillion is the expected amount required for global energy supply in addition to $23 trillion for energy efficiency improvements . I believe these demands for energy across the world will lead to an increase in demand for Caterpillar products related to resources and mining markets. Moreover, these demands should be taken advantage of by increasing their competitive advantage through innovation and utilizing the global demand for energy. 10 The company should increase its revenues through growth and expansion. The company should increase their competitive advantage through innovation. They should increase global construction output. Utilize the global demand for energy. CONCLUSION In order to sustain the topmost position into the market, Caterpillar needs to maintain its continuous growth and development initiatives. The company needs to leverage its strong reputation, use of advance technology and diversification of products and services which will provide a competitive advantage to the organization. Therefore, in order for Caterpillar to sustain the topmost position into the market, the company needs to maintain its continuous growth and development initiatives. It would be best for Caterpillar to leverage the full usage of its strengths such as strong reputation, good financial standing, use of advance technology and diversification of products and services will provide a competitive advantage to the organization. 11 References (2021). Retrieved 12 July 2021, from https://www.caterpillar.com/en/company.html. Caterpillar Inc. Vision, Mission, Intensive Strategy, Five Forces, SWOT - Panmore Institute. Panmore Institute. (2021). Retrieved 12 July 2021, from http://panmore.com/caterpillar-inc-strategic-analysis-vision-mission-swot. MGT/576 v1 Learning Organizations MGT/576 v1 Page 2 of 2 Learning Organizations and Value Creation Review the 6 key elements of a learning organization (Ch. 11 of Strategic Management, by Dess). Complete the table below. Evaluate the extent to which the company you’ve selected to assess in this course epitomizes each of the 6 elements.    Justify your determination with examples.  Learning Organization Element Extent to which the company epitomizes this element  Provide a sentence justifying your determination High  Medium  Low  Example x [This] is why I believe it is medium. Inspiring and motivating people with a mission or purpose  X This is because of the many years its customers have been satisfied with using their machinery. Caterpillar has a mission which guides its operations by telling people its purpose, their current standing and where it needs to be in the future. Developing leaders  X The business success over the years can be driven by the company’s consistent investment on developing their leaders. Caterpillar has enhanced leadership through diverse experience. Growth and skill development have been the important components to Caterpillar’s legacy of excellence and innovation. Empowering employees  X Caterpillar empowers its employees by building a career through development and drive. The company has provided a lot of opportunities for its employees to move from various locations and promote more internally. Caterpillar has been a frontrunner in promoting diversity, why it highlighted all the women that helped build it. Accumulating and sharing internal knowledge  X Internal company information is kept confidential however, it is shared internally through seminars, company meetings and communication platforms to keep the transparency among all employees. Gathering and integrating external information  X Caterpillar uses various technologies and tools which they utilize to gather external information and is stored in their software systems. Such information is being used in forecasting and marketing strategies. Challenging the status quo and enabling creativity  X Through the efficient and lasting equipment, the creativity and status quo prove extremely high. The business environment in Caterpillar is changing and remote collaboration has been enabled to help creativity by sharing knowledge and expertise. Recommend at least 1 step the organizations leaders could take to enhance 1 of the elements and explain how that could help the organization create more value. Team building and monthly engagement activities These activities will spark motivation and engagement at workplace and bring many knowledge holders together. The leaders can divide the activities which allow to have an opportunity to get some facetime with the employees which improves employee relations which is a vital part on successful leadership., Mentoring, progression training and 1:1s These types of platforms involve transfer of knowledge directly from the knowledge holder directly either through in-person tutoring, company-wide training sessions, online chats, or group discussions. This helps in answering of questions more clearly and clarifications can be made if the material is not understood more clearly. This helps in building a more efficient workplace and leading to a faster and better decision-making process in the organization. Moreover, it supports buddy system and teamwork. References: https://www.caterpillar.com/en/company.html Copyright 2020 by University of Phoenix. All rights reserved. Copyright 2019 by University of Phoenix. All rights reserved.