Company Overview

World’s largest manufacturer of heavy equipment.

Markets include construction, mining, agriculture, forestry, and many others.

Recent acquisition of Bucyrus.

Competitors-

Deere & Co., Komatsu Ltd., Joy Mining, CNH Global

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Additional Brands

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History of EME

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.

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EME Industry

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

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Sources of ‘CAT’ success in EME Industry

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)

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Early Growth

Started in 1883 in Stockton, California as "Stockton Wheel Company"

Founded by the Holt Brother

1905- first major public contract, the San Francisco Cable Car

1909 opened a second plant in Peoria, Illinois

Aided the US and their allies in WWI

Merged with C.L. Best Tractor Company to from Caterpillar Tractor Company in 1925

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Expansion

Headquarters moved to Peoria, Illinois

After WWI, European nations became interested in Caterpillar machinery

Expansion to other countries, ex. India

Led to the formation of different brands within Caterpillar

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Product & Services

Product-

Machines: the product line consists of more than 300 machines

Engines: High speed diesel engines

Electronics: Technologies, systems and components needed to operate in the harshest environments

Turbines: Mid-range industrial gas turbines

Replacement parts

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Product & Services

Services-

Castings: Caterpillar’s Cast Metal Organization

Maintenance & Support: Caterpillar dealer service

Training: Caterpillar University

Financing & Insurance: “The best financing solution for your business.”

Rentals

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Business Philosophy

Caterpillar focus on its role in the worldwide, and Caterpillar never stop self evolving to be the best in business.

Caterpillar cooperate with local culture and government.

Caterpillar focus on safety in the workplace than its profit.

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Business Philosophy

Caterpillar’s product development.

Caterpillar’s 4 steps product creation process:

Strategy definition

Product development

Manufacturing execution

Product support

How does Caterpillar achieve high speed for technology development?

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Worldwide Coverage

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Business Methods

Caterpillar have two operating systems, one for Caterpillar and another for Caterpillar’s dealers.

Caterpillar using Six Sigma and Caterpillar Production System to control company's operation.

Caterpillar’s dealers using Dealer Business System for their day to day operations.

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Management

Dealers are using Dealer Business System for supply chain management.

Four main modules for Caterpillar’s risk management.

Caterpillar’s corporate governance structure.

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Marketing strategy

New vision 2020 strategies:

Improve products and services

Achieve more advantage by improving Caterpillar’s distribution system

Build superior Caterpillar business model

Caterpillar’s marketing strategy is to treat its customers like human beings

Caterpillar’s global strategy is to provide different product and service standard with its competitors.

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Financial Analysis

Trend Analysis

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Financial Analysis

Comparative Analysis

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Competitor Overview

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Competitor Overview

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Recommendation

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.

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