Caterpillar Case Study Presentation
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Transcript of Caterpillar Case Study Presentation
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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