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Caterpillar 1.

What were some of the key steps that led to Caterpillars becoming the industry leader in earth-moving machinery? Caterpillar produced over 300 different kind of machinery for sales aro und the world. Its products give solution to eight industries such as residential, nonresidential, industrial, infrastructure, mining and quarrying, energy, waste and also forestry. Besides that, the use of Caterpillars trademark farm treads o n the Army tank in World War 1 and World War 2. The huge postwar construc tion and also strong overseas demand made the sales of Caterpillars products i ncreased. Due to the recession of the early 1980s, Caterpillar lost about $6.5 bi llion and the company was forced to laid off thousands employees, closed seve ral factories and suffered a long United Auto Workers strike. Therefore, Cater pillar recognized that a change in the company would overcome the crisis. The company undergoes the new leadership and it was successful pull off one of t he biggest turnarounds in corporate history. Caterpillar boldly fought the United Auto Workers and outlasted two strikes a nd seven years of disagreements. Due to that, it decentralized and restructured into several business unit and each of the business unit will responsible for its own P&L. Caterpillar invested a significant amount of money about $1.8 billio n in a factory-modernizing program that automated and streamlined its manuf acturing process with a combination of just in time inventory and flexible man ufacturing. By automating its manufacturing system, the company became mo re efficient and competitive, although it also was forced to lay off more its wor kforce. Furthermore, the company realized that the research & development wi ll made the company even better than its competitors. Caterpillar invested hun dreds of millions of dollars in new technologies, products, and also the machin es. As results, CAT construction trucks became higher tech, competitive and e nvironmentally friendly. Besides that, the focusing on the innovation also mad e the company ranks in number one or two in every industry it serves. Other th an that, the company also divided its product strategy into three segments: Wo rld Class, Mid-Tier and also Low End. The company is also focused on innova ting high-tech machinery for the growing World Class segment and leaving th e Low-End segment to local competitors that will eventually be consolidated.

The business model practiced by Caterpillar also made contribution to its domi nance in the market. Caterpillar provides machines support and support for a wide range of industries. The Global Dealer Network which is a specially train ed independent CAT dealers who can provide services on a local basis, giving the global company a personal feel. 2. Discuss Caterpillars future. What should it do next with its products line? Wh ere is the future growth of this company? Due to the demand of its products in U.S still in sluggish, thus the Cate rpillar has switching it focus more on the emerging economies such as China, Brazil, Russia, India and those region which will be a strong point for the com pany. The developing countries would demand more construction equipment i n their economy growth. The company must able to continue provide the high performance equipment with highest reliability and durability. This two qualit y features is the key purchase consideration in purchasing of heavy industrial e quipment. While Caterpillar is well known for its large premium machines spo rting with many features, customers in China may be looking for something si mpler with fewer bells and whistles. For instance, Japans Komatsu Ltd, comp etes against Caterpillar with smaller, simpler machines. Thus, Caterpillar shoul d take concern of these problems and continue supply the idea products for the consumers. Besides that, Caterpillar should continue in doing the R&D for its product line. For example, the company should understand the segment of mar ket they currently and future served. Benchmarking their product with the com petitor such as Japan-based Komatsu, Netherland-based CNH would make the m growth faster and bigger. The company move forward by focused on reduci ng the greenhouse gas emissions in its machinery, innovating the green techno logies. Due to its position as a leader of the heavy-equipment industry leader, i ts competitors will also following the change in order to compete with Caterpil lar. According to the Wall Street Journal, Caterpillar is doing a good job of su pplying customers on a timely basis. The superior sales and service functions will continue act as the heart of the Caterpillars successful product strategy.

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