Business Development Case Study: Caterpillar's Global Strategy

This case study examines Caterpillar's business operations, focusing on its micro-environmental influences, stakeholder relationships, and strategic decisions within the global market. The analysis includes a discussion of the company's history, customer relationships, and collaborations, highlighting the importance of stakeholders such as suppliers, customers, and governments in effective decision-making. A SWOT analysis is presented, evaluating Caterpillar's strengths, weaknesses, opportunities, and threats, particularly in relation to competition from Japanese companies and the rise of imitation strategies. The case study also touches upon the broader implications of foreign direct investment (FDI) and its impact on the international business ecosystem, emphasizing the ethical considerations and the importance of organizational sustainability. The document provides valuable insights into Caterpillar's business practices and offers recommendations for multinational enterprises (MNEs) to establish more ethical international business practices.

Caterpillar

Micro-environmental influence
• The company Caterpillar, was founded in the
year 1928, as a result of two companies joined to
work together. The two companies were Holt
Manufacturing company and the C.L. tractor
company. Caterpillar serves the customers
around the world, include the building
contractors from the European and Chinese
markets. The customers include landscape,
construction, and agricultural markets.

• Caterpillar has built strong relationships with
their customers. The building construction
groups helped the company to create buyers
personas for the customers of their impact.
• The company believed that their success was
their customers, as they established healthy and
emotional connection with them. Thus,
Caterpillar made strategic decision to sharpen
their customer-centric focus (Caterpillar, 2018) .

• The Caterpillar major collaborators included, the
construction companies in the European and Japanese
markets. The company acquired many other firms or
assets such as Trackson, Rolls-Royce UTC, Lotus,
Jaguar and others. One of the major competitor of the
company was Komatsu, a firm in the Japan.
• The competitive firms include from the countries like
Japan and Netherlands. Important stakeholders
included construction and mining suppliers, customers,
distributors, and the firms providing raw materials to
the company (Schaefer,Walker and Flynn, 2017).

The company caterpillar, was effective in carrying their
operations smoothly and building strong relationships with their
collaborators such as NASA for technology advancements.
Thus, the major stakeholders such as suppliers, government,
customers, and the other dealers company play a major role in
effective decision-making of the company. As the company
provide value to their customers, and encourage profit-making,
therefore, it represents that they affect the decision-making of
the company. Stakeholders contribute in strategic decision
making, as their interest and values determine their commitment
towards organisational practices. Therefore, their involvement in
decision-making activities is essential and beneficial to the
organisation in long-term (Williams, 2018) .

SWOT Analysis
• To discuss strengths of the Caterpillar, it can be
stated that the company has strong brand image,
and large-scale assets, and wide distribution
network in the market (Gaurav and Shainesh,
2017) .
• Weaknesses of the company includes slow pace
of innovation, and limited connections in
business markets, decreasing revenue. For an
instance, Caterpillar though operates in Chinese
market, lacks in terms of an extensive network
of distributors (Shrestha, and Bawa, 2015) .

• Growth and expansion states the opportunities to
increase revenue and profits, especially in Asia.
• Chinese manufacturers, imitates the Caterpillar’s
strategies. Imitation has become as the serious
issue in the advent of local and regional firms
copying the original designs of the global firms in
the industry.
• The threats also include the aggressive
competition from the Japanese companies, could
integrate robotics into their products posing threat
to the company (Hutzel and Lippert, 2014).

• Caterpillar (2018) History of Customer focus. [online] Available from:
https://www.caterpillar.com/en/news/caterpillarNews/history/ahistoryofcustomerfocus.html
[Accessed 24/10/18].
• Gaurav, R. and Shainesh, G. (2017) The changing face of customer centricity. In The Palgrave
Handbook of Managing Continuous Business Transformation (pp. 175-187). United Kingdom:
Palgrave Macmillan.
• Hutzel, T. and Lippert, D. (2014) Bringing jobs back to the USA: Rebuilding America’s
manufacturing through reshoring. United States: Productivity Press.
• Schaefer, D., Walker, J. and Flynn, J. (2017) August. A Data-Driven Business Model Framework
for Value Capture in Industry 4.0. In Advances in Manufacturing Technology XXXI: Proceedings
of the 15th International Conference on Manufacturing Research, Incorporating the 32nd
National Conference on Manufacturing Research, September 5–7, 2017, University of
Greenwich, (Vol. 6, p. 245). United Kingdom: IOS Press.
• Shrestha, U.B. and Bawa, K.S. (2015) Harvesters’ perceptions of population status and
conservation of Chinese caterpillar fungus in the Dolpa region of Nepal. Regional environmental
change, 15(8), pp. 1731-1741.
• Williams, K.B. (2018) The Caterpillar Way: Lessons in Leadership, Growth and
Shareholder Value and Demographics and the Demand for Higher Education. College
and University, 93(3), p.55.
References