Strategic Management Research Paper

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 Introduction

Caterpillar Inc. which is abbreviated as CAT is an international which is known for

designing, developing, engineering, manufacturing, marketing and selling machinery, engines,

financial products and insurance to their customers. The company is known to have captured the

global market. The company is based in America (Melo, 2017). Just like any other company,

CAT manages their operations through setting both long term and short goals which must be

achieved to measure the success of the business. It is also clear that the organization has been

involved in mergers and acquisitions of which some have been successful while others not.

Therefore, this report will look into strategic management operations of Caterpillar Inc.

Short-term and Long-term goals

Every business organization would have both long term and short term goals to help

achieve both the vision and mission of the company. Short term goals can be achieved within a

period of one year while long term goals should be achieved from 2 years going forward.

The main mission and vison of the company is to help humanity achieve their basic

needs. Therefore, the short term goals are connected to the mission of the company. Some of the

short term goals that the company would always wish to achieve in every financial year is

providing housing, food and clean water to different people in different communities. The

company is aimed at addressing the basic needs. The long term goals of the company is to have a

better growth in climatic activities and opportunities for businesses that use capital efficiently

and effectively.

Mergers and acquisitions contribution to performance of the company

 Mergers and acquisitions are always very important as they determine the success of

companies. Caterpillar Inc. has been involved in several mergers and acquisitions over time. In

most cases, the success rate of the company has always increased by 20% when they get

involved in mergers and acquisitions. The company has acquired or merged with other subsidiary

companies in order to boost their own business into competitors in the global market. The

company was struggling in concluding some of the contracts but getting involved in mergers

affected the company in many ways. The company was able to achieve better equity prices, a

good capital base and growth prospects. The company was also able to benefit from the

synergies of scale which was a benefit from acquisitions.

The most critical merger for the company

As much as the company has been involved in several mergers and acquisitions that has

affected the company positively, there are three acquisitions that has been seen as the critical

ones as they have positively affected the company in conditions when most people were not

expecting. In 2005, CAT acquired SEM, a company that is based in China and the acquisitions

helped the company to realize a boost in returns. In 2011, the company acquired Bucyrus with

expectations and they generated more than $500 million in five years. Lastly, in 2017, the

company acquired Yard Club with the aim of increasing the production efficiency and increase

their presence in the global market and the aims for the acquisitions were achieved. Thus, the

highlighted three acquisitions above have proved to be critical for the company (Lynch &

Haskins, 2019).

Effectiveness of operational plan

 The main focus of Caterpillar over the years has been to improve the performance of their

workforce. This is done with the aim of meeting the demands of customers who are very diverse

being that the company is an international one serving all the customers in the global market.

The executive team of Caterpillar company are known to be carrying out comprehensive market

analysis before they can make a decision of investing in a certain market. This is done with the

aim of making sure that their customers will create value for their products. Another strategic

operational plan that has been used by the company overtime is maintaining a high profile brand

in the global market and this has always been achieved by maintaining quality products and

making sure that they meet the needs and expectations of their customers (Ridley, Ijomah, &

Corney, 2019). Lastly, the products which are being manufactured by the company is done based

on geographic location and the needs of the particulate segment. The company also has

principles of operations which are excellence and integrity, teamwork and commitment.
 Reference

Lynch, L. J., & Haskins, M. E. (2019). Caterpillar Inc. Taps the Chinese Bond Market. Darden

Case No. UVA-C-2418.

Melo, J. M. C. D. S. (2017). Equity report on caterpillar Inc (Doctoral dissertation).

Ridley, S. J., Ijomah, W. L., & Corney, J. R. (2019). Improving the efficiency of remanufacture

through enhanced pre-processing inspection–a comprehensive study of over 2000 engines

at Caterpillar remanufacturing, UK. Production Planning & Control, 30(4), 259-270.