Strategic Management Research Journal



Strategic Management Research Journal
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Strategic Management Research Journal
Caterpillar Inc.’s Short-Term and Long-Term Goals
Caterpillar Inc., like any other leading organization, specifies long-term and short-term goals to guide its operations and growth. The firm’s long-term goal is to enhanceprofitable development, which will enable itto invest in its products and services while also strengthening its position as a global leader (Caterpillar, 2018). Furthermore, the company intends to provide its clients with solutions that they could utilize to help contribute to sustainable development (Caterpillar, 2019). In terms of short-term goals, the firm has split them into two aims,product stewardship, and operations.
Some of the operational goals of Caterpillar Inc. include minimizing work-related injuryrates, by-product materials, the intensity of greenhouse gas emission, the intensity of energy, water consumption, and increasing the use of alternative sources of energy. In terms of product stewardship, the firm aspires to be a leader in providingsafety toits products’ consumersand improving its products’ sustainability through innovation and technology. In addition, the company’s goal is to boost managed fleet hours by over 100% from the previous years (2013 as the base year) and enhance remanufactured and rebuild enterprise sales by 20% from the base year (Caterpillar, 2019). Therefore, Caterpillar’s goals primarily focus on long-term viability and profitable growth.
How Mergers and Acquisitions have contributed to Caterpillar’s Success and Performance in Achieving Organizational Goals
Organizations may often chooseto acquire or merge with other businesses in order to attain strategic goals and gain a competitive advantage. Caterpillar Inc. has procured thirty corporations over the course of its history, with three of them occurring in the last five years. On the 28th of March, 2017, the firm procured Kemper Valve & Fittings Corp. Later on, in May 2017, Caterpillar then obtained Yard Club. Furthermore, towards the end of June 2020, it acquired Marble Robot, Inc. (Crunchbase, n.d.).
The above acquisitions have boosted Caterpillar Inc.’s performance and aided it in achieving its organizational goals. For instance, Caterpillar’s acquisition of Kemper Valve & Fittings Corp. broadened its product line, enriching its product portfolio with goods for the good service industry (Crunchbase, n.d). Since the visions of the two firms are aligned, the procurement of Yard Club has contributed to the attainment of Caterpillar’s organizational goals and brought more technological advances to Caterpillar (Lawler, 2017). Therefore, as a result of employing these acquisitions, Caterpillar Inc. has been able to solidify its market position and attain its objectives and goals.
Caterpillar Inc.’s Most Critical Merger or Acquisition
The acquisition of Bucyrus International by Caterpillar Inc. in 2011 may be regarded asthe most crucial as it has made contributions to Caterpillar’s success and performance in accomplishing its goals. Rothaermel (2016) mentions that the primary advantages of acquisitions and mergers are lower costs, increased differentiation, and reduced competitive intensity. Caterpillar Inc. was able to minimize competitive pressure from its competitors, especially Komatsu, by acquiring Bucyrus International (Pope, 2019). Furthermore, by adding major mining equipment to Caterpillar’s product line, this acquisition improved Caterpillar’s product differentiation (Pope, 2019). Aside from that, the buyoutwas pleasant, which is another indication of a successful purchase.
The Effectiveness of Caterpillar’s Organizational Plan for Global Strategies
Judging from the attainment of Caterpillar’s organizational goals, its operational plan for global strategies can be considered effective. Moreover, when it comes to marketing their products globally, organizations can choose between four types of global strategies: global-standardization strategy, multi-domestic strategy, transnational strategy, and international strategy (Rothaermel, 2016). In this case, Caterpillar’s global strategy can be categorized as transnational, as it integrates high local responsiveness with . The firm strives to position itself as a domestic entity in foreign markets by incorporating local aspects into its products. Furthermore, the organization’s global dealer plants and networks in various regions aid it in lowering costs (Pope, 2019). This strategy is efficient because it enables Caterpillar to retain its role as a leading manufacturer ofheavy equipment.

Caterpillar. (2019). 2019 sustainability report: Caterpillar’s environmental, social, and governance approach. Retrieved from
Crunchbase. (n.d). Caterpillar. Retrieved from
Lawler, R. (2017).Caterpillar acquired Yard Club, a marketplace for construction equipment.TechCrunch. Retrieved from
Pope, S. (2019).Caterpillar innovates as competition escalates.Morningstar. Retrieved from https://www.morningstar..
Rothaermel, F. (2016).Strategic management: Concepts(3rded.). McGraw-Hill Education.

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