Caterpillar large equipment manufacturer

Mining, Revenue Acknowledgement, Logistics, Solar Power

Excerpt from Thesis:

The company is continuing to grow substantially in the last several years regarding revenues, profits and share cost. In 2008, however , you can actually share selling price has dropped 45. 3% from the beginning of the year. Because the financial crisis spread offshore, Caterpillar’s coverage of geographic diversification reaches risk of staying insufficient to insulate the firm by global economic catastrophe. Keeping the current path, however , recognizes the long lasting strength with their strategy. Furthermore, it permits the company to continue to strengthen a few its existing new initiatives, such as it is logistics business, railroad supplementary and its photo voltaic turbine business. Caterpillar often takes a cautious approach to building and including new businesses so drastic moves right now might not fit with you can actually overall approach.

Another alternate is to always expand in to different catalog. Caterpillar contains a strong, well-known brand name. They may have successful came into financial services and apparel applying that company and its associations. Caterpillar could potentially expand in other areas, including ATVs or light vans, that employ many of the same technologies that their current products include. Cat could use a partnership or a licensing agreement to be able to penetrate these types of new market segments, just as they did with clothes. There would be issues, however , because Caterpillar would be moving away from their particular core expertise. Moreover, their very own other undertakings have not however contributed significant revenue or profit towards the company. The three main lines still be the cause of almost all of Caterpillar’s business.

Another alternative will be to expand in new solutions. The company has increased their investment in technology lately in identification of the fact that technology is a significant driver in their existing industries. There are considerable opportunities offered to develop clean engine technology, more efficient large equipment, or new electrical power technologies. The business already operates in the photo voltaic turbine solutions industry, and has the potential to leverage a selection of their capabilities in heavy gear to production the technologies necessary to create green energy, or to make significant improvements in existing green technologies.

A fourth approach to Caterpillar is usually to pursue growth through purchases. Caterpillar is one of the largest players in each of their primary industries. Many of these industries are headed toward maturity and consolidation. Consequently , Caterpillar must start that trend by purchasing some smaller rivals. This will reinforce Cat, and increase their market share. The company gets the financial ability to finance acquisitions with money, and the current depressed share prices produce some of their opponents unusually inexpensive. The downsides are which the competitors may well not have much value further than market share, which is why Caterpillar would likely pay fair market value. Acquisitions at this stage of Caterpillar’s existence cycle would be best conducted to get strategic uses rather than simple market share profits.

The suggestion for Caterpillar is to always pursue their particular current opportunity. Caterpillar’s economical performance recently has been quite strong, indicating strong congruence among their tactics and their targets. Even with the economic downturn, Kitten has been rewarding in every 1 / 4 this year. In addition, key market sectors such as mining and oil gas are still booming, despite slowdowns elsewhere in the economy.

Thus, there is certainly little to point that Caterpillar is lacking in any location. Every year, a story emerges about Caterpillar suffering in one area or another, nevertheless overall the corporation has constantly grown earnings and profits. There is no sign that a proper shift at this moment would be of any benefit to Caterpillar. Given that the organization has a old-fashioned culture and is accustomed to a relatively slow pace of transform, a major tactical shift ought to only be taken on in response to a major opportunity or threat. There definitely seems to be neither intended for Caterpillar at present. They are managing the monetary, cyclical and competitive threats well. They have been able to take advantage of strategic chances, such as the transfer to transportation with their recent purchases of logistics and railways, or perhaps their move into finance and insurance. Despite all of the problems that Caterpillar faces, they may be still lucrative, still industry leader, and possess no significant signs of vulnerability.

Works Reported

Corporate and financial information from Reuters news agency. Retrieved December 3, 08 at http://www.reuters.com/finance/stocks/companyProfile?symbol=CAT.N

Corporate information from Caterpillar Inc. Gathered December a few, 2008 at http://www.cat.com/cda/layout?m=37400x=7

3 years ago Caterpillar Incorporation. Annual Statement. Caterpillar Incorporation. Retrieved Dec 3, 2008 at http://www.cat.com/cda/files/887773/7/AR_2007_final.pdf