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Caterpillar Inc. is the worlds largest construction machinery and equipment company. It produces, designs, and markets financial and machinery products. As the company notices on its website, for about a century, they have been helping customers build a better, more sustainable world and are committed and contributing to a reduced-carbon future (Caterpillar, 2022a, para. 1). In order to become and remain a successful and effective company, Caterpillar sets efficient short- and long-term goals, gets involved in mergers and acquisitions, and creates operational plans for global strategies.
Short-Term and Long-Term Goals
To begin with, the company defines its most required short-term and long-term objectives. To begin with, it is essential to notice that Caterpillar has experienced the effects of the COVID-19 pandemic, and many short-term goals of the company are aimed at overcoming these effects. For example, as noticed by researchers, the firm hopes to achieve its investor day operating margin targets in 2021 despite the impact of reinstating short-term incentive compensation and meet investor day free cash flow targets (AlphaStreet, 2021, para. 6). What is more, Caterpillar is extremely focused on sustainability but could not follow its usual sustainability practices due to the pandemic. Consequently, they expect to return to this strategy by reducing water consumption, greenhouse gas emissions, and waste (AlphaStreet, 2021). Other short-term goals include decreasing workplace injury levels and providing clients with the safest products. As for long-term objectives, Caterpillar generally aims to maintain its high market position (Caterpillar, 2022c). Further, the companys purpose is to create profitable growth, meet the needs of its customers and communities, become more competitive, and strengthen its position.
Mergers and Acquisitions
In order for any global company to develop, it is essential to collaborate with other firms. Mergers and acquisitions are ways to perform this collaboration and have mutual benefits. Overall, Caterpillar made sixteen acquisitions, and the most recent were Minetec and CarbonPoint in 2021 and Marble Robot in 2020 ( Overview of Caterpillars acquisitions, 2022). These acquisitions allowed the company to expand the range of products and services it offered to clients, become more competitive and strong in the market, and gain more technological advances.
The Most Critical Acquisition
It is possible to say that most mergers and acquisitions appeared to be rather effective for the company. However, the most significant one was in 2021, when Caterpillar completed its acquisition of the Oil & Gas Division ( Weir Oil & Gas ) of the Weir Group PLC, a Scotland-based global engineering business (Caterpillar, 2021, para. 1). This valuable combination of Caterpillars brilliant engines and transmissions and Weir Oil & Gas pressure pumping and pressure control portfolio allows to exceed customer expectations and increase performance (Caterpillar, 2021, para. 2). Therefore, this mutually beneficial decision may be considered very significant for the company.
Effectiveness of Caterpillars Operational Plan
It is possible to say that Caterpillars operational plan for global strategies is highly efficient because, as mentioned above, the company managed to become the best in the worlds financial and machinery market. As noticed by Benevolo et al. (2020), marketing global strategies can be divided into international, multi-domestic, global-standardization, or transnational. Overall, since the company focuses on reducing costs and having increased local responsiveness, the global strategy of Caterpillar is transnational (Caterpillar, 2022b). The firm tries to add local features and become a part of the local industry when entering other countries. This is rather effective because local customers have more trust in the company.
References
AlphaStreet. (2021). Caterpillar (CAT) counts on market recovery to meet growth goals. Web.
Benevolo, C., Penco, L., & Torre, T. (2020). Entrepreneurial decision-making for global strategies: A hearthead approach. Management Decision, 59(5).
Caterpillar. (2021). Caterpillar acquires weir oil & gas, launches SPM oil & gas. Web.
Caterpillar. (2022a). About Caterpillar. Web.
Caterpillar. (2022b). Strategy. Web.
Caterpillar. (2022c). Strategy & purpose. Web.
Overview of Caterpillars acquisitions. (2022). Tracxn. Web
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