The history of the Caterpillar Company is important because it establishes the foundation for Caterpillar senior management decisions. It provides an suitable background for those decisions as well as the corporate culture that existed at the time of this case study. The historical analysis will also provide a back light for evaluating Caterpillar’s current and future economic position and it strategic intent.
For almost a half century (1940 to 1981), Caterpillar had dominated the worldwide earthmoving equipment (EME), construction and materials handling industry. How did this happen? You will not find the answer in the case study or in the reading materials. The answer is found in the historical context of the time. Use your critical thinking to develop an answer. How did Caterpillar achieve world dominance?
As a result of this dominance, discuss evidence of genetic coding in the decisions and actions of Caterpillar employees and managers.
Caterpillar’s product prices might have been excessive. Discuss why the pricing structure was unusual to say the least.
Discuss the existence of denominator management in corporate executive decisions that were made once the emergence of Komatsu as a major competitor was “recognized.”
Did Caterpillar have a strategy prior to 1981? Did it have a strategic architecture in place during this same time? What was the firm’s strategic intent prior to 1981?
Key Management Issues
The only manager of importance is George Schafer. Lee Morgan was Schafer’s predecessor and Don Fites was his successor and are only secondary characters in this case. Focus your analysis on Schafer.
Discuss Schaefer’s attempt to develop a long term posture for Caterpillar.
Identify the major components of Schafer’s initiatives. Were the initiatives designed to support a specific business level strategy? Why or why not?
Are Schafer’s initiatives part of an identified strategic architecture? Why or why not?
Has the strategic intent of the company changed as a result of Schafer’s initiatives? If the strategic intent has changed, describe how it has changed.
In this case, the internal competition is much more important than the external one, although both exist. Caterpillar must unlearn the past in order for it to continue as a company into the future. You should focus your attention primarily on the internal situation, although there will be a few external influences of which to take note.
Caterpillar did not recognize any external competition until it was almost too late for the company. Describe how the internal focus of caterpillar’s management changed from 1945 to 1984. What external factors caused the intrnal focus of the Caterpillar managers to evolve?
Discuss Caterpillar’s employee reations and management policies froma strategic intent perspective.
The business environment should be analyzed from a future perspective. It is important to identify Schafer’s initiatives and their potential impact on Caterpillar’s future business.
Discuss the new Manufacturing Thrust. What is it intended to do? What parts of this iniitiative could fit into a strategic architecture for Caterpillar. Defend your position here.
Discuss the new Market Approach. What is it intended to do? What parts of this iniitiative could fit into a strategic architecture for Caterpillar. Defend your position here.
Discuss the new Organization Environment. What is it intended to do? What parts of this iniitiative could fit into a strategic architecture for Caterpillar. Defend your position here.
Discuss the new Products. What is it intended to do? What parts of this iniitiative could fit into a strategic architecture for Caterpillar. Defend your position here.
Identify the single problem or issue facing the corporation based on the analysis you have completed to this point in the case study. Use the analysis, chapter readings, and readings provided in the assigned articles and in the on line lectures to assist in the problem identification.
What options are available to the company to mitigate the issue that you have identified? Do not identify an option unless you have develped it in your analysis prior to this point in the case study. discuss, in some detail, two or three possible options that will address the problem. In each option, discuss how it will mitigate the problem or issue and give the advantages and disadvantages that are related to each option
Which of your identified options are most applicable to the company in the case situation? Your recommendation must be one of the options you identified. Choose one of the options that you identified above and recommend that it be implemented to solve the identified problem or issue. Discuss in some detail why you recommend this option.