Caterpillar Case Analysis

Executive Summary At the end of 1991, cat-o-nine-tails Incorporated, the debuts largest maker of heavy industrial engines and earth-moving equipment, faced rise monetary breathing outes, poor labor relations, and a lackluster grocery. The preceding(prenominal) disco biscuit dictum the family post its primary loss create the chief executive officer (CEO) to admit, Almost overnight the macrocosm changed on us. Ever since its foundation in 1925, Caterpillar has lead the heavy industrial equipment through innovation and value-added services. It was the first company to introduce a diesel tractor. The 1970s saw the depute of the most technologically advanced tractor in the world featuring a design that reduced repair and down season by as much 80% than conventional models. advance(a) designs and post-sales nu arrangeent commanded high premiums for Cat products and customers were willing to pay. In the primaeval 1980s, several(prenominal) factors combined to un dermine Caterpillars seemingly unbeatable market position. Commodity prices dramatically declined impacting Caterpillars old market segment, the heavy equipment used in mining, forestry, and oil drilling. Secondly, the US dollar rose in value against the Japanese Yen, efficaciously presenting Cats largest competitor, Komatsu, a 40% price advantage. In addition to these economic factors, labor relations reached a crisis depict culminating in a seven-month strike in 1982.

Caterpillar deputation responded to the crisis by launching a giant restructuring program trim its labor force and equity by forty and cardinal percent respectively. It also began to look to new markets, par ticularly the littler construction contracto! rs. To preserve market share in its occasion businesses, it slashed it prices- and profits to compete with Komatsu of Japan. Although losing eleven percent market share, it pricing strategy did prevent an almost certain macroscopic loss of market share. The company returned to profitability in 1985, provided management recognized that the companys long-term successfulness was far from certain. To secure a... If you want to get a huge essay, order it on our website: OrderEssay.net

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