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Executive Summary

The document provides an executive summary of a strategic analysis report on Caterpillar Inc. (CAT), which is the largest player in the heavy equipment machinery industry. The analysis uses tools like PESTEL, Porter's Five Forces, value chain analysis, SWOT analysis, and competitor analysis to understand the external environment CAT operates in, its internal resources and capabilities, and its position relative to competitors. The report also provides 14 recommendations to help CAT maintain its leadership position and profitability as competition in the industry increases. However, the analysis is limited as it may not accurately forecast future industry conditions and fully capture regional competitors to CAT.

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Om Prakash
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227 views2 pages

Executive Summary

The document provides an executive summary of a strategic analysis report on Caterpillar Inc. (CAT), which is the largest player in the heavy equipment machinery industry. The analysis uses tools like PESTEL, Porter's Five Forces, value chain analysis, SWOT analysis, and competitor analysis to understand the external environment CAT operates in, its internal resources and capabilities, and its position relative to competitors. The report also provides 14 recommendations to help CAT maintain its leadership position and profitability as competition in the industry increases. However, the analysis is limited as it may not accurately forecast future industry conditions and fully capture regional competitors to CAT.

Uploaded by

Om Prakash
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Executive summary:

The Caterpillar Inc also called CAT is an organization which is the largest player in the industry of
heavy equipments machinery. The market is growing day by day and is expected to be around $195.0
billion by 2018 compared to $131.1 billion in 2013 in terms of forecast of the revenue with CAGR
(Compound annual growth rate) of about 8.3%.The report on Caterpillar based upon the strategic
view gives a reasonable understanding the competition in the market which is increasing consistently
because of new players and existing players strategic moves. In such cases its difficult for any
organization like CAT to maintain its market leadership.
The report addresses the issue of growing completion and threat for CAT to lose its market leadership.
To understand the market from the strategy point of view, the tool used External environmental
analysis as PART (A). The first part of the external analysis is PESTEL. This analysis is a concept in
marketing principles which is used here as a tool to track the environment where CAT is operating in
or are planning to develop and launch the new product, components and service etc. The report
elaborates the effect on CAT from every component of PESTEL. The second part of External
environment is the industry analysis where the tool used is PORTERS FIVE FORCE MODEL which
is the simple tool for assessing and evaluating the competitive strength and position of CAT in the
industry. The report indicates what must be the next move for CAT from strategic point of view using
porters forces. The third part of external environment is the competitors analysis. CAT is operating
into oligopolistic market structure where few major players are dominating the industry. The report
provide the assessment and completion of two major players John Deer and Komatsu ltd with CAT
based on their future objective, strategy, assumption, and capabilities.
The second phase of the report is PART (B) where basically internal environment of CAT is audited
which is based upon the resources and capabilities of CAT. The four attributes (Valuable, rare, costly
to imitate and non-substitutable) of resources and capabilities analyzed in the report for evaluating the
core competency of CAT. Further, the relationship is established between competitive advantage,
value creation and ability to earn the above average return using CATs core competency. The report
addresses the details of available tangible and intangible resources with the capabilities of CAT to
reveal the strength of CAT in the industry. To understand the parts of CATs operations under internal
analysis, the stress is given on the primary and support activities of value chain analysis. Also
addresses, how the value chain is important to analyze the decision making for rational decision for
outsourcing. In the next part of internal analysis SWOT analysis is done. The purpose of doing SWOT
is simple as it is the useful technique for assessing the companies strength and weakness which are
insight part of CAT and identifying the opportunities and threat which is the outsight part of SWOT.
The TOWS analysis also performed in order to take the decision making steps using through four

strategies SO-WO-ST & WT strategies. The report further analyzes the CPM ratings which indicate
how CAT is more effective compare to its competitors.
The last part of the Report is PART (C) where the report describes the sustainability and Fit for CAT.
It shows how CAT can have the leadership always in the industry working on its sustainable
principles and vision goal of 2020. The report also reflects the CATs move for its vision, mission and
values.
The last part of the report is the recommendation to Caterpillar based upon the strategic analysis under
PART (A), (B) and (C). CAT can further improve upon the 14 major points on recommendation which
will certainly help CAT to be the market leader always with handsome profit margin and social
values.
Limitations of the report: The report investigates the fact of the present industry environment which
has various limitations. Few of the major limitations include the non authenticity of the forecasting
figures. There is no surety how the industry is going to behave in the future and what will be the
impact on industry due to economical conditions around the world. Another limitation is the deep
comparison of the competitors with the local player of the industry in a particular region where John
Deer and Komatsu may not be the major competitor but some other local company may be the major
competitor.

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