Strategic Management Research

Strategic Management Research Journal Part 4

1. Identify Caterpillar Inc.’s short-term and long-term goals

The short-term goals of Caterpillar Inc. include to reduce operating costs by 10 percent, to retain customers, and to deliver superior earnings in the next twelve months(Caterpillar, 2020). All these goals are aligned with the strategic plans to ensure that the company attains them within the stipulated period. Also, the employees are required to follow the set roadmap in order to achieve the short-term goals.

Caterpillar’s long-term goals include to decrease energy intensity by 50 percent, to reduce the emissions intensity of greenhouse gas by 50 percent, to become global leader in heavy equipment industry, as well as to deliver superior financial results in the next five years(Caterpillar, 2020).  Another long-term goal is to increase its market presence across the world. It is worth noting that the management and the employees are determined to achieve the long-term goals. They have put in place appropriate measures to track the attainment of each goal against the set criteria.

2. Evaluate how mergers and acquisition in the last 3-5 years have contributed to Caterpillar’s performance and affected its organizational goals

Mergers and acquisition in the last 3-5 years have contributed positively to Caterpillar’s performance. Courtesy of strategic alliances from mergers and acquisition, the company has recorded sharp increase in sales revenue in the last four years. For example, the total sales revenue of the company has risen from $38.537 billion in 2016 to $53.8 billion in 2019 (Yahoo Finance, 2020). This has been attributed to the significant benefits of mergers and acquisitions.

The company has reported sharp increase in sales revenue because its mergers and acquisitions have enabled the company to eliminate redundant costs. It has also increased market share through expanding to other countries and new clients willing to try new products made courtesy of the mergers or acquisition (Pallavi Gogoi, 2010). Also, mergers have enabled the company to reduce competition, thus increasing profit margins and spurring innovation.

The mergers and acquisitions have also enabled the company to attain its organizational goals. Caterpillar has been able to increase its market presence worldwide after it acquired or merged with other companies. It also attained superior results after it penetrated new markets across the world. In addition, the company has acquired talented and skilled employees which has been a major goal since 2010 (Pallavi Gogoi, 2010). Currently, it has competent employees who can spur innovation and deliver positive performance.

3. Determine the most critical merger or acquisition that has contributed to Caterpillar’s performance and success in achieving organizational goals. Defend your choice

The most critical acquisition is that of Bucyrus International Incorporated for $7.6 billion(Pallavi Gogoi, 2010).  It is the largest and most profitable acquisition deals since 2010. This acquisition contributed to the positive performance of Caterpillar, as well as achievement of its goals. It permitted the company to attain its goals of delivering superior financial results, increasing market presence, as well as expanding its operations into emerging markets. The company has achieved its organizational goals since the acquisition of Bucyrus has allowed it to add a new line of mining equipment, which has attracted huge demand in developing markets(Pallavi Gogoi, 2010). This is the reason why Caterpillar has reported sharp increase in sales from emerging markets in the last four years. Courtesy of this deal, the company was able to expand its operations. Therefore, the company should consider other deals that can make it more competitive in the global markets.

4. 4. Evaluate the effectiveness of Caterpillar’s operational plan for global strategies (international, multi-domestic, global-standardization, or transnational. Including supporting research or data

Operational plan of Caterpillar has been effective for international strategy and multi-domestic strategy. With strong operational plan, the company had everything it needed to address its priorities successfully, and ultimately attain the goals that were driving its strategic vision. Caterpillar has been able increase its presence in global markets. The operational plan has strived to address the exact needs and expectations of customers in these segments(Hitt et al., 2012). Courtesy of its effective operational plan, the company is serving the six continents of the world, which include Africa, Europe, North America, South America, and Asia(Caterpillar, 2020). . Equally, the operational plan has been effective for global standardization. The company is able to use standard marketing globally. By having a standardized marketing, the company has saved time and money by 10 percent in its marketing activities(Caterpillar, 2020). This has been possible since the company has the most effective operational plan for international strategies.