Long and Short Term Goals of Caterpillar Inc

MGT/498 Strategic Management
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Strategic Management: Caterpillar Inc. Case Study
Question 1: Answer
Caterpillar's short-term goals comprise what the company plans to accomplish within one year, whereas long-term goals are those that extend beyond the current financial year. The company's short-term goals are to provide reliable water sources and enhance food production and decent housing (Caterpillar Inc., 2020). Caterpillar's long-term goals include providing a conducive environment that will spur corporate growth while boosting productivity through cost-effective solutions and ensuring efficient use of resources. Still, Caterpillar aims to boost product development and manufacturing sustainability to reduce ownership costs (Caterpillar Inc., 2019). Also, it aims at creating an environment that is suitable for global expansion and optimal capital utilization. The goal is to design and construct a production facility that complies with leadership and environmental sustainability (Dugan, 2011). In addition, Caterpillar plans on cutting down energy emissions by half during the current financial year.
Question 2: Answer
Mergers and acquisitions in the past three to five years have boosted Caterpillar's overall performance. While research shows that 20% of acquisitions succeed, Caterpillar's string of M&As has had a positive impact on the company's growth (Dupin, 2014). The M&As immensely improved the company's level of capitalization that enhanced its potential to access credit and bid for mega contracts. Given a high level of capitalization, the company has adequate resources to compete and finance its international and transnational strategies. Also, the M&As availed skilled human resources while providing access to foreign markets. The M&As were aligned to CAT's strategy of creating a conducive environment for growth and expansion since it reduced competition. They are also aligned to the long-term goal of expanding production cost-effectiveness to lower the cost of ownership since the company would leverage international subsidiaries to reduce production costs. The M&As enhanced the CAT's stock price, capital base and opened new growth opportunities. They introduced new synergies and economies of scale used to achieve market dominance and low ownership costs. Through M&As, Caterpillar managed to achieve lower taxes in foreign jurisdictions (Caterpillar Inc., 2019). The M&As have also had drawbacks, such as losses resulting from overvalued acquisitions and intercultural conflict in the foreign subsidiaries.
Question 3: Answer
Caterpillar has acquired over 36 companies through M&As, and two in the past three to five years. These two were private equity firms while also divesting from eight assets. Caterpillar's largest and most critical merger happened in 2010 through the acquisition o...