Caterpillar Inc. Strategic Management

Strategic Management Research Paper / Journal Part 3
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Understanding the importance of strategic management is essential for any organizational leader. It allows him to have a better insight into the relationships between the external circumstances that the organization face and the internal structure of the organization that could increase its effectiveness amidst any challenge. Accordingly, this paper would focus on an analysis of Caterpillar Inc's (Caterpillar) measures and strategies to maintain an effective organizational structure and reduce threats that it faces from the competition by increasing its competitiveness in service innovation and price, among others. All in all, the author believes that Caterpillar's use of strategic management helps it maintain its status as one of the leaders in its industry.
Strategic Management
One of the reasons for Caterpillar's success is its use of effective and appropriate measures to verify its strategic effectiveness. According to the company's website, some of its primary focus areas are; (1) Better services, (2) Expanded offerings, and (3) operational excellence.
First, Caterpillar's focus on better services helps maintain its strategic effectiveness by ensuring that it continues to innovate and develop its client-centric approach. Notably, the company states in its goals that it aims to prioritize the use of "digital-enabled solutions and aftermarket growth." This could be seen in Caterpillar's concept of an "open innovation" as it partners with various institutions to continuously maintain its technological edge compared to other construction companies worldwide CITATION Catnd \l 1033 (Caterpillar.com, n.d.).
Second, the company also aims to focus its strategic effectiveness through an 'expanded offerings' approach. Although this might seem similar to their first goal, this approach focuses on the actual needs of their clients. This approach tailors its products to a more diverse clientele by expanding the number of products they manufacture and providing a combination of differentiated solutions to their clients.
Third, the company also focuses on "operational excellence" as it develops, builds, and produces using the highest quality standards. This includes a balance between sustainability, cost-flexibility, efficiency, and utmost priority for safety and security CITATION Cat21 \l 1033 (Caterpillar.com, 2021). This is an effective and strategic method for maintaining its advantage considering that companies with lower costs offerings could disrupt some of its product lineups like those in the hand-held construction equipment.
Finally, the company ensures that these strategic advantages are implemented through clear and quantifiable goals that they can measure through an increase in revenues. This connection between their goals and their results is one of the main advantages of the company.
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