Caterpillar Case Study Essay Example
II. Introduction
The caterpillar was failure and lost many of money. The major competitor was Japanese company called Komatsu. The caterpillar faced global challenge, So it must to reinvent itself, or die. By George Schafer and Donald Fits between1985 – 1999, caterpillar improved itself. It improved all the structure for the company. In 1999 the CEO was Glen Barton. After that the company declined in sales and earnings. Caterpillar produce earthmovers, road building was by Benjamin Holt, when he nicknamed his tractor. II. Situational Analysis
1) External analysis:
A. Porte's five forces: * Risk of new entrants:
Risk of new entrants is low because the new entrant not able to implement the same strategies in the big companies. The big companies implement number of strategies that made high barriers such as R&D, innovation, economies of scale, and high quality. The equipment industry is very costly for new entrants. * bargaining power of buyers:
Bargaining power of buyers is moderate because there are many choices in the market but Caterpillar still have a good reputation, quality, customer responsiveness and brand loyalty in the marketplace. * bargaining power of suppliers:
Bargaining power of suppliers is high because Caterpillar depend on outsources products and sell these product under its brand name, so the suppliers can increase the product prices or sell these products into other companies.
Threat of substitutes:
Threat of substitute is high because there are alternatives products from other companies in the same industry such as Komatsu, Volvo, and Deer. These products are available for customers in different locations of the world and some of these products are lower price than Caterpillar. * Rivalry among established company:
Rivalry among established company is high because there are high competition in the equipment industry and many of companies compete with Caterpillar such as Komatsu, Volvo, Terex, and Deer. All of
The caterpillar was failure and lost many of money. The major competitor was Japanese company called Komatsu. The caterpillar faced global challenge, So it must to reinvent itself, or die. By George Schafer and Donald Fits between1985 – 1999, caterpillar improved itself. It improved all the structure for the company. In 1999 the CEO was Glen Barton. After that the company declined in sales and earnings. Caterpillar produce earthmovers, road building was by Benjamin Holt, when he nicknamed his tractor. II. Situational Analysis
1) External analysis:
A. Porte's five forces: * Risk of new entrants:
Risk of new entrants is low because the new entrant not able to implement the same strategies in the big companies. The big companies implement number of strategies that made high barriers such as R&D, innovation, economies of scale, and high quality. The equipment industry is very costly for new entrants. * bargaining power of buyers:
Bargaining power of buyers is moderate because there are many choices in the market but Caterpillar still have a good reputation, quality, customer responsiveness and brand loyalty in the marketplace. * bargaining power of suppliers:
Bargaining power of suppliers is high because Caterpillar depend on outsources products and sell these product under its brand name, so the suppliers can increase the product prices or sell these products into other companies.
Threat of substitutes:
Threat of substitute is high because there are alternatives products from other companies in the same industry such as Komatsu, Volvo, and Deer. These products are available for customers in different locations of the world and some of these products are lower price than Caterpillar. * Rivalry among established company:
Rivalry among established company is high because there are high competition in the equipment industry and many of companies compete with Caterpillar such as Komatsu, Volvo, Terex, and Deer. All of