Caterpillar Inc: Implementation, Strategic Controls, and Contingency Plans

2120 Words5 Pages

Since its establishment in 1925, Caterpillar Inc. has built a name in the construction and mining industry as an excellent manufacturer of equipment for a wide range of applications. Today, the company is the market leader in the industry and now it targets to expand its operations globally. In the various emerging economies such as India, China, and Brazil, Caterpillar Inc. has sported potentially profitable opportunities which it needs to exploit before its competitors establish their presence in those markets (Rome & Levine, 2006). In this regard, Caterpillar Inc. has to have an effective business strategy and contingency plans as well as an effective implementation plan. This paper shall discuss the components of the implementation plan which Caterpillar Inc. needs to adopt in addition to the organizational management change strategies that would enhance successful implementation. The paper shall also outline a risk management plan including contingency plans necessary for defusing any identified risks. The discussion shall also include an outline of the success factors, budget, and forecasted financials which Caterpillar needs to base its expansion plan on.

For Caterpillar Inc. to explore new geographic markets particularly in Asia, it has to have a good strategy at the corporate level. At this level, decisions such as resource allocation, which markets to explore, and which products or services to develop are made. With regard to resource allocation, the focus needs to be on aspects such as how equipment, staffing, and cash will be distributed in the indentified markets. In addition to these, the corporate level also has the mandate or responsibility of deciding whether new services or products need to be added to the exi...

... middle of paper ...

...s by 50% and improving participation for health-risk assessment which has enhanced diagnosis of diseases (Caterpillar, Inc., n.d).

Caterpillar Inc. also faces the risk of its cash flow and earnings being affected by fluctuations in the exchange rates of currency, commodity prices, and interest rates. To control for this, the company’s Risk Management Policy ensures prudent management of interest rates, commodity prices, and exchange rates of foreign currency by allowing the use of derivative financial instruments. According to the policy, the derivative financial instruments are not supposed to be used for the purpose of speculation. In its pricing strategy, Caterpillar Inc. faces the risk of difficult shipping of its products. This risk can be encountered by offering its products on instalments and lease to its loyal customers (Caterpillar, Inc. (CAT), 2011).

More about Caterpillar Inc: Implementation, Strategic Controls, and Contingency Plans

Open Document