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caterpillar final

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Information about caterpillar final
Business-Finance

Published on April 10, 2008

Author: Connor

Source: authorstream.com

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CATERPILLAR INC.:  CATERPILLAR INC. Olav Larsen Velia Jaramillo Octavio Gomez Christopher Nwihim Eric Berry Raul Salas Caterpillar History:  Caterpillar History Founded in 1925 as Caterpillar Tractor Company (Cat) by Benjamin Holt and Daniel Best The crash of 1929 hit Cat hard, but not as hard as many others – Orders from the Soviet Union During late 30’s – Sales increased as President Roosevelt started the huge road building programs In 1931 Cat perfected the tractor engine WWII – Contributions many and varied Postwar period – Cat experienced enormous growth due to massive rebuilding campaigns (Europe and Japan) Continued globalization Realized losses from 1982 to 1984 - Reexamine its activities – Implemented a new set of strategies Mission Statement:  Mission Statement Caterpillar will be the leader in providing the best value in machines, engines and support services for customers dedicated to building the world's infrastructure and developing and transporting its resources. We provide the best value to customers. •  Caterpillar people will increase shareholder value by aggressively pursuing growth and profit opportunities that leverage our engineering, manufacturing, distribution, information management and financial services expertise. We grow profitably. •  Caterpillar will provide its worldwide workforce with an environment that stimulates diversity, innovation, teamwork, continuous learning and improvement and rewards individual performance. We develop and reward people. •  Caterpillar is dedicated to improving the quality of life while sustaining the quality of our earth. We encourage social responsibility. Environment:  Environment Fortune 100 company One of 30 companies in the DJIA index Caterpillar specializes in the manufacturing of heavy vehicles for construction, agriculture, and mining Environment Cont.:  Environment Cont. Customers: Engineering firms Construction companies Mine operators Product line: Earthmovers Road building machines Mining related equipment POTENTIAL ENTRY OF NEW COMPETITORS:  POTENTIAL ENTRY OF NEW COMPETITORS New Companies entering the heavy machinery industry are not considered a major threat. COMPETITORS:  COMPETITORS Komatsu CNH Cummins John Deere 2003:  2003   EXTERNAL ENVIRONMENT:  EXTERNAL ENVIRONMENT Slow down in growth Customer Loyalty Bargaining Power Dollar Value INTERNAL ANALYSIS:  INTERNAL ANALYSIS MANAGEMENT MARKETING PRODUCTIONS/OPERATIONS RESEARCH AND DEVELOPMENT COMPUTER INFORMATION SYSTEMS FINANCIALS INTERNAL ANALYSIS:  INTERNAL ANALYSIS MANAGEMENT -Glen Barton CEO Major emphasis on employee performance. 69,000 Employees Worldwide. MARKETING Very specialized segment not really to the general public. Now pushing smaller machinery. PRODUCTIONS/OPERATIONS CAT Rental Power 23 Distribution centers in 12 countries/13 in US. 1600 Dealerships in 200 countries. INTERNAL ANALYSIS:  INTERNAL ANALYSIS RESEARCH AND DEVELOPMENT 4 MILLION EACH WORKING DAY COMPUTER AND INFORMATION SYSTEMS CAT BOAST THE BEST AND FASTEST COMPUTER NETWORK IN THE INDUSTRY LINKS FACTORIES,DISTRIBUTORS,AND DEALERS FINANCIALS:  FINANCIALS LIQUIDITY RATIOS 2002 2001 2000 COMP CURRENT RATIO 1.29 1.3 1.4 1.82 QUICK RATIO 1.05 1.02 1.11 1.3 LEVERAGE RATIOS 2002 2001 2000 COMP TOTAL DEBT .83 .81 .82 .84 PROFITABILTY RATIOS 2002 2001 2000 COMP PROFIT MARGIN 3.9% 3.9% 5.2% 2.29 ROA 2.41% 2.61% 3.4% 1.6 ROE 14.6% 14.36% 18.4% 7.8 Strengths & Weaknesses:  Strengths & Weaknesses Strengths Holds large portion of market share Growth through production not acquisition Distribution system High brand recognition 6 SIGMA Weaknesses Recent employee reduction Miscommunication between foreign and domestic managers Opportunities & Threats:  Opportunities & Threats Opportunities Expansion in third world countries Market sales overseas offer potential Tax breaks for better emissions Hydrogen fuel and solar turbine Threats Economic recession Tougher emission laws Low investment in Research and Development Strategy Formulation:  Strategy Formulation Retrenchment of Latin America New Product Lines aimed at Smaller Machinery Reposition Company Focus into Asian Market Increase Research and Development Strategy Formulation:  Strategy Formulation Retrenchment of Latin America Political Instability Economic Recession Devaluation of Currency Establish New Small Machinery Product Lines Large Market Low Barriers To Market Entry Diversify Product Lines Strengthen Brand Loyalty Strategy Formulation:  Strategy Formulation Reposition Company Focus into Asian Market Low Asian Market Share Recent Joint Venture with Mitsubishi Population Density Infrastructure Development Mining Potential Current U.S. & China Relations Increase Research Development Current Joint Venture with Fuel Cell Energy Inc. Stiffer Emission Laws Demand for Alternative Sources of Fuel Vision Statement:  Vision Statement Be the global leader in customer value. End Game Strategy Retrenchment in Latin America:  End Game Strategy Retrenchment in Latin America Advantages Reduce costs by downsizing employees, cutting benefits, and eliminating unnecessary expenses. Raise cash by leasing off some of the facilities that exist and selling machinery. Reduce inventory will eliminate overhead costs, storage and warehousing costs. Disadvantages Employee lay-offs will have to provide money for retraining and unemployment benefits. Slide21:  Space Matrix Internal Strategic position External Strategic Position Financial strengths (FS) Environmental Stability Return on investment +5 Rate of Inflation -3 Working Capital +5 Technological Changes -2 Cash flow +4 Competitive Pressure -2 Leverage +3 Price range of competing products -3 Political instability -4 Potential for war -4 Competitive Advantage (CA) Industry Strength Market Share -1 Growth Potential +6 Product Quality -1 Profit Potential +5 Customer Loyalty -2 Financial Stability +5 Technological know-how -2 Technological know-how +4 Control over suppliers and Productivity, Capacity Utilization +5 Distributors -3 Resource utilization +4 Product Market Strategies:  Product Market Strategies Asia- Market penetration with more sales personal, increase advertising, and better relations with the governments and contractors in the region. United States- Product Development with new riding lawn mowers and related items using better service through maintenance programs at an economical price. Diversification Strategies:  Diversification Strategies Concentric Diversification - adding the direct fuel cell power generator into the market with a joint venture with Fuel Cell Energy Inc. ACERT- Advanced Combustion Emissions Reduction Technology. THANK YOU,:  THANK YOU, QUESTIONS?:  QUESTIONS?

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