Caterpillar Inc.

Table of Contents

Caterpillar Inc.

Strategic management can be defined as managing a firm’s resources, goals, and objectives to make it more competitive. It involves analyzing the firm’s internal and external environment, setting objectives, and evaluating strategies to help it achieve its objectives and goals. This paper seeks to evaluate the strategic management of Caterpillar Inc., the world’s top construction equipment manufacturer. The company aims to grow profitably and provide its customers with value while rewarding and developing people. The company also aims to promote economic growth and contribute to a sustainable world.

Caterpillar Inc was formed in 1925 when there was a merger between two companies. The company has the most significant global presence in the industries they serve. Th services and products provided by this company have helped people worldwide improve their lives. The strategy of the company mainly reflects the company’s commitment and legacy to meet the needs of the community and the customers. The company works with its partners to enable them to achieve their goals.

A company’s strategy is said to be effective if it aligns with the firm’s goals and gives a plan for the firm to achieve these goals using the available resources. Because resources are limited, a company’s strategic decisions’ success results in the firm’s competitive advantage. Caterpillar Inc gives the impression of having effective strategic management. The organization can apply the Execution and Operating Model, from which it assigns resources to the areas in business that bring more profits and growth. Caterpillar’s strategy, therefore, is in line with the company’s goal and can be said to be effective.

The company’s organizational structure is arranged to ensure the company can manufacture its products and deliver them to customers. The leader of the company is the Chief Executive Officer, who also acts as the Chairman of the Board of Directors. The board is made up of approximately twelve independent directors. The board also consists of presidents who supervise over twenty vice presidents in charge of the company’s operation in different geographic locations and business areas.

Caterpillar Inc’s organizational structure is a holacracy. This is because the organization tries to attain coordination and control by giving authority and power to self-organizing groups of employees. Because Caterpillar Inc is divided into groups working in different business areas and geographical locations, the company can self-organize and perform specific duties related to its specialization. Since Caterpillar Inc is decentralized in nature, we can regard it as a holacracy.

The company’s leader should understand the company’s internal and external environment to enhance competition and improve the business operation. Changes in both the internal and external environment of the company have an impact on the company’s strategy and its competitive advantage. Understanding the company’s strengths will ensure that the leaders can still respond to challenging situations and sustain competitive advantage.

Caterpillar Inc is a global company and operates in a very competitive environment. The competition is more in foreign markets since the exchange rates and regulations may make the company’s products less competitive regarding price. Caterpillar Inc, however, responds to these external shifts by focusing more on improving its customer service and providing high-quality products. The company responds to internal changes by investing in R&D and manufacturing new products to meet the changing needs of consumers.

The company may focus on designing and manufacturing new products to offer solutions to emerging consumer needs and expand its product line. Focusing on new products will transcend the answers provided by the company’s competitors and support the company’s strategic objective and market growth. Caterpillar Inc. will be able to sustain its competitive advantage and improve business performance.


Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and Cases: Competitiveness and globalization. Cengage Learning.

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