Situational Analysis of Caterpillar Company

Question: Discuss about the Situational Analysis of Caterpillar Company. Answer: Introduction: Caterpillar Company is specialised in the manufacture of construction and mining equipment and diesel engines. The company designs and manufactures machinery and diesel engines and sells them through different channels and agents that are located across the globe. Interbrand ranked the Caterpillar brand as number 72 with a brand value 5,976$m. The brand calculation methodology focuses on determining the role of the brand and the value that it brings to the organization (Interbrand 2015, pp6). This framework is used to carry out financial evaluation that determines the performance of the brand within the market. This method uses brand, financial information, competitor data and market information that can be used to asses a brand and the benefits that the organization can have in investing in the brand. Situational analysis of Caterpillar was based on PESTEL analysis of the company that sis is based on analysing and evaluating the macro environment of the company focussing on Political, Economical, Social, Technological, Environmental and Legal factors. The analysis revealed that the company is involved in the business line where few firms have saturated the market. The factors help in analysing the business environment and the factors that affect the way the company operates and shape the business operations of the company. Caterpillar owns a portfolio of brands that pray different roles in the growth of the company and achievement of enterprise goals (Caterpillar 2014, p3; Caterpillar 2016, p4). The brand is a communication tool that represents the companys investment in the community. Thus the brand is an umbrella that shelters and covers all other brands of the company. Caterpillar company business strategy is based on three areas that focus on superior results, best team and being a global leader. Superior results within the company are achieved through the business strategy of profit after capital charge that ensures constant cash flow within the organization. This is to ensure that the company is able to manage its business operations adequately. According to the company business strategy of renewing strengths and shaping the future ensures that the company provides a work environment that ensures the employees make effective and productive use of resources that enable the company achieve its vision. Gillet, Fink Bevington (2010, p2) argue that the company uses six Sigma strategies to execute its business strategy. Caterpillar CEO Glen Barton introduced the six sigma tool in the company that ensured every employee participates in supporting the strategy. From the factory worker to the group president, each employee is aware of the activities that take place in the organization using the six sigma tool and their role in the business strategy. With the tool the companys business strategy is pegged on recognising the employee as the most important pillar in the organization. The tool is further used in problem solving within the organization and different business units (Slater, Narver 1995, p 65). The organization has further taught its suppliers and dealers on how to use the tool to refine the business models that they run. Business strategy and brand strategy in an organization are key elements in ensuring the success of any organization. Caterpillar Company is a global brand that has seen the company succeeds in the business environment. Customers and other dealers recognise the CAT trademark as an element that is used to woo customers and compete in the market. To compete with other dealers within the market, the role of the business strategy is to ensure that the business is able to overcome the challenges that may be faced in the business environment. Caterpillar uses the six sigma tool to run its processes and ensuring that the standards of brand quality are met. According to Christopher (1996, p58) brand architecture is used for marketing purposes while the brand quality is used to satisfy the customer. There is a thin line between the business strategy and the brand since they all play a role in ensuring that the market position of the company is achieved. This is seen in the establishment of mi ssion, vision and values of the organization. This means that the brand is an intersection of the business strategy since it forms the formulation of the strategy. Businesses that have not aligned their brands with the business strategy face challenges and competing within the business environment. The business environment is challenging and thus businesses that are not able to integrate their brand and the business strategy will not be able to compete adequately in the market with other global competitors and new entrants (Kohli Jaworski, 1990, p11). Therefore the business strategy and the brand of the organization are interlinked concepts that ensure the organization is able to meet its business needs and the relevance of the existence of the organization. References Caterpillar 2016. Company Brands. Available at https://www.caterpillar.com/en/company/brands.html Caterpillar 2014. Pestel analysis of Caterpillar inc. Available at https://myblog410-no2.weebly.com/blog/pestel-analysis-of-caterpillar-inc Christopher, M., 1996. From brand values to customer value , Journal of Marketing practice: Applied Marketing Science, Vol. 2 No. 1, pp. 55-66. Gillet John, Fink Ross Bevington Nick April 2010. How Caterpillar uses six sigma to execute strategy, Strategic Finance. Kohli, A.K, and Jaworski, B.J, 1990. Market orientation: The construct, research Propositions and managerial implications. Journal of Marketing, 54, 118. Slater, S.F., Narver, J.C., 1995.Market Orientation and the Learning Organization. Journal of Marketing. 59, 63-74. Interbrand 2015, Rankings. Available at https://interbrand.com/best-brands/best-global-brands/2015/ranking/