Historical Analysis Of Caterpillar ( Cat )

1945 WordsMar 28, 20168 Pages
Historical Analysis and Introduction Caterpillar (Cat) developed and then leveraged key competencies necessary in order to become the go-to provider of “earthmoving construction, and material-handling” equipment within the United States (US) and foreign countries before the competition (Bartlett, 1991, p. 1). Cat was a pioneer in their own industry. They met the needs of their target markets before anyone else was capable. Their dominance was a result of strategic foresight which developed into a differentiation strategy securing leadership share of the market. Cat must have realized that “the baby and the suburban boom” of the 50’s, a result of the end of World War II, would create a need in the marketplace for increased construction…show more content…
Accordingly, they were tasked with creating a new strategy based on strategic intent and guided by strategic architecture. The following text discusses and analyzes the strategy of the past and those needed for the future while identifying single biggest problem which will impact the organization’s ability to effectively realize their strategic intent. Cat’s genetic coding was based on the belief that they would remain the market leader – they believed the competition would never be able to touch them. When Komatsu emerged as a competitor Cat’s reaction was to increase their prices “by 10%” (Bartlett, 1991, p.2). This is evidence of their inability to believe that competition would result in a viable risk to the organization – a side effect of genetic coding. Many of Cat’s values and leading principles were based on their high prices - they believed their customers held a positive correlation between price and quality (Bartlett, 1991, p. 2). It appears as though Cat believed that additional price increases would result in maintenance of market share. Another side effect of genetic coding was the inability to see what the market truly values and needs (Hamel, 1996, Kindle location 1060). Further evidence of genetic coding exists within the corporation’s unwillingness to address the need for change and diversity. Cat promoted from within exclusively (Bartlett, 1991, p.2). They did not believe that outsiders would add value, as they already knew
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