During group discussions we revealed two main problem areas – internal problems and external problems. As an executives of the company we can't solve external problems and we must concentrated on the solving internal problems.
Caterpillar has strong position on the market with good geographic diversification but at the same time company use American style of operating all over the world. In order to save leading position company should change their view of selling their products abroad especially in Asian markets. China and Korea are two of the most perspective markets in this region and it is very important to have good business relations with local companies.
Another problem connected with lack of innovations and outdated production methods. The fact is that Asian rivals (Komatsu) use more modern technologies of production with cheap labor. It affords them to invest more money in research and development. Caterpillar must review their production placement policy in order to produce their goods more efficient.
If we look at the map of spreading Caterpillar's production in the world we can see that most of factories are based in US and Europe. But now the most perspective markets are Asia and South America. It means that company should spend a lot of additional money for delivering their products in this markets.
There are also some problems with HR inside the company. Lack of cooperation between employees and employer is what we define according the business information about Caterpillar. This problem may lead to declining of productivity and fall of revenue as well. This problem could be solved by having good relations with labor unions and also we may organize some events for employees in order to improve their loyalty.
The last problem which I want to mention is that in the end of 90'th Caterpillar underestimated the potential of e-commerce. Internet is a very good way of advertising their products and services. Also it is good way to build strong dealers network and gain competitive advantages.
If we try to define opportunities of the company we could say that there are many positive factors for world construction market. In near future there would be such huge perspective markets as South America, China, India, Korea, and East Europe. Caterpillar has opportunity to become the leader in these markets. But becoming a leader means that company has to have the best products, strategy and management style.
The strategy making process is the most important and most vulnerable aspect of the company and all recourses should be directed to make it better, stronger. The good strategy of the company solves majority of the internal problems and the success of the company directly depends on its strategy.
