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Caterpillars International Strategy Essay

4246 words - 17 pages

Caterpillars International Strategy
The domain of international business theory contains an overwhelming array of perspectives and dimensions. International business (IB) definitions and assumptions are as diverse and ambiguous as their sources. Approaches to IB have established the fundamental perspectives as being global or organisational, but the content of these areas are immense. The development of the global approach, or more correctly labelled as ‘macro' (Rugman and Hodgetts 2000. pp. 24), has recently evolved in the 1990's as a result of the mixed organisational orientated approaches, otherwise labelled as ‘micro'. This discussion takes the form of analysing Caterpillar in the ...view middle of the document...

45 billion turnover in 2001 (annual report 2001). Their main products are divided as machinery with 58% of sales, engines with 33%, and financial products with 9%. The mission statement of Caterpillar is to ‘be the global leader in customer value'; this clearly indicates the attention to a high quality of service as being their competitive edge. This service is integrated through a sophisticated network of 1840 locations across all six continents, of these; Caterpillar has foreign direct investment (FDI) in 255 locations. The corporate strategy for the future is to bolster their leadership in the market through initiatives labelled by Data monitor (2003) and the annual report (2001) as being ‘profitable growth, championing continuous quality improvement, aggressively reducing costs, and developing an integrated e-business'. In attempting to understand the reality of Caterpillar's strategy, theories are applied to offer explanations behind the corporate publishing's.

The critical success factors associated with Caterpillar are primarily their h3 brand; this is then supported by network and service capabilities that represent reliability and consistency. Caterpillar is also renowned for product innovation; they have continually innovated which has contributed to the brand and reputation. The international market responds to positive brand vales because the nature of the industry requires trust and relationships.

The macro factors present are unlimited in the current dynamic world but the important perspectives are structured as political, economic, technological and social. The elements of these perspectives are selected according to the importance for Caterpillar; therefore they are discussed in this context with reference to relevant literature.

The political climate is continuously being developed and negotiated amongst the nationalities that exercise power. The current instabilities are dominated by the differences in opinion over the Palestine conflict and the Iraqi situation. As Caterpillar is active across the globe, its operations would need to be sensitively applied so that the local governments are appreciated. The situation of Caterpillar is slightly precarious due to the fact that in political terms, the Americans are seen as the bullying nation, which is a mentality that ideally Caterpillar would like to distance themselves from. On the other hand, the American political objective may provide an opportunity as reconstruction and other Caterpillar products may experience an increase in demand as a result of the speculated war (eg. tank engines and construction products). This circumstance for Caterpillar represents a relation's nightmare because in the home country it would need to communicate support in line with the public opinion, and in the host countries it may benefit from addressing the local perspective. E.g. the activities in China would be adjusted as to address the sensitive issues to ensure sustainability, rather...

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