Strategic Management Project Journal
Describe the role of strategic planning in achieving a competitive advantage.
The role of strategic planning is to help organization understand the dangers, shortcomings, qualities and openings they face for now and in the future. To stay ahead of all the uncertainties, it is recommended that an organization should establish a competitive advantage. The organization can gain a competitive advantage over its competitors through external and internal factors. Internal factors could be lowering the cost of products in comparison to the competitors or providing features or services that the competition does not offer which allows them to stand out more than the competition. External factors such as the response time the changing environment to technology or regulation gives them a competitive advantage to its competitors.
Strategic planning helps to recognize where a company is, where they would like to be
and what needs to be done to get there. A goal is set despite the natural dangers and opening setbacks and giving the qualities and shortcomings of the company.
Assess Caterpillar Inc. to determine whether their top focus is accounting profitability, shareholder value creation, or economic value creation.
Caterpillar Inc. is the most outstanding structure gear maker in existence however their top focus is on economic value creation. Their major economic fall was being faced with being bankrupt due to the one million dollars a day cost of recession. The company started downsizing due to the strikes, unfavorable currency exchange rates and global recession. There was a lot of competitor’s in the market and finally the CEO introduced a strategic plan including cutting costs by outsourcing, having investors putting more into the organization and offering incentives to their clients. With their hard work and management organization they generated high revenues.
Assess whether Caterpillar Inc. leverages the appropriate value and cost drivers for their business strategy.
Caterpillar Inc. business strategy was to maintain a quality and produce a value product within economical cost. Caterpillar used an information driven way to deal with control of the organization effective procedures. They used surveys to gather information about the suppliers, customers and competitors. The company outsource their products around eighty percent and keeping quality control which doubled their products from 150 to 300 with introducing more good products. This positioned their company on supported gainful development. Caterpillar continuously commits to understanding their clients needs by conveying their benefits. Business strategies are developed for organizations to be more successful in the market and used techniques like PESTEL and SWOT analysis to accomplish them.
Analyze the strengths and weaknesses of Caterpillar Inc’s competitive advantages.
Caterpillar is rated 44th amongst other companies. Their network of dealership expands all over the world and has a strong financial condition having 110 plants. Caterpillar distributes all the heavy machinery throughout the world such as bulldozers for construction, diesel and gas engines and tunnel boring machines. They have two hundred full line dealers that service 60% of the market. Its sound brand and healthy picture has empowered them to expand their client base. In 2003 the company faced short fall and sales volume decrease due to these downfalls it resulted in less revenue. They were only able to boost up revenues through their dealership network as most of their sales are done through the dealerships however after their down-falls they are showing no confidence for their new policies.
Evaluate the influence of ethics, social responsibility, and legal considerations on strategic planning.
Regardless of the size of a company decisions made should always surround the ethics, social responsibility and legal considerations of the company. I believe social responsibility is the most important in any organization. Caterpillar had to keep this in mind as they were globally known so they had to keep in mind social factors for every country and culture as new business plans were made. Companies gain good reputation by earning it; so, it is imperative that Caterpillar acts ethical always and demonstrate legal considerations when writing their code of conducts. Additionally, society must be taken into consideration as they are the ones that use or purchase the products and services as well as make up the workforce. Their voices need to be heard so you know their needs and wants so you can fulfill them.
Discuss the value of corporate social responsibility (CSR), and determine if Caterpillar Inc.’s CSR meets those values.
Corporate Social Responsibility or CSR is how an organization impacts the world around them through ethical and legal standards. Caterpillar has invested critical time and asset to advance the well-being and monetary security of our networks. They look for ways to help the environment through sustainable efforts while helping their stakeholders make a profit. In 2017 their revenue of 45,462 billion dollars with their main segments transportation, energy, construction industries and resources industries.
Analyze the role of ethics and social responsibility in developing Caterpillar Inc.’s strategic plan while considering stakeholder needs and schedules.
It’s very important to Caterpillar that they have a great relationship with their workers and making sure they have rights; the role of ethics and social responsibility is very vital. Stakeholders are all individuals involved with the organization. Caterpillar knows that they can only be successful if they are in sync with the needs and agenda of their stakeholders and they have done a phenomenal job doing so. The introduction of earning per share (EPS) has helped to gotten rid of most of the labor grievances and saved Caterpillar up to ten million dollars.
References
Community Engagement (CSR). (n.d.). https://www.caterpillar.com/en/company/global
footprint/apd/india/making-a-difference.html
https://www.3blmedia.com/Profiles/Caterpillar-Inc