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Review the Strategic Management Project Background document.

Review the following terms and concepts discussed this week to prepare for this assignment:

• vertical integration
• taper integration
• backward vertical integration
• forward vertical integration
• strategic alliances
• global strategy
• international strategy
• innovation

Create a Word doc and title it Strategic Management Research Journal Part 4.

Write a 525- to 700-word response to the following prompts in your journal entry:

1. • Identify Caterpillar Inc.’s short-term and long-term goals.
   • Evaluate how mergers and acquisitions in the last 3-5 years have contributed to Caterpillar Inc.’s performance and affected its organizational goals. 
   • Determine the most critical merger or acquisition that has contributed to Caterpillar’s performance and success in achieving organizational goals. Defend your choice.
   • Evaluate the effectiveness of Caterpillar’s operational plan for global strategies (international, multi-domestic, global-standardization, or transnational). Include supporting research or data.

Note: You will use information from this entry in your presentation due in Week 5.

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ANSWER

Strategic Management Research Journal Part

Strategic Management Research Journal Part 4

Caterpillar Inc.’s short-term and long-term goals

Some of the company’s short goals include designing a new facility construction, which will help it meet the leadership in energy and environmental design. The firm also aims to reduce energy intensity by 50 %. Caterpillar Inc. also aims to reduce its greenhouse gas emissions by 50% soon, where it also seeks to use alternative, renewable sources, which will help it meet its 20% of the energy needs (Caterpillar Inc., 2020). The company also seeks to reduce its water consumption intensity by 50 % and reduce its by-product material intensity by 50%. A final short term goal of the firm is to reduce the recordable workplace injury rates to 0.6 and lost time cases due to the injury to 0.15 to make sure that it provides a conducive and safe environment for its employees.

For its long term goals and objectives, the firm aims to leverage technology and innovation with the aim of improving the sustainability of its products, services, and solutions to its consumers. The firm, in its long run, also seeks to increase managed fleet hours by hour percent. Its other long term goal is to increase its remanufactured business sales by 20% (Caterpillar Inc., 2020). The firm also looks forward to providing more leadership in people’s safety, more so in matters concerning the products it makes.

How mergers and acquisitions have contributed to Caterpillar Inc.’s performance and affected its organizational goals

Mergers and acquisitions have been very vital in the growth of Caterpillar Inc. In the last 3 to five years, Caterpillar has acquired around 35 companies, where it mostly targets machinery and electrical equipment (Macrotrends, 2020). This has had many advantages, where it has led to its overall growth. The company also has a broader consumer base as compared to before engaging in the M &A. The firm has also been able to gain a broader consumer base, which reflects its profit margin. Mergers and acquisitions have also offered Caterpillar Inc. new possibilities in the new markets hit has gained access to.

The most critical merger or acquisition

The most significant M&A that has contributed to Caterpillar’s performance and success in achieving organizational goals is Bucyrus International, which was acquired for $7.6B (Macrotrends, 2020). This acquisition made the company have a more significant revenue stream and maximized its profit growth. Through the acquisition, Caterpillar was also able to have a more extensive human resource, hence adding people with skills and prowess in its processes.

The effectiveness of Caterpillar’s operational plan for global strategies

The firm has a corporate vision to become the global leader in customer value. This vision has ensured that the firm is a global leader industry through high-quality products that help consumer satisfaction (Caterpillar Inc., 2020). It has also developed its business value by marketing and distribution of its products across the globe.  As a result, Caterpillar Inc. has over years grown to be a huge and successful multinational, and has numerous branches across the globe. The firm’s operation plan has been an enormous success to the company, where it has been generated by a single-mindedly focuses on the quality of its products and services. The firm also has a highly productive network of dealers worldwide, who play a vital role in enabling it to attain its set goals and objectives.

References

Caterpillar Inc. (2020). Sustainability | environmental, social and corporate governance (esg). Vision, mission, strategy, & principles. Retrieved from https://www.caterpillar.com/en/company/sustainability/vision-mission-strategy.html

Macrotrends. (2020). Caterpillar Net Acquisitions/Divestitures 2006-2020 | CAT. Retrieved from https://www.macrotrends.net/stocks/charts/CAT/caterpillar/net-acquisitions-divestitures