Strategic Journal

Read the Strategic Management Project Background document.
Review the resources listed at the end of this assignment along with the terms and concepts discussed this week to prepare for this assignment:

strategic management
competitive advantage
strategic plan
mission statement
vision statement
core values statement
AFI

Create a Word document and title it Strategic Management Research Journal Part 1. (Be sure to download and follow the template that I provided for you in your welcome message. Use a Title page and a References page with at least three references. No running head is required, but do use headings to separate portions of your paper, and remember to cite your sources in the main body of your paper). Please no abbreviated bullet or numbered lists, express yourself in full paragraphs that are 3-5 sentences in length.

Write a 500- to 700-word response to the following prompts as your journal entry:

Justify the guiding principles required for preparing effective statements that describe the mission, vision, and the core values of an organization as covered in the assigned reading.
Compare whether Caterpillar Inc.’s mission, vision, and core values conform to the guiding principles in the text and support organizational strategic planning principles as justified in prompt #1. Refer to the Caterpillar Inc. website listed in the Resources section below.
Assess what Caterpillar Inc.’s current competitive advantages and disadvantages are by considering their business partners, allies, and general operations. Research the assignment resources listed below. Based on your research, evaluate Caterpillar’s current competitive advantages and disadvantages.
Note: You will use information from this entry in your Strategic Management Research Project Presentation due in Week 5.

Resources

Strategic Management Project Background
Caterpillar Inc. website
Research Caterpillar’s Annual Report
Research CATERPILLAR public information, such as news releases, financial reports, and marketing analyses.
Center for Writing Excellence
Reference and Citation Generator
Grammar and Writing Guides

ANSWER

Strategic Management Research Journal Part 1

Guiding Principles

Concise

The guiding principles necessary in making effective mission, vision, and core values of an organization should be concise to directly communicate what is intended. The information should be relayed in few words that do not take much time to comprehend.

Outcome-oriented

The context of a mission, vision, or core values statements should outcome-oriented. This enables the organization to concentrate on getting better results as the end and setting up an effective mission, vision, or core values as the means to it (Cady et al., 2011).

Inclusive

Effective mission, vision, and core values statements should be Inclusive because organizations tend to serve diverse groups of people who subscribe to different ideologies and creeds. This enables the organization to concentrate on bringing people together towards achieving its goal.

Easy to Understand

Statements should be easy to understand to increase their effectiveness and comprehension. This enables the goals of an organization to be understood by stakeholders without the pain of much explanation. To support ease of understanding, statements should be easy to communicate across various groups. Ease of communication increases the rate of comprehension among employee, customers and other stakeholders hence increasing the effectiveness of the organization

Inspiring

Effective statements are inspiring to those it seeks to communicate to. This is necessary because people tend to act upon conviction and inspiration on what they would like to achieve.

Guiding Principles and Caterpillar Inc.

Caterpillar’s mission, vision, and core values conform to the guiding principles of preparing effective statements. The mission statement, vision statement, and core values are concise and to the point. They contain one sentence each and directly communicate the organization’s priorities. The statements are also inspiring and geared towards providing results to the company. The protection of communities and the planet are inspiring goals that many people would like to rally around. For instance, the organization’s mission is to enable economic growth via the development of infrastructure and provide solutions that can offer supports to communities in the world. The statement is direct to the point can be understood by anyone who has a basic understanding of English. The organization’s core values are one-word statements that are direct to the point, easy to understand, and greatly inspiring (Sawayda et al., 2012). The call to integrity, excellence, teamwork, commitment, and sustainability are societal virtues that resonate across diverse backgrounds. These values encourage performance and success if exploited to the fullest.

Competitive Advantages and Disadvantages

Caterpillar Boasts of a stronger dealer distribution network of approximately 175 dealers in 2100 dealer branches. These dealer networks have over 160,000 employees that provide technical knowledge in over 180 countries (Vinceri et al., 2010). Dealers like Yancey Brothers have been partners with the company for years. The huge dealer network allows Caterpillar customers to enjoy low operating and owning costs. Caterpillar has a massive volume of high-quality and safe products that are the preferences of many customers. The company has made a significant investment in research and development through various research and innovation partners.

Low diversification due to high dependency on heavy equipment makes the company disadvantaged light machinery manufacturing. For instance, Caterpillar has not ventured into the car manufacturing industry, yet some of its competitors, like Scania, make significant investments in such industries. Caterpillar has taken loans to fund some of its expansion and investment programs hence increasing its debt obligations. Caterpillar sought a $3 billion loan in 2020 to boost liquidity because of uncertain economic times brought about by the COVID-19 pandemic. There has been a trend of decreasing volume of sales, revenue, and profits. Caterpillar has a high attrition rate in its workforce compared to competitors. The company has to spend more on training and development of its employees due to the company’s high skills demands.

References

Cady, S. H., Wheeler, J. V., DeWolf, J., & Brodke, M. (2011). Mission, vision, and values: What            do they say?. Organization Development Journal, 29(1).

Sawayda, J., Fairy, E., & Yepez, M. (2012). Caterpillar, Inc. In Ethics in Marketing (pp. 161-       169). Routledge.

Vinceri, K. A., Zodda, M., Jackson, W., Tamarkin, J., Woerner, K., & Zimmer, D. (2010).           Caterpillar Financial Services: An Exploration of Strategic Capabilities. Available at SSRN 1585334.