caterpillar model bpsm

Click here to load reader

Post on 02-Jun-2018

214 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • 8/11/2019 Caterpillar Model Bpsm

    1/20

    PRESENTED BY:

    Neha Parekh (13301)

    Madhuri Kudekar (13309)

    Shraddha Temgire (13320)

    Vijay K Bokde (13338)

    Apoorva Daydar (13341)

    Shantanu Tupe (13349)

    Lt.Col. Mangesh Wankhede (13361)Lt.Col. Vijay Khedekar (13362)

  • 8/11/2019 Caterpillar Model Bpsm

    2/20

    World EME Industry in 1981

    About CAT CATs strategy till 1980s

    Competition

    Need for new strategy

    PESTEL Analysis Michael Porters Five Forces Model

    SWOT Analysis

    Suggestions and Key Learning

    AGENDA

  • 8/11/2019 Caterpillar Model Bpsm

    3/20

    1981, the construction industry along with EME usage

    represented nearly 70% of the total dollar sales Excavators, bulldozers, graders, loaders of highway

    tractors and haulers

    EME demand was doubling throughout 1973-1980s

    Mining/ construction industry60% of EME market

    Low cost labour method created competition

    EME industry focussed on improvements to existingproducts

    WORLD EME INDUSTRY IN 1981

  • 8/11/2019 Caterpillar Model Bpsm

    4/20

    Based in Peoria, Illinois

    Two divisions

    1) Earth moving and construction machinery and

    related equipments

    2) Engines for construction and power generating

    systems.

    Largest manufacturer of EME- Large geographical base

    and broad product line

    Great success due to world war IItriple sales

    ABOUT CAT

  • 8/11/2019 Caterpillar Model Bpsm

    5/20

    Extending its market globallyplants in over 8

    countries Providing high quality extensive product line backed by

    efficient service

    Self-sustaining Dealership Network

    100 % ownership of its subsidiaries Recognizing post-war opportunities

    Manufacturing excellence & Quality Control

    Uniform pricing strategy

    Hired employees mostly from the US

    CATS STRATEGY TILL 1980s

  • 8/11/2019 Caterpillar Model Bpsm

    6/20

    53%

    15%

    10%

    6%7%

    5% 4%

    Market Share (%)

    Caterpillar

    Komatsu

    J.I. CASE

    FIAT-ALLIS

    JOHN DEERE

    INTERNATIONAL HARVESTER

    CLARK EQUIPMENT

    COMPETITION

    TOTAL ACCOUNTED FOR MORE THAN 90% OF THE SALES.

  • 8/11/2019 Caterpillar Model Bpsm

    7/20

    Worldwide demand had doubled

    Intensity of competition increased

    LDCs increased their rate of construction activity

    Saturation in domestic market

    World contractors were becoming better placed than

    US contractors to perform contract

    Hardships due to enormous labour union strikes

    NEED FOR NEW STRATEGIES

  • 8/11/2019 Caterpillar Model Bpsm

    8/20

    Healthy environment in home country, USA

    World War 2 provided heavy growth opportunities for EME

    Industry.

    Entry in Japan was under strict constraints: Caterpillar -

    Mitsubishi alliance was delayed till Komatsu was in strategic

    alliance with Cummins over licensing.

    Governments of Countries like India, African nations stressedon partial manufacturing within national borders.

    Joint Ventures: Caterpillar established subsidiaries in host

    countries to get best deals with Governments to reduce their

    tax liabilities.

    Political

  • 8/11/2019 Caterpillar Model Bpsm

    9/20

    Joint Ventures and Risk ReductionSubsidiaries with

    100% or maximum possible ownership

    Higher wages of Employees and Workers in developed

    markets reduced the Profit margins for Organization,

    further pushing organizations to raise premium in

    Pricing. Excessive Inventory Storage had associated carrying cost

    which further pushed price higher.

    Economical Environment

  • 8/11/2019 Caterpillar Model Bpsm

    10/20

    Depleting market in Middle East. Softening of Oil Prices

    led to low construction activity.

    Global Debt Crisis of 1981. LDCs Mexico, brazil,

    Argentina, Nigeria facing liquidity crunch.

    Fed Reserve Policy leading to higher interest rates

    affected the Construction industry.

    Strengthening USD, adverse for Exports from US.

    Economical Environment

  • 8/11/2019 Caterpillar Model Bpsm

    11/20

    Developing Countries and specifically the African

    nations were more Labor oriented.

    Organizations stressed high on loyalty were consideredConventional in operations.

    Ghetto creations( Clubbing housing and workinglocalities) observed.

    Management- Labor Relations in Organizations werechallenged.

    Social Environment

  • 8/11/2019 Caterpillar Model Bpsm

    12/20

    During War, US military standardized usage of CAT

    equipments.

    Technology development and increase in Automation -

    Result: electronically controlled equipment.

    Post war, US military left heavy machinery in countries

    while their return. This led to locals learning usage andmaintenance of Cat machinery.

    However Caterpillar was mocked to have laid back

    Technology as compared to Komatsu.

    Technological Environment

  • 8/11/2019 Caterpillar Model Bpsm

    13/20

    Opportunities seen in ASEAN, Australia, Japanese

    markets.

    LDCs required extensive infrastructure however faced

    financing problems.

    Other MNCs ready to take dealership of CAT in and

    outside US. Ex: Unilever in Africa.

    Ecological Environment

  • 8/11/2019 Caterpillar Model Bpsm

    14/20

    USFCPA: US Foreign Corrupt Practices Act- Prohibited

    Caterpillar from unethical activities like Bribery.

    Different Nations varied on the Legal standards adopted

    for Business. Joint Ventures with percentage of

    Ownership was point of focus.

    Tax policies depended on ownership and Investments.

    Legal Environment

  • 8/11/2019 Caterpillar Model Bpsm

    15/20

    MICHAEL PORTERS FIVE FORCES

    MODEL

    Rivalry

    High

    Threat ofnew

    entrants

    Low

    Bargainingpower of

    buyers

    Moderate

    Threat ofsubstituteproducts

    Low

    Bargainingpower ofsuppliers

    Moderate

  • 8/11/2019 Caterpillar Model Bpsm

    16/20

    SWOT ANALYSIS

    STRENGTHS

    Dealership network

    Broad product line

    Large Geographic

    BaseOperational efficiency

    High quality products

    WEAKNESS

    Fewer markets

    Few global managers

    High Overheads andsetup cost

    Labour Relations

    OPPORTUNITIES

    Emergingmarkets

    Diversification

    THREATS

    CompetitionUncertain Economic

    environment

    Currencyfluctuation

  • 8/11/2019 Caterpillar Model Bpsm

    17/20

  • 8/11/2019 Caterpillar Model Bpsm

    18/20

    Hire local employees with local knowledge to work in a

    particular country.

    Concentrate on growing marketsfar east, Australia,

    ASEAN countries, South Korea, Japan and Taiwan

    Full capacity utilization of existing plants to reduce

    overheads

    SUGGESTIONS

  • 8/11/2019 Caterpillar Model Bpsm

    19/20

  • 8/11/2019 Caterpillar Model Bpsm

    20/20

    THANK YOU!