Value Chain & Resources

Caterpillar, Inc. has an extensive value chain that delivers quality products in every industry they compete in.  They offer the consumer over 24 brands to choose from and have a presence in every industry where heavy machinery is used.  The reputation of Caterpillar has allowed it to be a marketer of itself.  When people think about heavy machinery and diesel engines the first thing that comes to mind is CAT.  They have built a company that markets itself and will only get better as the years go on.  Their inbound logistics, operations, and outbound logistics have allowed them to get the end product to the consumer in an efficient way.  This has made Caterpillar the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.  The use of secondary activities like research and development have made Caterpillar the company that they are.  Their R&D team is powered by more than 8,000 engineers and is driven by four steps that go into creating a product at CAT.  These four steps are strategy definition, product development, manufacturing execution, and product support.  These steps really sum up the inbound logistics, operations, and the outbound logistics of Caterpillar.  They start with an idea and they turn that idea into a plan.  They then end with a product being given to the consumer and services being offered on the product as a guarantee of quality.  These four steps really sum up the primary activities of Caterpillar's value chain.  When you look at the secondary or support activities that are involved in Caterpillar's value chain you have to start with the HR management and the general administration of the company.  They have great leadership that is backed by great employees who really care about the company that they are working for.  This leadership has allowed them to create relationships with their suppliers that is second to none.  They have a relationship with their suppliers that has allowed them to have a global presence and enter into economies that were never enough heard of 30 years ago.  With the mix of leadership, relationships among their numerous suppliers, and technology that is advancing daily, Caterpillar, Inc. is on a track to keep growing and reaching new heights as a company.


Caterpillar, Inc. has many resources that makes it the company it is today.  A tangible resource at Caterpillar is their ability to make a profit.  They had sales and revenue of $60.138 billion in 2011.  Their value chain and all of their resources have added to this tangible resource.  Another tangible resource is the construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives that they produce.  Everything that Caterpillar manufactures is a tangible resource that plays a big part in their success.  The last tangible resource that I am going to talk about is the global presence that Caterpillar has.  They have distribution centers and manufacturing plants that span the globe.  It allows them to offer their products to every part of the world.  

Caterpillar, Inc. has some intangible resources that add to the overall value of the company.  The first one is their reputation.  They have created a brand name that is second to none.  Their name says it all.  CAT is a world recognized name and will continue to be because of Caterpillar's reputation.  A second intangible resource is the technical innovations that Caterpillar makes to their products.  These keep them ahead of their competitors and allows them to expand and better their products.  They are a company that keeps growing because of the innovations they make to their machinery.  The last intangible resource that I am going to talk about is their employees.  They are trained at Caterpillar University. It offers the best training for customers and employees about the machinery and products that CAT offers.  It allows the employees to be experts about every product that Caterpillar produces.  


The organizational capabilities at Caterpillar are the best in the industry.  They offer outstanding customer service that allows customers the opportunity to interact with trained employees that know the equipment inside and out.  Caterpillar has also had the ability to hire, train, and retain many employees throughout the years that have been able to innovate, sell, and make the products offered at Caterpillar the best in the industry.  Caterpillar has also been on the cutting edge of product development.  They are always going bigger and better.  They have the ability to take the wants and needs of their customers and apply them into an existing machine to make it better or to create a brand new machine that meets the needs of their consumer base.  The organizational capabilities at Caterpillar are limitless and add to the overall value of the company.

Caterpillar, Inc.

Caterpillar, Inc. is a corporation that designs, manufactures, markets and sells machinery and engines.  They also sell financial products and insurance to their customers.  They are the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.  Caterpillar is ranked number one in their industry and has over $70 billion in assets.  The origins of Caterpillar, Inc. trace back to the merger of Holt Manufacturing Company and C.L. Best Tractor Company in 1925.  The merger created the Caterpillar Tractor Company that was renamed Caterpillar, Inc. in 1986.  Caterpillar, Inc. is a global company that is headquartered in Peoria, Illinois.

Chapter 2 in the reading discusses how a firm plans and forecasts by analyzing the external environment.  There are three aspects to creating a forecast.  I feel that these three aspects are vital for the success of the forecast for the firm.  They are environmental scanning, environmental monitoring, and competitive intelligence.  Environmental scanning looks at the companies competitors and environmental monitoring looks at the industry in which the firm competes.  Competitive intelligence puts all of the findings together and is how the firm interprets them.  The next aspect of this chapter that is important are Porter's Five Forces Model.  The five forces are the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products, and the threat of competition.  These five forces need to be taken into consideration when a firm considers their competitive environment.  It provides a means for the company to better understand what they are up against in the industry.  It also is a good starting point for forecasting and planning the road ahead.  These two ideas were the most important things out of chapter 2.  They are vital for the success of a firms planning and forecasting.