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.