Caterpillar machinery is recognizable by its trademark "Caterpillar Yellow" livery and the "CAT" logo.
PESTEL Analysis:
For evaluating and analyzing the macro environment of the organization, the PESTEL Analysis tool is used. There are various macro environmental factors that affect the workings of an organization like Political factors, Economical factors, Social factors, Technological factors, Environmental factors and Legal factors. Let us now discuss in detail that how these factors affect the working of Caterpillar Inc.
Political Factors – Political factors are one of the main factors that affect the operations of the organization. Every country has its own governments with different laws and legislation, rules and regulations, import and export policies etc. As Caterpillar is operating and serving the customers worldwide, it should be aware of the political factors.
Economical Factors – The economic factors includes the recession, inflation, growth in GDP, growth in population etc. In 1980s, the recession hits Caterpillar badly as it was very close to bankruptcy but somehow it manages to overcome that economic downtown. The rise in the prices of raw material, diesel, petrol, import and export costs etc. is big problems for the organizations. A rise in raw material prices increases the manufacturing costs in Caterpillar and to maintain a balance, the organization has to increase its prices.
Social Factors – Caterpillar is operating in many diversified countries. Hence it becomes essential to consider the social factors while framing the business strategies. Each and every country has different societies with different values, culture, religions, attitudes etc. the company has to maintain a balance to avoid any kind of discrimination into the organization.
Technological Factors – A manufacturing organization like Caterpillar needs ongoing technological advancements. It should be updated with all the latest technologies to compete in a better way and maintain its position into the market. Caterpillar is always using the best technologies for manufacturing its construction equipment. Moreover it has invented many new products with the best quality and price range among the whole market.
Environmental factors – The Caterpillar has moved towards the sustainable development i.e. they are focusing on new technologies and innovations to increase the efficiency and productivity of the organization by not impacting the environment and also providing guidelines to the customers for doing the same. Their mission is “to enable economic growth through infrastructure and energy development, and to provide solutions that protect people and preserve the planet”.
Legal Factors – The various laws and legislation of the country in which the company is operating cannot be ignored. The laws related to import and export,Employment, laws, labor laws, should be taken care of. A lawful and legal organization can effectively survives in long run.
Caterpillar is evolving in a mature environment, and you can observe a concentration of a few large firms within a saturated market. Therefore they have to ensure that they still have a competitive difference in comparison to their closer competitor, the Japanese company Komatsu. However, in the emerging countries there is a growing need for Caterpillar products and therefore there maybe a threat of new competitors such as Belarus machines in the CIS (Commonwealth of Independent States = former Soviet Republics) countries and becoming the most desirable Earth-moving equipment and machinery in the whole world.
References:
http://www.cat.com/global-selector.html
http://www.ukessays.com/essays/business/strategic-development-study-of-caterpillar-inc-business-essay.php
http://www.angelfire.com/ab9/jamie/Caterpillar%20Case%20Study.htm
http://www.managementparadise.com/forums/principles-management-p-o-m/208912-pest-analysis-caterpillar.html
http://en.wikipedia.org/wiki/Caterpillar_Inc.