Ch. 4 - The Marketing Environment

How CAT INC. operated in the past is different than how they operate now because the external environment was different. Back in 1925 when CAT INC. was first founded, their initiative was to make it big as a tractor type company but as time passed their initiative changed accordingly to fit the time period's demands. Because CAT INC.'s target market is fixed on big businesses and corporations wishing to build new firms, buildings, and so on; their view is more broad than say a toy company who's target market is children. How CAT INC. operates depends on how well the economy is, the generation they are in, whether  or not there are resources available, and whether or not their practices are in accordance to the law(s).

A example of how CAT INC. changed their practices to fit the marketing environment would be when they shut down some of their factories. Like I've discussed in a previous blog post, CAT INC. saw where the economy was going and decided that temporarily shutting down some factories would be beneficial to them in the long run. If the economy had not took a fatal blow during that time period CAT INC. would have done the opposite and would have built more factories or keep all their factories up and running.

A good example of whether or not CAT INC.'s practices were in accordance of the law would be Caterpillar, Inc. v. Lewis (1996).  James David Lewis who was injured while operating a CAT INC. bulldozer filed a lawsuit against CAT INC. claiming product liability which included failure to warn and breach of warranty.

Ch. 3 - Ethics & Social Responsibility

According to CAT INC. they follow a very strict code of ethics, which have characteristics of social responsibility, that involves Integrity, Excellence, Teamwork and Commitment, which in my opinion is something to be expected in every business however seems to work exceptionally well for them.

(Note: I only chose a select few characteristics of Integrity, Excellence, Teamwork and Commitment defined by CAT INC. to discuss about)

Integrity

The ability to avoid and manage conflicts and potential conflicts of interest.

• I believe for a company like Caterpillar to practice this type of ethic they must be very cautious and strict on the decisions they make, which is a good thing because it shows just how much they care about themselves as a company and the world. In order to be very cautious and strict on their decisions they would need a lot of time to think thoroughly about it which would be considered very bothersome and annoying but CAT INC. takes time out of their agenda to do it for the greater good.    

Compete fairly.

• Even though CAT INC. stands at the top of their industry they still practice fair competition which shows that they're a good sport with their competitors, which is rare to find in companies/businesses. They aren't out to destroy other companies/businesses in their field but rather use their competition to help provide motivation for future business activities.

------------------------------------------------------------------------------------------------------------

Excellence 

Accept nothing but the best quality in products and services and focus on delivering the highest value to customers, always with a sense of urgency.

• Whenever someone buys a Caterpillar machine the company provides them with a variety of services to accompany it in order to provide a excellent experience; basically a form of customer service.

------------------------------------------------------------------------------------------------------------

Teamwork

Treat others with respect and refuse to tolerate intimidation or harassment and treat people fairly and prohibit discrimination.

• Because CAT INC. heavily depends on communication and interactions among their employees/workers they practice this type of ethic. It seems to be a given fact that within any business/company this type of ethic should be practiced however because CAT INC. builds the foundation of respect and non-toleration of intimidation or harassment amongst everyone of its employees/workers, the company prospers.

Build outstanding relationships with dealers and distribution channel members.

• Although some companies/businesses may care only about selling their products, CAT INC. builds relationships with its dealers and distribution channel members, which in my opinion is a genius idea. Since CAT INC. builds its relationship with almost everyone, they automatically become a power to be reckoned with because they are backed up by other entities (having connections), so if they were to ever be in a pinch their "friends" would help them. 

------------------------------------------------------------------------------------------------------------

Commitment 

Support environmental responsibility through sustainable development.

• Like I discussed in a previous blog post, CAT INC. took a break from their usual practices (tactical retreat in a way) because of how the economy was doing. They figured that the demand of their products would not be needed for a while until the economy kicked back up so they decided to invest in research for the mean time. For CAT INC. to do research out of all the options out there while the demand of their machines were down, is a smart move in my opinion. Research would help them accomplish what they stated in their mission statement by improving their machines and making sure that they provide more bang for your buck which would reduce their impact on their environment and the world.

Take personal responsibility

• Similar to what I discussed in Excellence.

Make responsible ownership and investment decisions and to participate in public matters in a appropriate manner.

• CAT INC.'s mission statement has a lot to do with these two ethics because they both involve sustainability. CAT INC. practices green marketing which helps them stand out among their competition and at the same time helps the environment, and because they practice green marketing along with other activities they gain good publicity which in turn helps them continue their business while helping the environment.

Ch. 2 - Strategic Planning for Competitive Advantage -WI Students Begin Marketing Plan

Before you come up with a strategy to help you gain the upper hand in the market or any situation for a matter of fact, you must first know your enemy. Your enemy is not limited to a person, it can be a school exam, a riddle or even trivial matters, what matters if that you know your enemy and plan accordingly to ensure you emerge victorious. The reason as to why CAT INC. is at the top of their industry is because they constantly observe their competitors, market and the world so that they know what to work on later in the near future to help themselves as a company achieve the upper hand. CAT INC. plans things beforehand and that helps them prepare for problems faced ahead which would normally injure them significantly had they decided to wing it.

Given the size of CAT INC. there are a large amount of high ranking people each divided into their respected departments. When CAT INC. goes over their company goals for the year or in general, they hold a meeting. Every officer sits down with their management teams, and then as a group, and talks with everyone and assesses their long-term potential/goal. The CEO or even the founder of CAT INC. can not decide what the company should or will do because they lack perspective. In order to make the right decisions one must consult with others and gain their perspectives on the problem at hand.

I'll give a recent example of CAT INC. strategically planning for their competitive advantage. In 2010 CAT INC. noticed that they had a lack of sales in the Brazilian quarry market. Apparently the customers' perception of CAT trucks sold in Brazil costed too much and weren't worth the money so CAT INC. responded with a plan to prove that the trucks were worth the money. CAT INC. had to study their competitor in the Brazilian quarry market which were Brazilian companies whose trucks costed half of the CAT trucks, and then they planned accordingly to help them prove that their trucks would have a higher output/payload per truck compared to the trucks that costed half of theirs. The team in Brazil simulated activities in the quarry and gathered data to produce a report that showed that the CAT truck offered more output/payload capacity, traveled at greater speeds and offered operators of the trucks greater comfort, visibility and safety than the other truck. They also offered financing through their Financial sector (CAT Financial) and promised follow up visits every 500 hours or whenever needed to make sure that their CAT trucks were operating  properly. The financing and followed up visits may seem like customer service and nothing more but it is part of CAT INC. strategy. It is part of their strategy because it helps them build reputation in Brazil where they demonstrated the capabilities of their trucks and ultimately sold their trucks. CAT INC.'s strategy was great because they thought about and planned how they could convince the Brazilian quarry market that their trucks were a must have. If they had tried to sell their trucks that costed twice the amount of the Brazilian company trucks without any evidence to back up their claims then they would most likely not have been able to sell any trucks at all to the quarry market.

CAT 770/772 truck being sold in the Brazilian quarry market

The size of the CAT truck affects the cost-per-ton value

Another good example of CAT INC. strategically planning for a competitive advantage would the recent closing of a couple CAT factories do to the economy's recent fall a couple years back. The reason as to why this is a "good" strategy played out by CAT INC. is because they knew they had to cut back on production. If the economy is bad then the amount of CAT machinery being bought will be affected as well. Creating products and having them ready to be shipped out to the next customer is great and all but even when it sits in the storage waiting to be sold it will cost you money to have it stored there. Because CAT INC. saw the direction in which the economy was going at the time they closed down some of their factories to help cut down on production and other expenses which is important to help them keep their other sectors up and operational in their dire time (remember that CAT INC. has three sectors and isn't just confined to construction and mining machinery), as well as change some of their prices to help keep a steady flow of income. Using aggressive sales techniques might help the company grow but you must always keep in mind whether or not it would benefit the company as a whole or not, in which this case CAT INC. went smart and decided that for the time being they would halt certain areas of the company and come back to them at a later time when the economy is able to support it. Sometimes it is better to take it easy rather than seriously because if you're focused too much on making money even in tough times then your reputation will be affected negatively.

Caterpillar factory