Strategic Management Research Journal Part 1

Justify the guiding principles required for preparing effective statements that describe the
mission, vision, and the core values of an organization as covered in the assigned reading
The mission, vision, and core values underline the organization’s direction and aspirations for its
business. (Rothaermel 2021) notes that strategic management begins when organizational vision,
mission, and values have been set since they provide direction of the organizational aspirations,
the process to achieve those aspirations, and safeguards that ensure that the organization is
ethically and legally aligned. (Rothaermel 2021) notes that the vision is the long-term objective.
Strategic success is realized when organizations implement their vision. A mission describes the
organization’s actual activities that help achieve the vision. The values statement provides the
organization with a basis for formulating a desirable company culture, behaviors, and morals that
the company abides by in its dealings with customers, suppliers, the government, and employees.
Compare whether Caterpillar Inc.’s mission, vision, and core values conform to the guiding
principles in the text and support organizational strategic planning principles as justified
in prompt #1
Caterpillar’s mission statement is conceptualized in four areas: to provide customer value, grow a
profitable business, develop and reward people, and encourage social responsibility. The mission
statement is an accurate representation of the organization’s activities and what it has so far
achieved in profitability and sustainability. Caterpillar has identified in its mission the things it
would like to grow through customer value, profits, human assets development, and social
responsibility (Caterpillar 2022) . Caterpillar’s vision is to be the global leader in customer value
(Caterpillar 2022). Through its strategic partnerships with dealers, Caterpillar is on the path to
achieving its vision. Caterpillar’s core values are based on integrity, excellence, teamwork,

commitment, and sustainability. Caterpillar’s success in excellence, financial performance,
product diversification, and sustainability is evident in its activities.
Assess what Caterpillar Inc.’s current competitive advantages and disadvantages are by
considering their business partners, allies, and general operations. Research the assignment
resources listed below. Based on your research, evaluate Caterpillar’s current competitive
advantages and disadvantage
Caterpillar’s most significant advantage is its global network. Besides being primarily based in
the USA, Caterpillar has individually or through acquisitions and subsidiaries been able to spread
its network to all regions of the world.
Caterpillar also has a diverse offering in different industries. Caterpillar is mainly recognized in
the construction industry due to its primary product offering in machinery and parts. However,
Caterpillar also has offerings in oil and gas exploration, mining, railway maintenance, financial
operations, and power generation (Caterpillar 2022). This enables Caterpillar to compete on
more than one front and provides a wide range of revenue drivers that have been essential to
Caterpillar’s success. Caterpillar was in operations in 1925, during which time it has gained a
wealth of experience.
Additionally, it has successfully accumulated financial wealth and high-value assets, which have
been instrumental in fulfilling essential investment, strategic and operational activities.
Caterpillar has been able to finance its working capital needs and especially those related to
employee satisfaction and retention. Its financial ability has enabled Caterpillar to fulfill
distribution needs to its global centers, excelling in customer service. Financial muscle has
enabled it to acquire fundamental business interests to be more competitive.

Caterpillar’s key competitive disadvantage is that it faces stiff competition from other well-
established entities. Some entities include Sany, Komatsu, Volvo, Hyundai, Deere, and XCMG
(Caterpillar 2022). These firms have similar product offerings as Caterpillar in the machinery
sector.
Caterpillar’s position as a global leader has come under scrutiny due to its inability to provide a
unique advantage over its competitors but has greatly benefited from its reputable brand.
Technological advancements have worked to the detriment of Caterpillar by placing it in a
hypercompetitive environment where competitive advantage cannot be sustained for long.
Caterpillar’s competitors have access to the same technologies and markets that Caterpillar
operates in, and this provides a significant competitive risk.

References

Caterpillar. (2022). mission-statement.com/caterpillar/. Caterpillar.Com. Retrieved 2022, from
https://mission-statement.com/caterpillar/
Caterpillar (2021). Caterpillar Inc. Annual Report 2020. (2021). Caterpillar.Com.
https://reports.caterpillar.com/ar/2020_Caterpillar_Annual_Report.pdf
Rothaermel, F. (2021). ISE Strategic Management: Concepts (5th ed.). McGraw-Hill
Interamericana de España S.L.