Caterpillar Case Study.

For my individual assignment I choose to review and the fount study about the true cat Company. Nothing is more well-known(prenominal) on a construction site than the bright color heavy equipment manufactured by true cat, Inc. Caterpillar Inc., headquartered in Peoria, Illinois, has prevail the world in earth moving, construction, and materials machinery for more than 50 years. Their global dominance; however, created a stagnant and risk averse environment. Komatsu, a leading Japanese competitor, had gained market share by oblation low cost, high quality options in a variety show of product lines while Caterpillar was busy raising prices in their existing product lines at an average of 10% per year. Caterpillar executives ignored the threat and continued to support its historical precaution values. Poor economic conditions and all oerly aggressive expansion and modernisation plans hit Caterpillar hard in the 80s. Profits were calib judge and Caterpillar lost $1 billion in a period of three years. This necessitated the closing of several plants, and a perform revitalization of the expansion plan. To jumpstart Caterpillars sluggish reactions to these factors, George Schafer took the reigns as the impertinent CEO in 1985.

To what extent is the competitive position of Caterpillar against Komatsu dependent on the clam/yen commutation rate? Between mid-1996 and early 1998, the sawbuck appreciated by over 40 percent against the yen.



How do you think this affected the comparatively competitive position of Caterpillar and Komatsu?

Caterpillars competitive position over Komatsu was very dependent on the dollar/yen exchange rate, although they didnt think so. Within a seven-year span between 1980 and 1987 the dollar rose and average of 87% against ten other counties funds. The dollar was doing so well in the US that foreign investors treasured to get in our market and invest to convert their currency into ours and make money.

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