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Caterpillar Case Study

            , which is headquartered in Peoria, Illinois, has dominated the world in earth moving, construction, and materials machinery for more than 75 years. Their global dominance created a dormant and risky environment. Komatsu, who is a leading Japanese competitor, gained market share by offering low cost, high quality options in a variety of product lines while Caterpillar was busy raising prices in their existing product lines at an average of 10% per year. Caterpillar executives disregarded the threat and continued to maintain it's historical management values; some of which included statements such as: "we maintain a strong corporate culture via 'internal staffing'", and "we maintain sufficient international manufacturing presence to avoid being shut out." Caterpillar, Inc. who has been building the world's road and rail network for more than 75 years, as well as in partnership with Caterpillar dealers, is driving positive and sustainable change on every continent. A Fortune 100 company, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines as well as industrial gas turbines. The company is a technology leader in construction, transportation, mining, forestry, energy, logistics, electronics, financing and electric power generation. .
             Poor economic conditions and overly aggressive expansion and modernization plans hit Caterpillar hard in the 80's. Profits were down and Caterpillar lost $1 billion in a period of three years. This necessitated the closing of several plants, and a complete revitalization of the expansion plan. After a three consecutive years (1982-1984) of tremendous loss, Caterpillar managed to come back as a high-tech globally competitive, growth company. To jumpstart Caterpillar's sluggish reactions to these factors, George Schaefer took the reigns as the new CEO in 1985.
             Throughout the term of two successful CEO's, George Schaefer and Donald Fites, which lasted over a period of 15 years, the company reinvented itself.

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