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Mature Product Markets Drove Caterpillars Restructuring during the 1990s - Term Paper Example

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The author examines Caterpillar’s restructuring during the 1990s. The company is manufacturing construction and agricultural products, including tractors, engineering vehicles, loaders but was facing numerous problems right from the 1960s and not only because of products but also by the labor. …
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Mature Product Markets Drove Caterpillars Restructuring during the 1990s
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Download file to see previous pages The company is having the revenue of US $ 36.339 Billion in the year 2005 and is currently employing 77000 employees approximately.
The company was founded in 1925 as a result of a merger with Holt Manufacturing Co. and it started struggling and established itself because of the lack of competition, they were the pioneers in manufacturing the construction equipments of that time which were also used in the world war I and II effectively, the company sooner captured the market by providing products that were useful for construction which was taking place at its maximum as that era is highly admired for the construction in the US, the company kept on moving and did manage to have contracts with leading construction companies, the company was running fine in the 50s and 60s and 70s due to wars started by the US and also the world wars, but after some period when the stagnant construction took place, it was assured that the products were having a fall from growth towards the maturity, this
Medvedev said in 1987, "Before the war the most widely used tractor was a wheeled 15-horsepower model with iron wheels without tires"(290). The company identified a number of problems in their products, and also this brought them to loss, also there were problems faced in the exports of the tools manufactured by the company.
"Construction equipment industry net exports were $7.2 billion at their peak in 1980 and Caterpillar was the world's dominant manufacturer, exporting almost half of its 1981 U.S. production. This U.S. dominance was sharply eroded by the strength of the dollar in 1982-1984 as net exports dropped steadily to $2.2 billion in 1986. Japanese construction equipment manufacturers invaded the U.S. market in this period, pricing 50% below Caterpillar, Komatsu, in particular, gained 18% of the U.S. market and was able to establish a significant dealer network" (Wigmore, 143/44: 1997).  ...Download file to see next pagesRead More
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