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In: Operations Management

In 300 words answer the following questions Assess whether Caterpillar Inc. leverages the appropriate value and...

In 300 words answer the following questions

Assess whether Caterpillar Inc. leverages the appropriate value and cost drivers for their business strategy.

Analyze the strengths and weaknesses of Caterpillar Inc’s competitive advantages.

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Expert Solution

Assess whether Caterpillar Inc. leverages the appropriate value and cost drivers for their business strategy.

We can define a value driver as a capability or an activity that adds value/worth to a product/service or a company. In other words, they are activities that increase profitability, promote growth, and reduce risk, according to strategic goals. A cost driver, on the contrary, is an activity that results in changes in the activity's cost. Caterpillar Inc. leverages appropriate cost and value drivers. The company leverages an information-driven approach to guide the company’s decision-making process. This usually positions the company on sustained profitable growth. The company is always devoted to understanding the customers’ needs, hence delivering the leading products/services in the industry.

Analyse the strengths and weaknesses of Caterpillar Inc’s competitive advantages.

There are several aspects and factors that add to the corporation’s competitive advantage. These factors make the corporation noticeable irrespective of the endless competition in the industry. Caterpillar’s competitive advantage includes its strong and sound brand image and its strong world-wide distribution network, to name a few. The corporation’s strong and sound brand image has enabled the company to increase its customer base. It has also allowed the company to introduce new products/services easily and has enhanced customer loyalty. Strong world-wide distribution network has ensured that the company’s products/services reach all customers, hence increasing its profitability. However, the company is less innovative.This weakness makes the corporation vulnerable to opponents that invest in the technology aggressively. The company also has limited connections in emergent markets. This weakness prevents the company from maximizing profits and revenues.

keosha answered 1 week ago
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