BUSINESS MODEL AND STRATEGIC PLAN: CATERPILLAR INC. of the Executive Summary This report is based on evaluating a strategic plan for Caterpillar Inc. The research reflected on establishing a new division that will connect the customers with the operational process of the firm with the help of technological resources to hasten the process of service delivery and business. The mission and vision of the new division is to create a customer integrated technological process for improving manufacturing and service systems. The new division is also expected to develop a sustainable relationship between the employees, customers and the organization by creating a platform for connection and collaboration.
The value proposition of the entire division is based on integrity, creativity and transparency for expanding the scope of service of Caterpillar Inc. The team structure for the project will mainly include the operational, marketing, financial and a technical team supported by sub-divisions. The primary assumptions for this strategic plan are that the initial advertisement will be made by the company and the implementation will be based on managerial decision. However, failure to develop a supportive logistics network will hamper the outcome of the strategic planning process.
Implementing the new division will also result in some changes within the work culture of Caterpillar Inc. Apart from training the employees, the company will also have to change their sales and service delivery policies. The financial projection of the entire strategic planning requires an investment of $30 million and the expected annual return is $2 billion. Introduction: This report is based on the strategic planning process of Caterpillar Inc and the process of managing their new division that will help them in reducing customer response time by optimal utilization of the available technological resources of the firm.
Rosenbloom (2013) opined that strategic planning process succeeds when it is being supported with an appropriate monitoring and evaluation process. This study will focus on the evaluation of the planning process of the concerned firm, the ethical issues related to the implementation of the strategy and the business and the mission and vision of the new division of Caterpillar Inc. Monitoring and Controlling the Strategic Plan: The stages of monitoring and controlling the strategic planning process for reducing customer delivery time with technological resources by Caterpillar Inc has been detailed below: Identifying the strategic goals: The operational goal of the new division of Caterpillar Inc.
is to reduce the time taken by the order delivery process. The tactical goal is directed towards gaining efficacy of integrating the order-to-delivery technology with the Caterpillar Product System (CPS). The strategic aim of the new division is to enhance the customer satisfaction level with accelerated order processing and reduce the cost of the inventory management department of Caterpillar Inc.
Planning Team: The next step in the control and monitoring process will be to assign the personnel to be associated with the strategic planning and implementation process. In case of Caterpillar Inc. the project team will include the top level managers of the operational and marketing process for streamlining the customer service and queries with the manufacturing unit of the company. The finance head of the company will monitor the budget requirements for the new division (Kaplan, 2009).
Each of the top authorities associated with the project will have sub-teams under them for conducting the operational duties related to the implementation of the new plan. The team structure for the new division of Caterpillar Inc has been explained below: Figure 1: People involved in New Division planning and implementation process (Source: Created by Author) Developing the monitoring Metrics: Caterpillar Inc has to develop some key metrics for assessing the project progress and development. For instance, segmenting the budget in accordance with the project steps will help in assessing the financial significance of the project development process (Hirst & McAnally, 2006).
The project leaders can identify the segments that are working with a lag and modify the planning process. Reviewing the plan progress: In order to ensure that the strategic planning process is in alignment with the project work process, Caterpillar Inc should review the work process on a regular basis and identify the performance of each of the operational segments. The review process will measure the performance of the team against the set objectives on the metrics of time, budget and quality.
Implementation and modification of the Strategic Plan: The next phase is to implement the strategic plan and observe its acceptance by the target audience. The problems being faced by the employees in adjusting with the changes and the cost of the overall project will be monitored to assess the effectiveness of the strategic planning process (Chou, 2013). This will be final review that will help Caterpillar Inc. in judging the contribution of the project towards fulfilling the strategic aims of the company. Ethical, Legal, Regulatory and CSR Issues: The process of developing a direct channel of communication among the manufacturing unit and the customers of the firm will improve the process of product manufacturing and the service culture of Caterpillar Inc.
However, certain ethical issues may appear in the process. One of the primary ethical concerns will be the process of mutual information sharing. The customer information will be shared between multiple departments which increases the risks of data leakage (Brusoni & Prencipe, 2009). Data Security laws will be an influential factor in this regard (Lee, 2007). Caterpillar must ensure the security and confidentiality of customer information in order to meet the legal and ethical requirements.
The implementation of the strategic plan for the new division will also initiate some changes in the work process. In this regard, the employee rights demands complete communication between the employer and the employees (Brusoni & Prencipe, 2009). Considering the CSR activities Caterpillar will have to focus on the pollution that will be created because of the new logistic support systems. Focusing on the individual customer demands will create the demand for faster transportation which will contribute to the carbon footprint of the company (Kaplan, 2009).
Thus, reducing the pollution from logistics support system will be the primary focus of Caterpillar in order to fulfill their environmental responsibilities. Conclusion: The strategic planning process of the new division of Caterpillar Inc is aimed for helping the organization gain competitive advantage by including a better service aspect. Connecting the manufacturing department with the customers directly can accelerate the service delivery process and also reduce the cost of operations with appropriate operations management process. However, Caterpillar Inc must consider the risks and the changes that will take place within the internal environment as a result of the project implementation.
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