Vision and Mission Statement of Caterpillar: An Analysis
An Analysis of Vision and Mission Statement of Caterpillar
- Caterpillar Mission and Vision Analysis
Caterpillar is a major producer of industrial vehicles and equipment with a large brand portfolio. Over the last few years, weak economic scenario in several of its markets has hurt its profits. As a result its focus is on new things like creating new revenue streams. Apart from its heavy vehicles business, the brand has also invested in many other businesses including financial services, energy, environment and solar turbines. Despite the poor performance over the last few years, the brand is not pessimistic about its 2017 performance. Its performance in China has started recovering and could improve further if recovery in the Brazilian economy begins. Caterpillar’s diverse portfolio could enable faster recovery for the brand. Caterpillar has shown the power of excellent strategy and has grown an umbrella brand whose power lies in its diverse portfolio. Apart from these things, the brand has focused on sustainability and environmental protection. Here is an analysis of Caterpillar’s mission, vision and strategy.
Vision Statement of Caterpillar: Analysis and Recommendations
“Our vision is a world in which all people’s basic needs – such as shelter, clean water, sanitation, food and reliable power – are fulfilled in an environmentally sustainable way and a company that improves the quality of the environment and the communities where we live and work”.
At a first glance the entire focus of the vision statement of Caterpillar seems to be on sustainability and corporate responsibility. Some companies do this to create sustainable brand image. This is an important focus area in the strategy of Caterpillar. The reason is that sustainability has become a key ingredient of the formula for global success. However, a vision is about the future and guides a company’s focus on several matters including business operations, finance and stakeholder profits. Caterpillar’s vision statement is not specific regarding its future. It does not shed enough light on how Caterpillar has planned its future growth. It does show its social orientation and that through its business operations and its financial might, the brand is trying to generate some unique social value. The vision statement also gives a faint impression only of what it is planning to do in future for its internal stakeholders. The vision statement of Caterpillar does not offer clear directions on the future of the brand or how it plans to reach there.
Caterpillar’s vision is that of a smarter, peaceful and economically developed world. It is about how it is going to generate strong social value. Financial value is also an important aspect of business operations and caterpillar’s vision statement must include this factor. So, the statement requires to be more specific and focused at the financial and operational aspects of the brand’s business. Several brands have more detailed and focused vision statements that focus on not just their business operations and growth strategy but also on how these businesses plan to create unique value in future. However, environment is a major concern for the vehicle manufacturing brand and Caterpillar has shown some strong focus on this specific area in its vision statement. Its employee concerns, business position, customers, market size, competition etc things are missing from the vision statement. It is why the vision statement of Caterpillar does not appear complete and only expresses its vision of the future partially.
Mission Statement of Caterpillar: Analysis and Recommendations
Our mission is to enable economic growth through infrastructure and energy development, and to provide solutions that support communities and protect the planet.
The Mission statement of Caterpillar is focused at two things. The first is enabling economic growth and the second is investment in creating positive social value. The mission is a reason that a company stands for. Caterpillar’s mission is to create economic value that aids positive social growth. Economic growth through infrastructure – Here the focus is on product but it is not clear. Caterpillar has a huge portfolio of brands and market leadership position in heavy industrial vehicles and equipment but the mission statement omits all these factors. It does not mention the brand’s focus on technological excellence or innovation. These are important areas that must be a part of a brand’s mission.
A mission statement is also a yardstick that mangers can use in day to business for making important decisions. However, the mission statement of Caterpillar lacks specificity. It includes the company’s mission of environmental awareness and protection. Enabling environmental performance is also a crucial part of the brand’s mission strategy. However, the brand also exists for creating long term financial value and returns for its shareholders. Moreover, its products, employees, business operations, all these areas are central to its business which are not included in its mission statement. It does not identify who Caterpillar's customers are and how the brand is creating better value for them. The mission statement is brief and does not express the reason behind the brand’s existence clearly. Supporting communities and protecting the planet, are all a part of the brand’s CSR strategy and not its business or operational strategy. The mission statement must focus on the brand’s business and operational strategies too.
Sources: 1. https://beta.fortune.com/fortune500/caterpillar-59 2. https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/4Q16%20Caterpillar%20Inc.%20Results.pdf 3. https://www.caterpillar.com/en/company/sustainability/vision-mission-strategy.html