Strategic Management Essay Example | Topics and Well Written Essays - 2000 words - 3

Strategic Management - Essay Example An organization performs poorly when there is low climax in the cyclical marketplace. In order to augment the demand for services and products in mature markets, companies will result into restructuring. Through restructuring, an organization anticipates enhancing of the products or services in the market. Mature product marketplaces are a factor of all product lifecycles. After the initial fast growth period is complete, sales will persist to increase but at a slower rate (Thompson & Martin 2010, p. 383). Predicaments associated with mature markets comprise; increased threat of rivals capturing market share, slower expenditure recovery, and risk of products budging into the decline phases of product lifecycle. Once entire product marketplaces go into maturity, there is petite scope for expansion through innovation since the marketplace is already saturated. However, it is significant for every technology based corporations to retain research and expansion expenditure with an aim of sustaining a competitive advantage and keeping up with rivals. In a mature market, possibilities for expansion become significantly limited; alternatives comprise exploiting fresh markets and tactics to endeavor capturing rivals’ marketplace share. Maturity of markets increases the significance of brand names. Caterpillar has an advantage of a tremendously well established and globally known product name (Thompson & Martin 2010, p. 385). Until 1990, the organizational structure of Caterpillar paid attention to functional areas for instance accounting, manufacturing and engineering. The notion was that if every functional area attained its objectives and goals, the client would be satisfied and the firm prosperous. In mid-1990, the company... This paper stresses that the positive effects exceeded the negative effects on performance since the introduction of fresh performance measures and restructuring of the organization resulted to enhancement of the market, financial and productive performance of the company. The development of fresh performance assessment measures a reorganization of business units enabled Caterpillar to achieve its chief goals. The restructuring and execution of the fresh performance assessment system enabled Caterpillar to increase flexibility, responsiveness and customer focus. This report makes a conclusion that Caterpillar Inc. is the global dominant producer of mining and construction equipment, industrial gas turbines, natural gas and diesel engines, and diesel-electric trains. The corporation is also a dominant services provider through Caterpillar Remanufacturing Services, Caterpillar Financial and Progress Rail. In 1990s, the company initiated restructuring process in order to enhance its performance. The restructuring process was largely influenced by the fact Caterpillar products were operating in mature and cyclical markets. The new strategy, which was adopted by the company in 1990s positively, transformed the financial, market and productive performance. However, the new strategy had negative spillover effects on the performance of the company although the impact was not substantial. In 2010, the company adopted a new business tactic, which has enhanced its performance and competitiveness especially in developing economies.