Caterpillar, the leading construction equipment company, has just been appointed a new CEO. Over the last couple of years they have noticed extreme fluctuations in the industry. One minute things are booming, and the next sales are tight. It is hard for Caterpillar to predict the flow of business, and when the industry isn’t doing well factories are closed, and thousands of people are put out of work. When sales are low, they work on refurbishing equipment for customers, which helps make up for some of the losses. They have also worked on predicting when the industry will turn. They can predict fluctuations about six months in advance, but they are never certain on how serious the changes will be. The new CEO has six months before taking over, and must find a better way to manage during downturns in the industry. A couple of ways the company can prepare itself for major downturns is by promoting their products in new locations, continuing to refurbish old equipment, and focusing on retaining customers. …show more content…
The construction equipment industry differs from others because their products life spans are much longer. When you purchase an IPhone you may only have it for a year before it breaks or you upgrade to the new one; construction equipment can last for ten years. If Caterpillar sells 1,400 machines to Argentina then they are going to be all set for a while. One of the ways the company can help to offset the downfalls is by focusing on new locations across the globe. They need to be constantly promoting their products, and making good relationships with their distributors. The more locations they sell to the less difficult the fluctuations will be because if every year they are selling to new locations they are always keeping a steady flow of products. Then the customers from ten years ago will eventually work their way back around in the