Sakina Middleton Chapter 9 Closing Case

Background
Formed in 1925
C.L. Best merger with Holt Caterpillar Caterpillar Tractor Co.

Three principle business lines:

Machines Engines Financial Products

Early Years
Consolidated product lines offered only five tractor styles Seabees used products during World War II Caterpillar grew rapidly during the post-war construction boom
First venture outside the United States in 1950

Dollar effect in the 1980s vs. 2008

1980s Stronger than the Japanese yen Komatsu had a price advantage Market share declined 2008 Dollar strengthened Price of exports rose for foreign currencies Negative impact on revenues Favorable impact on costs

Hedging to reduce FX risk

Expanded network of foreign manufacturing operations 102 manufacturing facilities located outside North America Globalization strategy reduced the impact of fluctuations in the value of the dollar

Questions?