Caterpillar Inc. CAT is a multinational company with over manufacturing and servicing locations in approximately countries worldwide. Caterpillar also manufactures and sells a full line of branded Caterpillar gifts and apparel. Founded in through the merger of Holt Manufacturing Company and C. Best Tractor Co. You may have figured that most of CAT's revenue is generated from producing and selling large industrial work vehicles and machinery, but we have found additional and perhaps surprising ways that the company makes money.
Although Caterpillar is known as a leading manufacturer of large-scale machinery, the company also has a hand in producing durable smartphone development and has released a number of smartphones for the industrial market. Caterpillar released the Cat S60 phone in February , which allows users to detect heat patterns using a unique thermal imaging feature.
Similar to Caterpillar's other smartphone models, the Cat S60 was known for its rugged durability. Advertised as "water-resistant," the Cat S60 could operate in underwater depths of up to 16 feet for approximately one hour. This phone has now been replaced by the S61 which also offers air quality monitoring. While Caterpillar generates the majority of its revenue from machinery sales, the company also makes money from its trademark and licensing agreements.
Caterpillar machines are easily recognizable from the company's branded yellow, but that shade of yellow has not been with the company from day one. Caterpillar's machine color originated in after years of gray machinery design. Additionally, the licensing of its branded products and apparel are also key revenue drivers for the business. The company's products are sold in retail stores worldwide and in the company was ranked 28 out of by License Global for its global licensor status. Caterpillar's machinery is sold through a broad network of dealers, and its roots run deep.
Many Caterpillar dealers have been working with the company since While Caterpillar services a global network, the company's business operations have been located in Illinois since its founding in and even before, when Holt produced the first Caterpillar tractor. While most of Caterpillar's machines are manufactured in the Midwest, some of the company's other leading manufacturing plants are located in Russia, China, and Brazil.
Caterpillar moved its headquarters closer to Chicago to Deerfield, Illinois, just a few miles north of the city. Caterpillar generates a significant amount of revenue through subsidiary businesses. In February , the federal government conducted an ongoing investigation of Caterpillar's subsidiaries to ensure that it was appropriately using and disseminating funds within its U.
As of January , no criminal charges had been filed against the company or any of its employees. Caterpillar produces large-scale industrial machinery for a wide range of industries including energy, transportation, and construction.
Leading machinery manufactured by the firm includes tractors, on-highway trucks, off-highway trucks, pavers, loaders, combines, bulldozers, shovels, and excavators.
The company also specializes in energy drilling and commodity mining machines. While Caterpillar generates most of its revenue from selling newly-manufactured machinery to businesses, the firm also rents and sells used machinery. Rental machinery is convenient for construction projects that don't require long-term assets.
Companies can also significantly reduce costs by buying used machinery. This is a list of dealerships for the Caterpillar Inc. This list is both of current and former Caterpillar agents worldwide. The term agent, agency, concessionaire, dealer, dealership, franchise holder etc. The terms can have different legal meaning in some countries, but to most people they are interchangeable terms for the person or company that has the right to sell the particular brand in there locality.
This may be the whole country or just with a certain area around the dealership. Caterpillar tightly controls their dealers to maintain service, and control supply of machines and parts and allow them to provide backup from the central parts supply depots on daily basis. There are several sub-dealers for some market sectors i.
Tractor Wiki. So Caterpillar, which is in a hunt for new revenue because of weakness in key markets, is giving dealers until the end of the year to come up with a three-year plan to capture those lost sales. Distributors who fail to meet their targets could have their dealership agreements terminated, though top executives insist a cull of dealers probably won't be needed. Like its rivals, Caterpillar has integrated all kinds of diagnostic technology into its machines that throws off a torrent of real-time information about the health of the products.
The data helps owners track their equipment, optimize its utilization and manage fuel and maintenance costs. Better exploited by the dealers, the information could immediately increase part and service sales to existing customers, Caterpillar says.
Dealers could anticipate problems, schedule preventive and predictive maintenance and help customers manage their equipment fleets more efficiently. The company says its best dealers already do that pretty decently and have, in the words of Stu Levenick, the group president in charge of dealer relations, "an awareness of about 90 percent of their parts demand by customer, have it very well segmented and understand where 90 percent of the opportunity exists.
Many more dealers are missing out. But they haven't done it because we haven't directed them to do it or helped them to do it. Caterpillar is the latest company to see big dollars in so-called Big Data. There are, by its reckoning, more than 3. Caterpillar believes dealers could be billing for billions of dollars more each year if they did a better job of thinking of those machines as smart digital devices, constantly pinging them with sales and service opportunities - not just dumb pieces of iron.
The push, code-named Across the Table, was unveiled last month at a private meeting of distributors and made public earlier this month at an analyst meeting in Las Vegas. Company executives say dealers are missing out on additional billions in sales by not coordinating better with one another and not offering consistent e-commerce solutions to customers who, in many cases, work with more than one Caterpillar dealer across the globe.
Oberhelman says cooperation and communication among Caterpillar dealers often is "disjointed," especially when it comes to locating parts and serving customers. He cites the example of Australia, where the four dealers that have carved up the country - and Caterpillar itself, which sells a handful of specialized products directly to customers - operate dozens of supply depots whose order and inventory systems aren't meshed.
And we don't really today … have those talk to each other. You need a part in Perth. Our warehouse in Melbourne may not have it, but it may not communicate with all the other places in Australia before we have to go overseas to get it. A big chunk of any incremental revenue the dealers pick up with the push would flow to Caterpillar, says Levenick.
Caterpillar is also challenging dealers to do a better job of navigating the sea change that's taken place in the construction machine market, where sales of equipment to rental companies now outnumber sales to contractors. That creates problems because the independent dealer model, which Caterpillar embraced shortly after its founding in the s, "was never designed originally to handle the financial loads or the operational capabilities of running a rental organization," Levenick says.
Jason Marx, a director in the heavy-equipment practice of AlixPartners, an industry consulting group, says the rental business requires "a huge amount of working capital" and can divert money away from other parts of a dealer's business that might require some funding for growth.
Oberhelman acknowledges the strain the switch to rental is putting on the company and its dealer network. The push is not without risk. Caterpillar has long touted its independent dealers, whose , workers more than double its global headcount, as a key competitive advantage, especially in recent years as lower-priced Asian rivals with less robust dealer support networks rose up to challenge its supremacy in the construction equipment market.
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