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Caterpillar (CAT)

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Caterpillar (CAT)

Caterpillar studies SWOT analysis for its business expansion in South Korea and Russia to evaluate the best country to expand into.

South Korea

Expanding Caterpillar into SouthKorea would be faced by several weaknesses. First, raw materials in South Korea are expensive thus would increase the cost of production of CAT. Increasing the cost of productionwould mean that the company would benefit less from the expansion. Additionally, the political instability in SouthKorea would affect the expansion. North Korea and South Korea are still at war with one another, and this affects business. Expanding CAT into SouthKorea would be affected by the instability affecting its productivity. Cross-cultural challenges exist in South Korea due to cultural differences such as language barriers and differences in food. Caterpillar workers would face difficulties coping in South Korea due to language difference and difference in food because in South Korea most foods are Korean. Caterpillar would face ethical issues such as last minute activity scheduling. South Koreans are fond of making official adjustmentsduring the very last moment. The company can get into contracts with individuals to limit them from making last minute adjustments

Russia

Expanding CAT into Russia would also be faced withsignificant threats. First, coming up with intellectual property rights in Russia would be challenging for the company. The company would spend more on attaining intellectual property rights reducing on their profits. Additionally, Russia is a country where the government is well known for interference. This would mean that CAT would suffer interference from the government thus getting interruptions from the normalworking of the company.The major cultural challenge the company would face is language barrier because englsh is not common in Russia. Corruption is an ethical issue of great concern in Ruusia. Caterpillar ought to be ready to face ethical issues such as corruption and this can only be solved by coming up with integrity contracts with various individuals involved with the company.

Recommendation

I would recommend that CAT expands into South Korea because its economy is growing at a great rate. The weaknesses of entrance in South Korea are less significant thus making it easy for the company to enter in the market.

 
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