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Caterpillar Competitors Analysis : 5 Biggest Competitors

Caterpillar Competitors Analysis : 5

Biggest Competitors
Competitors / By John Hughes
 Table of Contents

1. Caterpillar’s Business Strategy

2. Caterpillar SWOT Analysis

2.1. Strengths

2.2. Weaknesses

2.3. Opportunities

2.4. Threats

3. Caterpillar Competitor Analysis

3.1. Komatsu Limited (JAPAN)

3.2. XCMG (China)

3.3. John Deere (USA)

3.4. Volvo CE (Sweden)

3.5. SANY

4. How Caterpillar Stands Out Against Its Competitors

5. Caterpillar Competitor Analysis (FAQs)

5.1. Question: Who are Caterpillar’s Main Competitors?

5.2. Question: What is Caterpillar Known For?

5.3. Question: Is Komatsu Better Than Caterpillar?

6. Conclusion

6.1. References

Caterpillar Inc. [NYSE: CAT] is a global leader in the design,

manufacture, and commercialization of construction and mining
equipment, diesel and natural gas engines, industrial gas turbines, and
diesel-electric locomotives.

The Company also offers financial services through The CAT

Financial Brand. With an extensive product range that caters to a
large customer base, it has a broad clientele served by about 99,100
employees spread across the world.

Caterpillar offers a wide range of equipment, with approximately 20

products in its portfolio that helped the firm achieve worldwide
stature, including position #78 on the fortune 500 list in 2020.
The firm is publicly listed and has its headquarters in Peoria, Illinois.
Its total revenue was $41.7 billion in 2020, with an operating profit
margin of 10.9 percent.

Despite the downturns caused by the Covid-19 pandemic in 2020, the

firm still maintained its leadership position in the global construction
equipment manufacturers segment with a market share of 13 percent,
followed closely by Komatsu (Japan) with 10.4 percent.

This reflects the quality of the products manufactured by Caterpillar

and the all-inclusive services offered by the firm.

Caterpillar’s Business Strategy

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Since its involvement in the First World War, Caterpillar has been at
the forefront of developing new technology that improves
productivity and efficiency in several areas. Its focus on solutions that
enhance customers’ productivity and its unprecedented commitment
to creating strong global brands result in exceptional growth and
profitability.

Beyond its constant focus on improving products and services,

Caterpillar invests in research and development (R&D) to ensure that
it offers quality solutions. This is apparent in the firm’s foray into
electric-drive systems and battery-powered mining trucks to support
their customers’ goals towards green energy.

By investing in areas that create value through the Operating and

Execution model, Caterpillar has remained committed to its
enterprise value competency. This entails identifying segments that
have the potential for growth and implement strategies that will
enhance profitability.

Caterpillar boasts extensive partnerships with global leaders in all its

major businesses, with strategic deals that offer growth opportunities.

To them, it’s a competitive advantage that aids in differentiating their

products and services from the competition. This enhances its ability
to deliver quality, reliable solutions that address various challenges
facing the entire industry.

Strategic acquisitions and association deals are also significant

catalysts in Caterpillar’s growth, especially those opening up new
markets and offering distributed and diversified manufacturing
opportunities and solutions.
An example is the acquisition of CarbonPoint Solutions, a carbon
capture technology company that will help Caterpillar further its
efforts in reducing carbon emissions.

Caterpillar SWOT Analysis

Strengths
Extensive product portfolio: Caterpillar is a company that
provides solutions for various industries, from construction to
mining. Its portfolio entails more than 20 products that cater
to a vast market, including heavy equipment and engines. The
Company also extends its services by providing financial
solutions to customers, offering competitive warranties and
flexible financing options to boost customer productivity.
Strong brand image: Caterpillar is a brand name that
resonates with most people, especially in the construction
industry. The Company established this positive image
through authenticity and continuous innovation. Companies
all over the world use Caterpillar products, thus boosting the
firm’s international recognition. This fosters a sense of trust
and respect from consumers, making the brand a leader in its
industry.
Superior R&D capabilities: Caterpillar possesses the
resources, knowledge, and technologies to create market-
leading products. It commits to partnering with leading global
companies, institutions, and governments to develop products
that address the most pressing industry issues. The result is
innovative solutions that meet customer needs and
expectations, including improving environmental
sustainability.
 Strong dealer network: Caterpillar has a vast dealer network
that supports its business by engaging with customers,
building solutions, and resolving issues. The Company boasts
178 dealers distributed worldwide, which increases its reach
and enhances its brand visibility. Caterpillar’s global presence
and its capabilities to provide reliable and high-quality
products foster customer loyalty.

Weaknesses
Weakening Financials: Caterpillar is experiencing a decline
in its revenue and profits per share despite being a leader in
the industry. From its 2020 annual report, the Company
recorded a sales revenue decline of 22 percent due to reduced
sales volume primarily driven by low demand. However, this
could be because of the Covid-19 pandemic that disrupted the
entire world economy. Its profits per share over the same
period decreased from $10.75 in 2019 to $5.46 in 2020.
 Dependence on the North American market: With
worldwide brand recognition, Caterpillar still depends on the
North American market for a significant amount of its sales
revenue. If the 2020 annual reports are anything to go by,
more than 40 percent of Caterpillar’s revenue comes from the
US and Canada. The Company can benefit from expanding its
market presence in emerging markets like Africa and India to
mitigate the effects of any economic turbulence.

Opportunities
Emerging markets: Caterpillar’s future lies in emerging
markets, especially Africa and Asia. The vast majority of the
population resides in these regions, which possess abundant
natural resources, including oil and metals. As a result,
demand for mining equipment is expected to increase
significantly. Serving this market with products that cater to
 its needs can give Caterpillar a much larger share in this
industry.
Rising environmental awareness: The Company’s service
strategy is to improve customer efficiency, competitiveness,
and productivity. Caterpillar can tap into its existing
capabilities to address the threats posed by climate change
which are driving today’s consumers to take measures that
reduce their carbon footprint. For example, the demand for
electric and hybrid vehicles has increased significantly
because of campaigns to reduce carbon emissions. Caterpillar
can use its strengths in technology to develop products that
address this demand.

Threats
 Competition: Caterpillar faces intense competition from
companies capable of providing customers with similar
products. For example, it competes against Komatsu, a well-
known Japanese company, for its leading mining equipment.
Other competitors include Hitachi Zosen Corporation,
XCMG, and SANY.
Economic downturns: The recent Pandemic crisis caused
severe damage to the world economy, which could indicate
another economic downturn. Catalysts for this are oil prices,
unreliable currencies, and political instability in many parts of
the world. If another financial crisis strikes, Caterpillar has to
ensure that it has a continuation plan in place to save itself
from any dire consequences.

Caterpillar Competitor Analysis

Caterpillar competes in Construction industries where the Company
provides earthmoving and material-handling equipment, the Resource
Industries where it offers track-type tractors and utility vehicles, and
Energy and Transportation where the Company manufactures diesel
and natural gas engines.

This section looks at Caterpillar’s competitors in terms of their

market share in respective segments, their financials, market value
equity, and the competitive landscape between them.

Komatsu Limited (JAPAN)

Komatsu Ltd (TYO: 6301) is a Japanese company that manufactures
construction, mining, and on-highway engines. It also manufactures
military and diesel engines alongside industrial machinery. The
Company is listed on the Tokyo Stock Exchange, where it has a
market value equity of $23.744 billion as of September 22, 2021, and
boasts 62,823 employees.
Komatsu competes with Caterpillar in the construction equipment
industry, controlling 10.4 percent of the global market share. This
includes excavators, motor graders, backhoe loaders, and compactors.

It also holds a significant stake in the mining industry, where it

manufactures dump trucks, hydraulic shovels, and scrapers. The
Company’s revenues for the 2020 fiscal year were valued at $22.493
billion, representing an 8.29 percent decline from the previous year.

Komatsu’s business plan is to form strong connections with clients by

matching them with the best construction equipment. This is a win-
win strategy that promises growth and financial success for both
customers and Komatsu. While Caterpillar reigns supreme
worldwide, Komatsu leads in several Asian nations such as China and
Japan.

Caterpillar’s competitive advantage over Komatsu is its more

significant global market share, higher revenue, and broader portfolio
of products. However, Komatsu is keen on providing tailor-made
financial solutions to its customers and linking its workplaces through
IoT to improve its efficiency.
XCMG (China)
XCMG is a Chinese state-owned company. It operates as both a
heavy machinery manufacturer and service provider. The Company is
listed on the Shanghai Stock Exchange and has a market value equity
of 53.034 billion Chinese Yen ($8.204 billion) as of September 22,
2021.

Since its founding in 1943, the Company continued to grow and

expand, operating as a multinational corporation with offices and
dealerships in more than 180 countries, including America, Africa,
and Europe. XCMG’s business is focused on construction
machineries such as excavators, heavy trucks, Concrete machinery,
and hydraulic cranes.

Its extensive product line and world-class products ensure that the
Company stays at the forefront of its industry. XCMG is also China’s
largest construction machinery exporter, with over $1.4 billion in
annual exports for its earthmoving machinery sectors.

In 2020 it ranked as the third-largest Company globally in the

construction equipment machinery industry with a market share of
7.9 percent.
The Chinese government is investing trillions in the construction
sector, increasing the demand for construction machinery. Since
XCMG has the government’s backing, it has a competitive advantage
over its rivals in terms of funding and resources. Caterpillar’s
strengths include a more substantial market share in America, Europe,
and Africa than XCMG.

John Deere (USA)

John Deere (NYSE: DE), headquartered in Moline, Illinois, is an
American Company that designs, manufactures, and distributes
agricultural equipment, construction machinery, and forestry
equipment. The Company holds a top rank in the agricultural
machinery sector with a 17 percent market share in the global
agricultural tractor market.

The Company rebranded to Deere and Company but still maintains

its original name, John Deere. Through its three divisions, John Deere
serves customers in over 200 countries. In 2020 it recorded a net
income of $2.751 billion and total revenue of $35.54 billion with
employment figures of 69,634 people.
John Deere and Caterpillar are direct competitors in the heavy
equipment sector. John Deere’s product line includes various tractors
and other agricultural equipment and forestry and landscape products.

It also provides multiple construction machinery such as excavators,

skid loaders, trucks, and motor graders. However, it primarily focuses
on the agricultural market, unlike Caterpillar.

Caterpillar’s extensive product line allows it to compete in more

market segments. Moreover, Caterpillar is currently the world leader
in construction equipment manufacturing, while Deere’s primary
revenue sources are forestry and agricultural machinery.

Volvo CE (Sweden)
Volvo CE, headquartered in Gothenburg, Sweden, is one of the
world’s largest heavy equipment and trucks manufacturers. Founded
in 1832, Volvo CE has grown to become one of the world’s leading
companies in modern technology, environmental care, and backward
integration.
Volvo CE is a subsidiary of the larger Volvo Group, which trades on
the Stockholm stock exchange in Sweden under the Ticker code
[VOLV].

Today the Company operates as a world-class manufacturer and

supplier of complete lifecycle solutions for customers in the
construction equipment sector.

It has about 14,000 employees distributed across over 200 offices and
dealerships in over globally. Despite the global pandemic, its sales
increased by 6 percent in the fourth quarter of 2020 compared to the
same quarter in 2019.

Volvo CE has a strong competitive advantage because of its wide

range of products, high reinvestment rates, and a solid customer base
in Europe, America, and Africa. Caterpillar’s strength lies in its larger
sales revenue and strong brand recognition.
SANY

SANY, headquartered in Shanghai, China, is one of the world’s

largest heavy machinery manufacturers. Founded in 1989, it has a
long history of quality and innovative designs. The Company boasts a
workforce of over 70,000 people and annual revenue of $15.1 billion
in 2020.

Through its extensive focus on R&D, SANY has developed into a

global player in the construction equipment sector. Its products are
popular among private and public customers, especially in Asia,
where most machines are manufactured.

Caterpillar and SANY compete in the construction machinery sector,

where they fight for market share. SANY holds a market-leading
position in Asia, but Caterpillar’s large customer base worldwide
gives it an advantage. SANY controls 7.5 percent of the global
construction machinery market, while Caterpillar controls 13 percent.

In a world where countries desire greater independence from foreign

capital, SANY addresses this by using its lower cost of production to
provide the same quality as Caterpillar for a much lower price. Its
continued penetration into emerging markets such as Africa
represents a company focused on future growth.

How Caterpillar Stands Out Against Its

Competitors
Caterpillar’s core strategy is to provide customer value through a
complete equipment portfolio and a global support system. Its goal is
to offer each customer the best choice, always striving to exceed
customers’ expectations by meeting their needs.

The Company sells worldwide. However, a considerable chunk of its

revenue stems from North America. This shows it has a strong
foothold in its home market and can expand globally.

CAT provides equipment financing in addition to equipment sales.

This allows customers with limited capital resources to purchase
higher-tier products. Caterpillar understands that developing
countries need financing options for their construction needs.

For the construction industry, safety is of utmost importance.

Caterpillar has put many safety features into its design. Because of
this, CAT is one of the most trusted companies related to construction
safety equipment. The Company also manufactures high-quality
protective gear such as footwear, helmets, gloves, and facemasks.

Caterpillar’s augmentation in the renewable energy sector reflects its

commitment to future markets with growing demand for clean power.
By positioning itself as a leader in green machinery, Caterpillar can
expect a more significant market share in this emerging market. This
commitment will help to grow the Company’s revenues in the long
term.

Caterpillar Competitor Analysis

(FAQs)
Question: Who are Caterpillar’s Main
Competitors?
Answer: Caterpillar’s main competitors are Komatsu, Volvo CE,
SANY, XCNG, and John Deere. Other competitors include JCB,
Manitou Group, Terex Corporation, Hitachi Construction Machinery
Co., Ltd., Liebherr-International AG, and SDLG.
Question: What is Caterpillar Known For?
Answer: Caterpillar is known for producing construction machinery,
mining equipment, power generation equipment, and engine
technologies. It is a world leader in construction and mining
equipment, diesel and natural gas engines, industrial gas turbines, and
diesel-electric locomotives (diesel-elec.).

Question: Is Komatsu Better Than Caterpillar?

Answer: Komatsu is not better than Caterpillar. Caterpillar has a
strong foothold in the industry, and it is one of the biggest companies
in its line of business. It has established itself as an industry leader
and makes some of the best products available on the market. While
Komatsu also produces good equipment, Caterpillar holds the edge
against its competitor.
Conclusion
Caterpillar is a global leader in the manufacturing of construction,
mining, and other heavy equipment. The Company has deep pockets,
which allow it to invest heavily in research and development.

Caterpillar’s customer-centric solid approach, combined with its

constant reinvestment, has allowed it to remain one of the world
leaders in heavy machinery sales. To stay competitive and further
grow its market share, Caterpillar will have to expand in emerging
markets and further differentiate its products.

Further Read:

Brightedge Competitors Analysis

GE Competitors Analysis
Siemens Competitors Analysis
Splunk Competitors Analysis
References
ww.volvoce.com/global/en/news-and-events/press-
releases/2021/sales-up-6-in-volvo-construction-equipment-
4th-quarter-2020/
https://www.sanyglobal.com/press_releases/684/
https://www.statista.com/statistics/258589/leading-
construction-equipment-manufacturers-based-on-market-
share/
https://www.prnewswire.com/news-releases/some-of-the-
major-companies-dominating-the-market-studied-are-john-
deere-cnh-industrial-agco-corp-kubota-corp-class-mahindra–
mahindra-kuhn-group-yanmar-co-ltd-and-escorts-and-they-
captured-63-of-the-market-in-2018-300991064.html
https://www.macrotrends.net/stocks/charts/
https://finance.yahoo.com/quote/
https://www.caterpillar.com/en/investors/financial-
information/proxy-materials/annual-report-to-
shareholders.html
About Latest Posts

John Hughes
John Hughes is a seasoned expert in digital marketing strategy, business model analysis, and financial
insights. Possessing a robust background in finance, his expertise extends into deciphering complex
business models, conducting comprehensive SWOT analyses, and staying attuned to the latest market
trends.
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