The company has grown substantially over the past several years in terms of revenues, profits and share price. In 2008, however, the company's share price has declined 45.3% from the beginning of the year. As the economic crisis spread overseas, Caterpillar's policy of geographic diversification is at risk of being insufficient to insulate the firm from global economic catastrophe. Maintaining the current path, however, recognizes the long-term strength of their strategy. Moreover, it allows the company to continue to strengthen some its existing new initiatives, such as its logistics business, railroad subsidiary and its solar turbine business. Caterpillar typically takes a cautious approach to building and integrating new businesses so drastic moves right now may not fit with the company's overall strategy.

Another alternative is to continue to expand into different product lines. Caterpillar has a strong, recognizable brand name. They have successful moved into financial services and apparel using...
[ View Full Essay]