Caterpillar Tractor Company (CAT) is a Fortune 500 multinational company
with approximately 50 percent of its product sales outside the U.S. The success
of its business plan is obviously very dependent upon events that occur around
the globe. There are many other multinational companies in other industries
that also must confront the challenges of trading in the international marketplace.
The purpose of this exercise is to see what insight can be gained from an
industry analysis and from knowledge of a multinational firm's business statements
regarding its current status vis-à-vis conditions in the overseas markets
that it serves.
a. Visit S&P's Market Insight database at mhhe.com/edumarketinsight.
Click the "Company" tab and locate the page for "ticker"
CAT. Identify what industry group ("GICS Sub-Industry Group") CAT
belongs to.
b. Click on the "Industry Analysis" tab and learn what the status
of the industry is as it relates to the international marketplace.
c. Now return to the "Company" page for CAT and click "Stock
Report" to obtain information on Caterpillar's business plan under "Business
Summary." Does the information you obtained in part (b) suggest that
the international business climate is favorable to Caterpillar's business
plan, considering the markets in which Caterpillar hopes to compete successfully?
d. Would you choose to be a buyer of Caterpillar's stock? Why or why not?
Does the current international outlook affect your decision in some significant
way?
e. Return to the "Company" page for CAT and click on "Wall
St. Consen." Is your decision in part (d) consistent with the consensus
view among professional investors on Wall Street?
f. Pick another well-known multinational company from a different industry
group and repeat this exercise. Is there a difference in the conclusions that
you've drawn for Caterpillar versus the other company you selected? Do these
differences relate to the industry group or to the geographic regions that
are being serviced by the two firms, or both?
