Everybody knows Caterpillar Inc by the big yellow equipment they use. But did you know that they started grey?
Caterpillar is a much bigger business than most people know, starting as a farm equipment company and growing into a multi-billion dollar conglomerate.
They strategically made great business decisions and key partnerships to help them survive and thrive throughout the years.
If you would like to learn more about Caterpillar Inc. and the impressive business decisions they have made to become the well-oiled machine they are today, then check out this guide of 10 things you may not have known about Caterpillar!
1. A Story of Growth
The first tractor ever made was in 1904 by a man named Benjamin Holt who founded Holt Tractor Company. They merged with the Best Tractor company (founded by Daniel Best) in 1925, to form the Caterpillar Tractor Company. This strategic alliance is where Caterpillar began.
Benjamin Holt and Daniel Best started selling farm equipment from only two United States locations. Today the company does business in more than 180 countries worldwide, in 27 different industries, and has offices in 20 countries. They also have plants in Russia, China, and Brazil.
In 1925, when the strategic alliance between Holt Tractor Company and Best Tractor company formed, they were doing about 13.6 Million in sales. Today that number is around 54.7 Billion in total revenue. On top of that, the company has never missed a dividend payout to its investors since the company went public.
2. Trademarks and Licensing
Most people can recognize Caterpillar’s logo when they see it. This is not a coincidence, Caterpillar has branded their business over the years to become a global presence.
Caterpillar does a great job when it comes to licensing its brand for a return. On this past year’s 150 top global licensers, Caterpillar placed 28th, bringing in more than 2.2 Billion. That’s ahead of Ford, the NFL, Hershey’s, Coca-Cola, etc. This just shows how strongly consumers feel about the quality of their products.
Caterpillar distributes machinery through a massive network of dealers. The network of distributors is worth about 23.4 Billion alone. And the best part, many of the dealers that Caterpiller has partnerships with have been with them since they started in 1925.
One of its longest business relationships with the company is with Yancey Brothers. They were Caterpillar’s first dealership. The original agreement date was December 19, 1918. More than 100 years ago.
4. Industrial Smartphones?
No, that is not a typo. In February 2016, Caterpillar Inc. released its industrial smartphone, the Cat S60. The Smartphone came with some pretty impressive features to make industrial professionals’ lives a little bit easier.
The smartphones are known for their durability. They are labeled as “waterproof” up to 5 meters for 60 minutes. They also are tested for how far it can be dropped, which they claim up to 6 feet. The glass is made from Gorilla Glass, which is chemically treated and scratch-resistant. Gorilla Glass is also made by Corning, who has been specializing in glass for more than 165 years.
A Subsidiary is a company that is owned by another company, the parent company. Caterpillar has more than 20 brands within its portfolio, offering services, parts, machines, engines to many different industries all over the world.
Some of the subsidiaries include:
6. Industry leader
Caterpillar not only leads the construction manufacturing industry, but they also lead in many of the industries that it operates.
Caterpillar is the largest manufacturer of construction and mining equipment. The company generated more than 22 billion in sales from its construction industries. They also made almost 19 billion from energy and transportation and another 9.6 billion from its resource industry.
That’s over 50 billion in generated revenue between the three industries!
Caterpillar has created diesel engines since 1931. In 1997, Caterpillar Inc. acquired Perkins engines and was the world’s largest diesel engine manufacturer. Shortly after, Cummings took the title of the world’s largest diesel engine manufacturer.
Caterpillar engines are used in semi-trucks, marine vessels, ships, and emergency generators.
7. Rental Equipment
Caterpillar is a leader in large scale industrial machinery rentals. They rent equipment to industry professionals in multiple industries including energy, transportation, and construction.
Some of the machinery that is produced and rented out by the company includes
This is a pretty wide array of equipment that is rented out. Though Caterpillar makes most of its revenue off of selling new equipment, renting is a great way to generate returns. This is beneficial for Caterpillar and its partners that rent the used equipment. Companies get to save money through renting, and Caterpillar gets multiple revenues from being the renter.
8. Energy and Transportation
Energy and Transportation is one of Caterpillar’s leading industries, behind construction manufacturing of coarse.
Caterpillar has also been manufacturing natural gas engines and generators since 1941.
Some of the other products included in this segment are:
And manufacturing various engines for:
9. Research and Development
At this point, most people know what Caterpillar has to offer in terms of their products. But what you didn’t know is that Caterpillar has been planning for the future for some time now.
Caterpillar has spent nearly 2 billion every year on Research and Development for the past few years. They also own over 20,000 patents in various industries. One of those industries is solar power.
In 2015, Caterpillar formed a strategic alliance with First Solar. Then in 2018 formed a new partnership with SunPower, to sell their P-series product.
10. Caterpillar Inc. Foundation
Caterpillar Inc. created a foundation with a big mission in mind. To help people rise out of poverty.
They have formed partnerships with key businesses, non-profits, governments, and citizens to work together to end poverty.
Some of the partners include:
Most recently, Caterpillar has helped provide support for people who have been affected by the coronavirus outbreak.
For More Information
Caterpillar Inc. is a great company that has shown its brilliance throughout the years. They have been through adversity and it has only made them a better company. They have been planning for the future, and it has been paying off for them.
For more information about Caterpillar and the products they sell, please check out our page!