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Caterpillar, Inc.CAT
Presented By Group 4:Divyadeep Goel (191138)
Praveen Sankisa (191158)Sudarshan (191177)
Sukrita Goyal (191178)Sunny Behl (191179)
Introduction• Founded in 1925 as Caterpillar Tractor Company (Cat) by Benjamin Holt and Daniel Best
• Worlds largest manufacturer of Diesel Engines and Heavy Machinery.
• 75% of the manufacturing in the US and over 50% of sales outside US.
• Sales over $41billion in 2006, $32 billion in 2009 and $39 billion in 2010.
•Has an extensive dealer network of 220 dealers worldwide – a source of competitive advantage.
Strengths & Weaknesses
Strengths
Holds large portion of market share(53%)
Growth through production not acquisition
Distribution system
High brand recognition
6 SIGMA
Weaknesses
Recent employee reduction
Not Service Oriented
Case Summary
Product centric Service Oriented
Transformation
Why Transformation?
Margins on products are growing thin.
Increase in competition. Some of the competitors include:
Komatsu CNHCumminsJohn Deere
Hence, additional revenue = SERVICES
Plan of Action
Bundle Customer Service Agreements(CSA’s) along with the product.
Select three pilot Dealerships in Latin America(worth $1 billion) and sell the CSA’s.
Find solutions to fill these Gaps.
Gaps Assessment with the three pilot Dealerships.
2000
• Employee Satisfaction• Leadership• Reliable Returns• World Class Core process• Growth
2011
Culture-Create a culture of sustainable development in all our business units. Operations-The Caterpillar Production System provides the recipe for deploying and sustaining excellence in our facilities.Business Opportunities-. Identify and pursue business growth opportunities created by sustainable development.
Critical Success Factors
Ref: 2009 wRatings corporation Pg. 7
Ref: 2009 wRatings corporation Pg. 7
GAP
4 Providers Gap
Expected Service
Perceived Service
Customer Gap
The Listening Gap
The Service Design and standard Gap
The Service Performance Gap
The Communication Gap
Listening GapCustomer Expectation
Company perceptions of customer expectation
Marketing Research
Orientation
• Partially designed Surveys
• Sporadically performed
Upward Communication
• Interaction b/w management & customer
• Too many layers eg. PM CSA
Relationship Focus • No Segmentation
Service Recovery
• No post interaction customer survey
Service Design & Standard GapsCustomer Driver Service Design &
Standards
Company perceptions of customer expectation
Poor Service Design
• Few CSAs• CSAs were not branded• CSAs were created in an
ad hoc manner
Customer Driven
Standards
• Promised but expectations not met
• Operationally focused not customer driven
Inadequate physical
evidence and service escape
• Customer Interact with sales people
• what to offer and what to deliver
• Contries: Culture, law, structure
Service Performance GapCustomer Driven Service Design &
Standards
Service Delivery
• Few CSAsDeficiencies
in HR Policies
Customer Role
Service Intermediarie
s
Failure to match supply & Demand
• Qualified Mechanics• Communication Skills• Lack of Team Work
• Customer & Dealer Communication
• No Reliable System
• Little advance notice• Technical Shortages
during peak construction session
4. Communication Gap
Promotion exclusively focused on product features and benefits.
No advertisements describing CSA’s.Different CSA’s were described and named in
the same way.Absence of clearly defined service features led
to over-promising.No consistent selling process that explained
and differentiated the individual CSA offerings.
Recommendations
The customer needs and expectations under gap 1 which need to be gauged can be classified into following –
1. Responsiveness – Service number availability with consumer. Responsiveness of the tele automated system with
authorized call center in attending the call. The response time of the call center executive in
handling the call. Serviceman in attending to the call and taking the
feedback The time taken by company to act on the feedback.2. Empathy – Individualized attention. The behaviour of the serviceman.
3. Assurance – The knowledge level of call center executive
or the person taking the call in assigning correct serviceman.
The skills of the serviceman in attending the call and servicing the machine properly.
4. Reliability – The ability of the executive taking service
call in understanding the call properly and assigning the proper serviceman.
The ability of the serviceman in accurately diagnosing the problem and solving it.
5. Tangibles – • The tools and servicing equipments with the
serviceman.• The latest technology gear in diagnosing the
problem.• The call attending software should be highly
receptive and customer friendly.
Ref: 2009 wRatings corporation Pg. 7
Ref: 2009 wRatings corporation Pg. 7
1. The CSA’s need to be more in number focusing on different aspects like relationship with customer, branding, convenience, timing, etc.
2. The service literature was not available and serviceman and salesman were not trained on CSA’s.
3. The CSA’s varied across dealers and customers which made them non standard leading to false promises.
4. Improper coordination among dealers led to confusion in delivering CSA’s.
5. Due to varied geographies and cultures of customers, CSA’s had to be a bit customized but under certain standards.
Information regarding the expectations of customers from CSA’s
6. The timeline of taking the surveys need to be changed to quarterly and after 3 months of rendering the service.
Different CSAs
1. “Do it for me” – larger customers Customized, yearly contracts
2. “Do it with me” – medium customers Standard CSAs with option of extra services No/ little Customization
3. “Do it myself” – small customers Altered standard CSA No customization Finance support – service package included in the
loan
About CSA (Customer Support Agreements)
Highly customized and complex– content, length, cost
Sold separatelyLarge customers – high loyaltyLimited the CSA marketability and dealer
operational efficiencyPM CSA – technician activities were not build
explicitly into contracts
Standards and measures to be set up in Gap 2 to deliver to customer expectations
Standard CSA – defined process, terms and conditions. It should be part of performance evaluation for dealership and its employees.
Focus on speed and response time, create service Blueprint
Very formal since it will give competitive edge
How to create and design new CSA
Idea Generation- Screen idea Concept development and evaluation – Test
concept with customers and employeesBusiness Analysis – Test for profitability and
feasibility Service development and testing – conduct
service prototype testMarket Testing – Testing service and other
marketing Mix elementsCommercialization
How should they get everyone to learn about them and deliver them
Service/sales expert - KRAFormal trainingMentoring Using technology – tools like CRM -
Standardized and customized reportsEmpowering techniciansInternal communication channel like extranet,
portalsFixed targets for teamDedicated team and equipments
How dealerships overcome Gap - 3
Tie up with technical institutes like ITIs e.g.- Honda in Rajasthan
Cross trainingPerformance appraisals - mandatory training of soft skills,
variable paysMeetings of different HODs daily for better understanding of
problems and communicationCRM, Scheduling of resources should be done accordingly,
daily reports which tell about Customer care centre should be developed on each dealership Introducing shift system in dealerships during peak monthsFocus on monthly package and schemes like additional service
etc should be given to those who are buying this package.Proper maintenance of records.Monthly internal audits
1. Service Circulars – with the servicemen, dealers, etc.
2. Service Manuals – these contain the complete info about the machine and how to operate or service it.
3. Brochures4. Training Modules – regular training sessions
on and off line.5. Dedicated self service websites.6. Service camps.7. Monthly Customer meets.8. Internal web portals giving product info.
Internal and external material to communicate and operate CSA’s
Thank You