COMPETITIVE LANDSCAPE
Besides the goal of increasing revenues, the most important reason for the Vision 2020 objective to move into services was that competition was heating up and the company saw the potential for competitors to capture the growth and profits that Caterpillar assumed it would achieve. Competition came from a number of different places. Third party service providers that allowed customers to outsource their entire fleet management for both Caterpillar and non-Caterpillar equipment were emerging. Compared to Caterpillar's nationally-organized dealer network, these service companies operated internationally, allowing customers to work on construction projects all over Latin America without having to engage with multiple Caterpillar and non-Caterpillar service providers. While their service offerings and competencies were generally less sophisticated than those of Caterpillar dealers, they were developing successful customer relationships within certain market segments. Fluor, a Fortune 500 company, through one of its subsidiaries—Ameco provided total service solutions, and had successfully grown its fleet management business in Latin America.
Other competitors, aftermarket suppliers and distributors, were commercializing "will-fit" parts that, though inferior in quality and durability, were sold at significantly lower price points. While offering no services, these companies held about 30 percent to 50 percent of the aftermarket in parts.
Thousands of small local workshops also offered repair services ranging from simple repairs to complex ones. Many of them had been established by former Cat-
erpillar dealer mechanics and enjoyed high customer acceptance, but none had the financial reserves to invest in large outlets or market coverage. Many customers also had their own mechanics, which they used for both maintenance and repair activi-
ties. Small workshops and customer mechanics had difficulty keeping up with the increasingly sophisticated technology built into new machines, which required both