Threat posed by new entrants: Low Caterpillar's core machinery industry has numerous barriers to entry that make it difficult for new organizations to enter the market. It is a mature and highly competitive industry, with a few dominant competitors that have consolidated their position over the decades. Furthermore, these companies have sustained a competitive advantage over any new entrant attempting to enter the industry. The large initial capital investment required for new entrants is another major obstacle. The cost of machinery and production is high. It is extremely important and expensive to have a global presence in the manufacturing industry as it is extremely expensive to ship machinery to customers all over the world. Maintaining profits in this competitive industry is very difficult. The main competitors in the industry have a large portion of the entire market, almost 80% of the market they control. This makes it extremely difficult for small entities entering the market to maintain their position in the market and remain competitive. Supplier Bargaining Power: Low/Moderate Caterpillar has a low to moderate risk in terms of supplier bargaining power. This is due to the large number of companies that provide resources to Caterpillar which, in turn, can easily change its suppliers without major hitches. Additionally, Caterpillar manufactures its own engines and assembles its own machinery, this helps the company save money in the long run. Suppliers of raw products such as steel, rubber, plastic and other raw materials are Caterpillar's only concern. These commodity industries have many companies and control the prices of individual resources. Companies must keep costs to comparative customers at... middle of paper... petition is a dynamic process that continually reframes structural change in the industry and if structural transformation is rapid, the five forces model has value limited predictive. Furthermore, it is perhaps not possible to evaluate the attractiveness of an industry independently of the resources a firm brings to that industry. It is therefore argued that this theory is combined with the Resource-Based View (RBV) so that the company can develop a much more robust strategy. It provides a simple perspective to access and analyze the competitive strength and position of a company, business or organization. Works Cited Matthew J. Anderson, “Caterpillar Inc. (CAT)” Fisher College of Business Equity Research, November 20, 2012http://fisher.osu.edu/supplements/10/9160/11.20.12%20Matthew%20Anderson%20Final %20Analyst%20Report%20-%20Caterpillar%20Inc..pdf