Case Study John Deere

In 1976, Deere & Company was among the world’s leaders of farm and industrial equipment. The majority of Deere’s success was attributed to the light crawler tractor market with over 50% market share. It was at that time Deere earned a reputation for manufacturing reliable small tractor equipment. Deere evolved into producing and manufacturing the larger industrial equipment in phases, beginning in small forestry operations. As farmers and smaller operators sought to diversify their businesses, Deere offered newly innovative attachments and crawlers, and was now seeking to integrate into the large tractor market in phase five. In this phase, Deere introduced the JD750 bulldozer, a heavy contracting

In 1847 John Deere promised, "I will never put my name on a product that does not have in it the best that I have in me." For more that 157 years John Deere has remained true to that commitment -- building their reputation by building value into every machine that bears their name. So you can count on equipment that's as productive as possible. Up and ready to work when you are. And designed to minimize your daily operating costs. Nothing Runs Like a Deere™

This paper thoroughly examines Deere & Company from multiple perspectives. First, a review of the company’s history, products and service offerings, corporate strategy, and a summary of the agricultural and construction equipment industry will be provided. Next, the Deere and Company’s current financial position will be examined. This includes reports of John Deere’s earnings, cash flows, assets and debt management, profit margins, and future projections. These financial statistics will then be compared to the primary competitors of John Deere in order to show the company’s financial viability. After the analysis is complete, a SWOT analysis (strengths, weaknesses, opportunities, and threats) will be conducted in order to identify key success factors and driving forces. Based on the analysis, strategic recommendations that Deere and Company should leverage in order to avoid potential threats and to maintain its position as an industry leader.

John Deere & Company manufactures and distributes agriculture equipment as well as a broad range of construction and forestry equipment. The company is partnered with FedEx in order to maintain the logistics flow involved with the company’s transactions. FedEx is responsible for providing outsourced transportation services to 11 Deere facilities across the US and Canada. The 11 Deere facilities have different service agreements with FedEx in terms of cost and service depending on the type of business unit.

Products. John Deere has a wide portfolio of products, with lawn equipment, farming machinery, and construction equipment, as well as consumer products targeting at the enhancing the brand image and social unity of the equipment users and their family. The consumer products include apparels, hats, and boots for men, women, and kids, and a wide range of toys for kids. It also includes household items, party items, school items, and accessories for the equipment and machinery. These are sold through its dealers, John Deere online store, and those of online dealers such as Rungreen.com. In addition, John Deere is widely exposed to the existing market through social networking sites such as Facebook and Twitter, and through educational videos and product demonstration videos on YouTube and blogs. The logo is green and yellow color, signifying agriculture and construction. Businesses buy the products for farming and construction, while families buy them to work their lawn. Consumer motive is functional with utilitarian need, though some consumers might buy the premium products for hedonic reason to satisfy their need for expression.

John Deere is a man who has changed the life of an Illinois farmer. His success in that lead to even more success like his very own company. John Deere innovated plows and made an impact on society by helping over one thousand farmers succeed in their jobs with his improved plow while showing people that persisting can lead to a solution.

How strong are the competitive forces confronting Deere in the global market for agricultural and construction equipment? Do a five-forces analysis and identify the key driving forces and key success factors to support your answer.

The heavy equipment manufacturing industry, more commonly referred to as “machinery manufacturing,” includes construction equipment, mining equipment, and agricultural machinery. Construction machinery includes earthmoving equipment, concrete equipment and road equipment such as cranes, loaders, draglines, mixers, pavers, and excavators that can be used in the building and mining industries. Agricultural equipment generally refers to compact tractors, combine harvesters, and other farm equipment, while the mining equipment market includes underground mining equipment, portable drilling rigs and parts, crushing machinery, and other screening, washing, and combination equipment.

Industrial Equipment INC. sold and serviced a variety of industrial equipment and related products to hospitals, nursing homes, hotels, motels and various other organizations in the four Atlantic Canadian provinces of New Brunswick, Nova Scotia, PEI and Newfoundland/Labrador. In addition to distributing a broad line of specialized equipment IE provided design, specification and planning assistance to architects,

Competitive Rivalry: It would appear that Deere & Company has set itself apart from all potential competitors. They have created an extremely unique brand that has attracted consumers away from potential competitors and really has been able to put them in a segment of their own.

Deere & Company, together with its subsidiaries (John Deere), incorporated in 1958, operates in three business segments: agriculture and turf segment, construction and forestry segment, and credit segment. The agriculture and turf segment, created by combining the former agricultural equipment and commercial and consumer equipment segments, manufactures and distributes a range of farm and turf equipment, and related service parts. The construction and forestry segment manufactures, distributes to dealers and sells at retail a range of machines and service parts used in construction, earthmoving, material

One of the most notable outcomes of the competition between Ford and General Motors has been their control of the global automobiles industry. Both companies enjoy have many clients within the United States of America and other parts of the world. This would not have been the case had the two companies not been in direct competition with each other. Whenever Ford introduces a new model in the market, General Motors is always quick to do the same (Ford 14). Similarly, the development of a new model by the latter company serves as a lead for Ford Motor Company to introduce a new brand. This neck-to-neck tussle for the American and global market for automobiles has positively affected the exceptional success of both companies. In most cases, companies tend to view competition with a perception that is more or less negative.

This section presents a detailed analysis of the company’s strengths, weaknesses, opportunities, and threats that affect John Deeres operation within the industry.

The construction and forestry segment manufacturers and distributes an expansive line of machines and service parts used in a variety of industries. Although this market segment has less of an impact on their financial performance than agriculture and turf, Deere is expecting revenue to increase about 8% in 2013. This increased revenue will primarily come from improved economic conditions in the U.S. Finally, the financial services segment mainly derives its revenue from their dealer network and the finance of customer purchases is expected to see improvement. As you can see from the chart below, agriculture and turf account for nearly 77% of the companies operating profit and grew over 13.5% in 2012 as compared to 2011. While financial services experienced a decrease in overall operating profit as compared to 2011, it remained second ahead of construction and forestry contributing $712 million in operating profit to the company.

The objective is to determine the most profitable (revenue minus cost) product based on its attributes relative to the market but also accounting for what the competition is selling comparably. Because of the complexity there are a great deal of parameters to take into consideration as part of the “game form” including the number of manufacturers in the market, number of products offered by the manufacturer, number of products on the market, number of segments in the market, engineering costs of a given product by a manufacturer, market demand for a given product, market share of the manufacturer (brand influence), and the probability of another manufacturer producing a similar product. One assumption factored into the game is that strategically a competitor would consider not entering a market (production of a given product) saturated with similar products.