How Strong Are The Competitive Forces Confronting Deere Case Study

An analysis of consumer behavior will provide insight into the behavioral segmentation, customer perceptions and benefits, and why the intended target market would select Deere’s JD750 over Caterpillar’s D-5 sized machines. This section will highlight a few of the details as it relates to Deere and the Five-Stage Model of the Consumer Buying Process. Deere dominated the smaller tractor market because it understood the wants and needs of the

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.

Buyers. As of 2013 Deere has 34% share of the exports of agricultural equipment. Buyers tend to go with a known brand name. Deere has been around 1837 and have been known for their excellent quality farm equipment. Since the buyers are a small group of farmers, government and big corporations, the buyers cannot influence the prices of the equipment. Deere is known for not repossessing farm equipment when there is a down turn, like the depression. This does instill the brand into the buyers. They established operations in strategic countries to keep the prices down and have product ready when it is needed.

Approximately 1,600 plows were made in the year of 1850 (John Deere). John Deere also started making many different tools to help improve the steel plow for farmers. With the changing of technology in the farming industry there is an abundance different tools to help farmers. “Since 1837, John Deere has delivered innovative products of superior quality built on a tradition of integrity,” says the John Deere

The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms.

Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.

Threat to new entrants: There is no barrier to entry in this industry but it might be difficult for newcomers to compete against existing well establishing companies.

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

Q1. How did the competitive environment change for John Deere Company between the 1970 and 1980?

The company’s goal is to provide more than just a product. Deere “is committed to those linked to the land” as company strategy says. It enjoys high customer loyalty thanks to a superior customer service and maintains a

Barriers to entry- there can either be high barriers to entry which makes the market unattractive and hard for new entrants or there can be low barriers to enter which make it easy for new entrants in the market.