Executive Summary
John Deere is an iconic one hundred and seventy-seven year old company and maker of agricultural machinery headquartered in Moline, Illinois. What started as a small business operation has sprung into a multibillion-dollar global operation. In 2013 alone, the company boasted sales of $37.80 billion. Founded in 1837 by a blacksmith, the company originally only built plows, and did not assemble their first tractor until they purchased a small tractor company, Waterloo Boy, in 1918. Now the green and yellow machinery is recognized around the world.
Although agricultural equipment is still the main revenue generator for John Deere, they are also a major producer of forestry, construction, commercial and
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The collapse in the housing market and a global recession dramatically reduced demand for construction equipment. The current global economic state is slowly progressing, which is a positive indicator for the industry. Increasing farm income over the next five years will most likely boost demand for agricultural and turf machinery, but farmers will probably remain cautious with their purchasing decisions. Therefore, domestic sales will continue to be static. However, increasing demand in South America, China, India, and other global emerging markets is expected to significantly boost international sales of all product lines over the next few years as population and income growth in these emerging markets will drive this trend.
In an effort to analyze the company’s place within the industry and to identify John Deere’s organizational strengths and weaknesses, as well as opportunities and threats in the industry, we’ve analyzed the company with two tools, the SWOT and the C5 analysis.
SWOT Analysis:
This section presents a detailed analysis of the company’s strengths, weaknesses, opportunities, and threats that affect John Deeres operation within the industry.
Strengths:
Strong relationship with dealers and customers:
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
According to Ultimate John Deere By Ralph W. Sanders (), John Deere was as considered by many more of an adapter of technology an imaginative marketer rather than an innovator. He was a keen on seeing value in new ideas and adapted them to his products so that they could better serve his customers4. In addition his desire for quality transposed to become the family tradition transforming the on-man plough making shop to the largest farm equipments making company in the world.
John Deere has seen many changes since its founding in 1837. It began with a polished piece of steel that became a plow, and from that humble beginning an agricultural powerhouse was formed. John Deere has created many tractors and farming instruments that have made farmers lives easier. John Deere has delivered superior products to the world of agriculture. Agriculture has improved immensely due to product technology and innovation. (expand)
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
One of the five oldest companies in the United States, Deere and Company is the world's largest manufacturer of agricultural equipment and a major U.S. producer of construction, forestry, and lawn equipment. The
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.
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.
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.
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.
On his talk show Paul Harvey had one famous speech “So God made a Farmer.” In the speech he describes a farmer as firm but caring, He says, “. . . It had to be somebody who’d plow deep and straight and not cut corners; somebody to seed, weed, feed, breed and rake and disc and plow…So God made a Farmer.” John Deere has helped farmers accomplished many of those things he listed seeding, weeding, and plowing. Plowing might be last on the list for Paul Harvey, but it is the first accomplishment of John Deere which turned into to a big and outstanding company. John Deere created the first steel plow in a little blacksmith shop in Illinois.
John Deere was born in Rutland, Vermont, on February 7, 1804. He was born to William Rinold Deere and Sarah Yates Deere. John had three brothers, Charles Francis, Francis Albert, and another that died as a baby. He also had six sisters, Jeanette, Ellen Sarah, Alice Marie, Frances Alma, Emma Charlotte, and Mary Frances. In 1805, the family of twelve moved to Middlebury, Vermont. Three years later, William, John's father, boarded a boat for England. He hoped to come back to America as a wealthy man. After he left, he was never heard from again and was assumed to be lost at sea. John and his 8 living siblings were raised by a single mother on a small income. His education was probably not the best and was limited to the public schools
SWOT Analysis: A tool for examining a company and its environment. Defines the company’s strengths, weaknesses, opportunities, and threats
John Deere was born in Rutland, Vermont on February 7, 1804. When John was 17 he apprenticed himself to a black smith for 4 years. After that he immediately went into the blacksmithing business. John borrowed money to build his own blacksmith shop. Tragically, his shop was destroyed by fire not only once, but two times. John could not pay off his debt and facing bankruptcy, he made the decision to head west where he could find work, and be able to pay off his debt (Nortrax).
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
The abbreviation, SWOT, stands for strength, weakness, opportunities, and threats respectively. In this paper, I will utilize and explain how the SWOT analysis will apply to an organization identified as Athlete’s Warehouse. This paper will identify three examples of SWOT that are evident for Athlete’s Warehouse and aid in forming an overall conclusion of the department using both internal and external analysis tools.
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.