Deere and Company: Industrial Equipment Operations

Deere and Company was faced with many issues in the years to come. They were entering a market, which was dominated by Caterpillar and needed to price their products to ensure success. The competitive landscape of the industry includes seven competitors, Deere’s biggest competition being Caterpillar. The small (under 100 horse power) and large (over 100 horse power) tractor markets have different leaders. Deere and Company dominated the small tractor market with 50-60% market share, with International Harvester ranking second with only 10% market share. Case ranked third in the small tractor market, having the strongest competitive position. Caterpillar ranked fourth in the small tractor market although they had focused more towards the larger tractor market and was not very successful in the small tractor market. Caterpillar dominated the large tractor market with 50-60% market share and above all competitors in their parts division. The second ranking competitor was International Harvester followed by Case, Fiat-Allis, Komatsu and Terex of GM. Komatsu was seen as an inferior product, as it copied Caterpillar and offered large tractors at a lower price with firm list prices. Terex was testing a hydrostatic transmission but was seen as highly innovative but had little impact on the market.
Deere wanted to enter the large tractor market, which was dominated by Caterpillar. Caterpillar held over half the market share in this industry and had the D-5, D-6, D-7, D-8, and D-9 and was looking into creating an even larger D-10 in the industry. The D-7, D-8 and D-9 had been reengineered in 1976 but the D-4, D-5, and D-6 had not been reengineered. The D-6 would be the largest tractor that could accommodate a hydrostatic transmission. Caterpillar had an extensive distribution network, but Deere & Company saw theirs as comparable. Caterpillar had a well-known, reliable product but had older technologies than Deere and Company. The comparative products to