Case Analysis Massey Ferguson 1980
Case Analysis Massey Ferguson 1980:
Massey Ferguson Limited an International producer of Farm machinery and diesel engine started its operations way back in 1847 and by the end of 19 th century they had operations throughout 31 countries of the world. In 1978 Company had financial loss of US. $262.2 million .
Massey’s Strategies: 1) Product-Market Strategy:
Massey’s product line consisted of tractors, combine harvesters, balers, forage harvesters, agriculture implements, farmstead equipments and other equipment for agricultural use. Industrial line consisted of Industrial tractors, loaders, rough terrain forklifts, skid steer loaders, utility loaders and skidders. In 1980 Massey was holding
17% market share worldwide in tractors.
14% market for combines.
13% in Industry machinery.
History shows that Massey had been strong in Market outside North America and Western Europe. Massey Production facilities were also across the different region of the world (Exhibit 5). Largest facilities were located in Canada, France, England, and Australia. In less developed countries like Pakistan, Peru, Egypt, Iran, Libya, Turkey, Saudi Arabia, Sri Lanka, Sudan and Mozambique Massey was quite successful in carrying out the contracts and operations. It is quite obvious as Massey got $360 million contract to update Peru’s tractor and diesel engine industry. In 1980 Massey purchased diesel engines from Perkins Engine Group which was the producer of diesel engines in England. 50% of Perkins’s diesel engine export worldwide was to Massey’s subsidiaries and affiliates. Because of rising gasoline prices there was huge shift to diesel engines, so it was bringing in an effective market to Massey as well
2) Financial Strategy:
During 1960’s and 70’s Massey was aggressively involved in expanding its operations and building up new assets which was majorly financed by Debts that of short term nature .By 1978 Massey’s Debt/Equity ratio= 214% (Exhibit 4)
Same year Massey lost US. $ 262.2
Massey Ferguson Limited an International producer of Farm machinery and diesel engine started its operations way back in 1847 and by the end of 19 th century they had operations throughout 31 countries of the world. In 1978 Company had financial loss of US. $262.2 million .
Massey’s Strategies: 1) Product-Market Strategy:
Massey’s product line consisted of tractors, combine harvesters, balers, forage harvesters, agriculture implements, farmstead equipments and other equipment for agricultural use. Industrial line consisted of Industrial tractors, loaders, rough terrain forklifts, skid steer loaders, utility loaders and skidders. In 1980 Massey was holding
17% market share worldwide in tractors.
14% market for combines.
13% in Industry machinery.
History shows that Massey had been strong in Market outside North America and Western Europe. Massey Production facilities were also across the different region of the world (Exhibit 5). Largest facilities were located in Canada, France, England, and Australia. In less developed countries like Pakistan, Peru, Egypt, Iran, Libya, Turkey, Saudi Arabia, Sri Lanka, Sudan and Mozambique Massey was quite successful in carrying out the contracts and operations. It is quite obvious as Massey got $360 million contract to update Peru’s tractor and diesel engine industry. In 1980 Massey purchased diesel engines from Perkins Engine Group which was the producer of diesel engines in England. 50% of Perkins’s diesel engine export worldwide was to Massey’s subsidiaries and affiliates. Because of rising gasoline prices there was huge shift to diesel engines, so it was bringing in an effective market to Massey as well
2) Financial Strategy:
During 1960’s and 70’s Massey was aggressively involved in expanding its operations and building up new assets which was majorly financed by Debts that of short term nature .By 1978 Massey’s Debt/Equity ratio= 214% (Exhibit 4)
Same year Massey lost US. $ 262.2