executive Summary-John Deere

Topics: Agriculture, Agricultural machinery, Engineering vehicles Pages: 17 (3676 words) Published: September 29, 2014


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 residential lawn equipment. John Deere has clearly done its homework on how to expand into new industries and stay ahead of its competition. Nevertheless, with so many changing factors in the world, such as new technologies and greater global competition in the industry, what long-term strategies should John Deere leverage to stay ahead? It is important for the company to dedicate resources to determine what ground breaking evolutions within the industry will keep them most competitive. As underdeveloped countries continue to improve their quality of life, there will be a growing demand to cater to emerging economies as their agricultural industry becomes more industrialized and automated. A major focus of John Deere’s future strategies to expand its global footprint should include building manufacturing centers, expanding brand recognition, and developing human capital.

Company Description
Deere and Company, or better known as John Deere, is one of the world’s largest agricultural and construction equipment manufacturers, but the company is most widely recognized for its tractors. In 2013, John Deere ranked 86th in the American Fortune 500 and 308th in the Global Fortune 500 ranking. In 2011, John Deere earned a place on 24/7 Wall St.’s list of America’s 10 classic corporate icons for its famous leaping deer logo and continually illustrating the company’s motto: “Nothing runs like a Deere.”1 According to the company’s website, “175 years after John Deere created his steel plow, the company has expanded its offerings to advanced products and services for those whose work is “linked to the land”, including a few very modern variations on John Deere's original plow.”2 John Deere has over 67,000 employees and manufactures equipment in fifteen countries.3 John Deere has operations that are categorized into three segments which include (1), agriculture and turf; (2) construction and forestry; and (3) financial services. The agriculture and turf segment manufactures agriculture service products such as large utility tractors, harvesters, loaders, balers, mowers, and tillage equipment. Included in this sector of the company, John Deere also manufactures residential lawn care products such as riding lawn equipment, walk-behind mowers, and golf course equipment. The construction and forestry segment manufactures and distributes a diverse number of construction machines and service parts, including excavators, dump trucks, crawler dozers, log loaders, and other earthmoving and timber harvesting machinery.4 John Deere also provides financing services to its customers for sales and leases on new and used machinery and equipment. For fiscal year 2014, John Deere expected approximately $600 million in net income from its financial services operations.5

Industry Analysis
The current condition of the world economy has a great impact on all industries. Prior to the great recession of 2008, the construction and agriculture industries were performing strongly. Booming conditions in the construction sector and strong demand for construction machinery created solid growth in revenue and profitability within the industry as a whole. However, since the financial crisis erupted in 2008,...
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