Case Analysis of Deere and Company
Case Analysis of Deere and Company
Deere & Company, founded in 1837, is a word leading manufacturer, distributor, and financier of equipment for agriculture, construction, forestry, and commercial and consumer applications, today does business in more than 160 countries, manufactures products in 10 countries and employs more than 34,000 people worldwide. Deere & Company or also known as John Deere has been the free world’s largest producer of agricultural equipment since 1963, and is a leading producer of construction and forestry equipment. The company markets North America’s broadest line of lawn and grounds care equipment, and is a major producer of diesel engines and parts. Since 1837, John Deere has seen a great many changes in its business, its products, and its services. Change always comes with opportunity.
And Deere has always been ready and willing to embrace it. Yet, through it all, John Deere is still dedicated to those who are linked to the land – farmers and ranchers, landowners, builders. And Deere has never outgrown, nor forgotten, its founder’s original core values: integrity, quality, commitment and innovation. Those values determine the way they work, the quality they offer, and the unsurpassed treatment you get as a customer, investor, and employee. Deere’s objective has consistently been to be the low-cost producer in the markets it serves.
However, it seeks to do so while maintaining an image of quality and customer focus. Its company values are quality, innovation, integrity, and commitment. Because of the company close ties to the agricultural industry, corporate performance in both sales and profits was highly variable over the last several decades due to cycles of low process and oversupplies of many agricultural products. During that period, the company made various adjustments in its product mix and manufacturing processes to enable it to better compete and survive in the global environment.
PROBLEMS OF THE STUDY
The fundamental challenge was to continue to improve their financial performance with an increased focus on growth without sacrificing profitability. Although improving profitability was hard to implement, the approach was well understood – lower cost, reduce assets or increase asset utilization, increase sales, and improve price realization by reducing discounts and similar price cutting programs.
AREAS OF CONSIDERATION
Capabilities and capacities that may be beyond the current skill set of Deere & Company, a more intimate knowledge of potential new customers which may not be the focal point of the current sales/marketing organization.
ALTERNATIVE COURSES OF ACTION
To achieve exceptional operating performance, disciplined growth and do it through high performance aligned team work. Operational performance has been improving through the classic approaches of cost reductions, improved asset utilization and margin enhancing/ value pricing, and metrics and reward systems that enable the organization to reach new levels. Generate more profits. They can also generate new sales because they do not compete with Deere current products (and in many cases are add-ons to current products), and can serve to attract new customers.
Deere & Company can maintain its focus on delivering quality products that customers valued. Financial performance was cyclical and Deere typically earned a competitive return on capital.
Accelerated Innovation Process must implement at Deere to evaluate new product/service initiatives more systematically and quickly. Improving the performance and/or lowering the cost of current product/service offerings to current customers. Maintain high quality products that provide reliable and consistent services/experiences for their customers.