Premium Essay

John Deere Case Study

In: Business and Management

Submitted By wvanname12
Words 5721
Pages 23
Case Study of John Deere

Contents OVERVIEW OF JOHN DEERE 3 A. PRODUCTS 3 B. MARKET CONDITIONS 4 C. COMPETITIVE LANDSCAPE 6 II. 2012 FINANCIAL STATEMENT ANALYSIS 7 A. REVIEW OF INCOME STATEMENT AND BALANCE SHEET 7 B. REVIEW OF KEY FINANCIAL RATIOS 11 C. REVIEW OF FINANCING ACTIVITIES 16 D. RECOMMENDATIONS – Business Performance Improvement 19 E. RECOMMENDATIONS – Buy/Sell/Hold Strategy 20 III. APPENDIX 21 IV. EXHIBIT 2 - ACCOUNTING POLICIES 22 V. Bibliography 24 VI. DEERE & COMPANY – 2012 10K financial statements 25 A. CONSOLIDATED INCOME STATEMENT 25 B. CONSOLIDATED BALANCE SHEET 26 C. CONSOLIDATED STATEMENT OF CASH FLOWS 27

*

OVERVIEW OF JOHN DEERE
PRODUCTS
John Deere & Company is a publicly traded company headquartered in Moline, IL. The company’s roots trace back into the 1800’s when John Deere began with an idea to assist farmers and would forever change the agricultural industry. Today with over 66,000 employees and a corporate family that has nearly 650 companies’ worldwide, Deere ranks number 85 on Forbes list of top 1,000 companies. With over $56 billion in assets and a market value that tops $31 billion, Deere’s financial position is very strong. We will present a detailed analysis of the firm to see how it stacks up against the Caterpillar, the market leader. We will exam key financial ratios and finally give a recommendation on whether the stock is a buy, sell or hold. Deere operates its business in three different segments (agriculture and turf, construction and forestry, and financial services) and total sales revenue top $36 billion. The agriculture and turf segment is involved in the primary manufacture and distribution of a complete line of agriculture and turf equipment as well as parts for these pieces of equipment. The company is expecting the market to increase roughly 4%…...

Similar Documents

Premium Essay

John Deere Case Study

...It is common knowledge that John Deere is one of the largest manufacturers of agricultural equipment. Many people looking from the outside think they have a well-oiled machine, which make superior agricultural products. According to Sprinkle and Williamson (2004), the entire industry took a severe downturn in the 1980's. In reaction to this cycle, Deere presented innovative ways to inspire employees and raise moral. Like many companies, John Deere used a standard hourly compensation for their employees. John Deere decided to install a team-based gain-sharing plan that it believed would encourage more cooperation, innovation, and higher levels of motivation from its employees. (Retrieved 10/12/07) Much like the Good Sport scenario, management needed to find a way to promote teamwork and employee participation. Management reached out to the design group at Good Sport, the development and design teams found ways to use existing processes to manufacture the new product by using existing parts and manufacturing with little additional cost or change to production methods. Because the corporate culture at Good Sport promoted teamwork, solutions developed resolved the issues between departments. In John Deere's case, management realized they had a wealth of knowledge and experience within their front line employees. In many companies, the employees usually hold trade secrets in the production process. The John Deere employees were no different. Management needed a way to open the......

Words: 407 - Pages: 2

Premium Essay

John Deer Case Study

...Operational Management: John Deer Case Study The company that has been chosen for this case study is John Deere Equipments. This company was founded by John Deere in 1837 and was incorporated in 1868 as Deere & Company. John Deere started this company as a one-man blacksmith shop and it is now a worldwide corporation that has its offices in more than 160 countries and employs more than 46,000 people. John Deere is one of the oldest industrial companies in the United States and it is guided by the original values of quality, innovation, integrity, and commitment that John Deere instilled at the beginning. The business strategy of John Deere, in their own words is: “We aspire to distinctively serve customers — those linked to the land — through a great business, a business as great as our products. To achieve this aspiration, our strategy is: Exceptional operating performance, Disciplined SVA growth, Aligned high-performance teamwork Execution of this strategy creates the distinctive John Deere Experience that ultimately propels a great business and, for all with a stake in our success, delivers...Performance That Endures” (1). The company is always striving to give its stakeholders the maximum value for their money by continuous improvement and growth in all sectors of the company. The company is organized into four manufacturing divisions: · Agricultural Equipment – products for farms; · Commercial and Consumer Equipment – equipment related to lawn and ground care,......

Words: 2465 - Pages: 10

Premium Essay

Case Study Sample

...Operational Management: John Deer Case Study The company that has been chosen for this case study is John Deere Equipments. This company was founded by John Deere in 1837 and was incorporated in 1868 as Deere & Company. John Deere started this company as a one-man blacksmith shop and it is now a worldwide corporation that has its offices in more than 160 countries and employs more than 46,000 people. John Deere is one of the oldest industrial companies in the United States and it is guided by the original values of quality, innovation, integrity, and commitment that John Deere instilled at the beginning. The business strategy of John Deere, in their own words is: “We aspire to distinctively serve customers — those linked to the land — through a great business, a business as great as our products. To achieve this aspiration, our strategy is: Exceptional operating performance, Disciplined SVA growth, Aligned high-performance teamwork Execution of this strategy creates the distinctive John Deere Experience that ultimately propels a great business and, for all with a stake in our success, delivers...Performance That Endures” (1). The company is always striving to give its stakeholders the maximum value for their money by continuous improvement and growth in all sectors of the company. The company is organized into four manufacturing divisions: · Agricultural Equipment – products for farms; · Commercial and Consumer Equipment – equipment related to lawn and ground care,......

Words: 2455 - Pages: 10

Premium Essay

Boxer

...DSCI 434-53 Chapter 3 Case Study – John Deere The product development process should be how John Deere’s vision becomes reality. Not only this, but it should be how societies needs are ordered and provided through innovated design and engineering. The case study for Deere and Company, Scott is hired as the new supply chain management manager. Upon hire Scott is confronted with many problems. Deere and Company plans to triple its market share by focusing on the product development of the skid-steer machine. The skid-steer machine is supposed to sell more than 60,000 units amounting to $1.2 billion by 2000-2001. Deer and Company wants take back control of the design and manufacturing from New Holland and improve it. Scott and Deere Company face numerous amounts of challenges within this case. The first being that Scott needs to get suppliers involved in the development phase of the product design. The relationship between customers, manufactures and suppliers should be established early in the product development process. This is critical because decisions are made not only for the functionality of the product but also for the customer. The impact would be a significant loss of revenue and sales because the product wasn’t designed up to the consumer’s standards. The idea to implement supplier integration this phase for the skid-steer machine is to make a new business model to stay competitive in the increasing global competition. I think Scott should look for suppliers who...

Words: 442 - Pages: 2

Free Essay

John Deer Case Study

...Mohamud Hassan DSC434 John Deere case study Due date 11/11/14 Early Supplier Integration in the Design of the Skid-Steer Loader Scott has been offered a new position as supply management manager for a new Deere & Company manufacturing facility of designed product skid-steer loader. As part of his new job, he must make a proposal to identify specific suppliers to integrate into skid-steer loader development process and specific ways to effectively integrate these suppliers in order to meet aggressive target costs. Scott faced many problems during his time at Deer and Company. For example, Scott is required to produce a proposal that outlines how the company is going to manage the early supplier integration into the design and manufacturing of the new Deere Skid-steer loader. On the other hand, suppliers will have to be integrated based upon strict selection guidelines that will prove to be critical in improving the new Deere skid-steer loader. Some of the issues or problems the company was facing. 1.) One of the problems that company facing is Skid-steer loader from Deere & Company lacks of market. Deere &Company did not design, engineering and manufacturing the skid-steer loader itself, on the opposite, they put it in the hand of a third party. They had contracted the engineering and manufacturing to new competitiveness and no significant benefits over competing Holland, which is also sell same product, competing in the same market product and...

Words: 1238 - Pages: 5

Premium Essay

Baba

...John Deere Component Works Gears And Special Products Division : Application of ABC information From ABC study on Turning Operations Team 4 Consultants 5/20/2011 Paul Cusack Brian Goh Robert Fletcher Lynn Chen Shayne Dube 2 1.0 Executive Summary Gears and Special Products Division is one of three divisions under John Deere Component Works. The division has been conducting a study on replacing their current traditional cost system with an activity based costing system. The study, which is centered around turning machine operations, indicates that implementing the ABC system across JDCW will allow operations to run more smoothly and efficiently. However implementing the ABC system alone will not yield the full benefit from the system. Management in the GSP division must utilize the data to make decisions that will result in cost reductions and better product pricing. Therefore we recommend for GSP management to utilize the data from ABC to : 1) Implement layout changes to enjoy cost reductions through activity elimination 2) Improved process planning and cell arrangements to enjoy cost reductions through efficiency 3) Analyze product mix for efficient manufacturing Additionally, we recommend GSP to utilize ABC data to prepare more accurate and competitive bid prices and to extend the ABC system to other operations and to the Hydraulics and Drive Train Divisions. 3 Contents 1.0 Executive Summary 2 2.0 Introduction 4 3.0 Layout Changes 5 3.1 Process......

Words: 2026 - Pages: 9

Premium Essay

Research on Contemporary Od Practitioner Tools

...addressing the needs of dynamic change within newer organizations. The organizational development contemporary change methodology is often considered a best choice when an organizations culture is founded in present-day contemporary beliefs. The basis of such beliefs includes the perspective of an ever challenging environment of increased globalization, rapidly changing technologies, economic pressures, and increasing expectations in today’s modern-day workforce. Within the context of this contemporary change methodology, many OD consultants choose between two models based on the principles of either Appreciative Inquiry or the World Café. These contemporary models have been successfully implemented in many different organizational cases studies. The first of the two OD contemporary change based models is formed on the principles by The World Café organization. The World Café organizational development system is based on seven (7) design principles: (1) Set the context, (2) Create hospitable space, (3) Explore questions that matter, (4) Encourage Questions that Matter, (5) Connect diverse perspectives, (6) Listen together for patterns & insight, and (7) Share collective discoveries. These design principles are a specifically selected and integrated set of ideas and practices that form the basis of The World Café organization’s change process. According to a book written about the organization by The World Café founders and organizers, The World Café process......

Words: 2200 - Pages: 9

Premium Essay

Jdcw Hbr Case Study

...John Deere Component Works (A) A.1. How did the competitive environment change for the John Deere Component Works between the 1970's and the 1980's? What information must management accounting systems provide to support effective decision-making in these different environments? The change in the competitive environment greatly influenced JDCW. The early 70s were the end of the post WWII boom period, during which time JDCW was expanding its operations and operating many of its manufacturing plants at capacity. However, there were multiple economic factors in the early 80s that negatively affected the demand for JDCW products. The effect of these economic factors is evidenced in the case study by the fact that during the 1970s JDCW’s operations and equipment had been arranged to support tractor production of 150 units per day and by the mid-1980s, JDCW was producing parts for less than half of that number. One of the reasons for this negative demand shock was the collapse of farmland values and commodity prices. This left farmers with little capital through which they could purchase farming equipment. The collapse of land values had two effects. First, it caused the demand for JDCW equipment to shrink because farmers were no longer aggressively expanding. Secondly, the foreclosure of farms led to an increased supply of repossessed equipment that further reduced the market demand for JDCW’s new equipment. Additionally during this time, the high dollar value reduced...

Words: 1604 - Pages: 7

Premium Essay

Main Assignemnt

...facility level. Task 3 - Case Analysis: John Deere Component Works – Activity based costing. EXECUTIVE SUMMARY Conventional costing systems at xxx became outdated due to recent organizational changes and led to distortion of product costs and subsequently erroneous strategic decisions. Activity based costing will provide the company with more accurate product costing and is likely to uncover that, contrary to what the management believes, specialty product lines are less profitable than their high-volume counterparts. A comprehensive ABC system is recommended for the company, as it also helps to manage resources by reducing non-value added activities and reporting the cost of spare capacity. Key factors for successful implementation of ABC are behavioral, financial, technological, and organizational and those relating to the system design features. INTRODUCTION John Deere & Company is a manufacturer and supplier of farm equipment products since 1837. John Deere Component Works (JDCW) was a subdivision of John Deere & Company, which dealt exclusively with the manufacturing of tractor component parts; garden product line and other diversified industrial equipment supplies. Despite manufacturing high quality parts & reliable delivery timeline, their main challenge was to keep up with growth in market demand for their products. However in 1980 demand for farm products fell & due to increase in low-cost suppliers in the market, John Deere had to rethink their cost......

Words: 3466 - Pages: 14

Premium Essay

John Deere Hbr

...A3. Reading through the case study, a few issues caused the cost failure that John Deere Component Works (JDCW) experienced in the 1980s. First, in the 1970s, John Deere spent over $1 Billion in plant modernization, expansion and tooling hoping to meet higher demand levels - profits were rising John Deere began to explore product expansion, which led to the $1 Billion spent on manufacturing plants. Instead, the external factors like falling commodity prices and collapsing farmland values left a demand void - a macro level viewpoint. Internally, JDCW struggled to remain competitive as it produced parts for less than half the tractors it was making in the 1970s. Departments viewed each other as competitors and only looked at price relations rather how well the corporation would act. JDCW failed to keep full costs manageable and outside competition (the $10 JDCW cost against the $7 outside bid example) was able to leverage for a cheaper bid. Parts were made, but too expensive to sell between departments. Also, JDCW was extremely involved and concerned about efficiency (family the parts), but never looked at the individual cost per part. The non-competitive parts used tremendous ACTS hours per hundred parts, which contributed to a high percentage of DL$/Material$ - the huge volume was worthless, because customers were not buying (Exhibit 8). Finally, JDCW’s incentive labor rate of 125% was excessive. The rate hurt the bottomline against the budget allocated to each......

Words: 781 - Pages: 4

Premium Essay

Caterpillar Incorporated Financial Essay

...New York Stock Exchange and closed today at $86.62, about the middle of its 52 week trading range (Market, 2012). Caterpillar’s profit outlook for the remainder of 2012 is very optimistic. Its projects its sales and revenues to be between $68 and $70 billion earning a profit of $9.60/share vice Caterpillar’s earlier forecast of approximately the same revenue range but earning $9.50/share (Caterpillar, Inc., 2012). Caterpillar’s financial performance and impressive billion dollar revenue numbers clearly signify Caterpillar as a domestic and world leader in its industry. Financially it is crushing its competition. Caterpillar’s biggest competitor is the universally known John Deere Company that reported third quarterly earnings of $9.590 billion paying shareholders $1.98 earnings per share (John, 2012). Japan’s Komatsu, LTD. is Caterpillar’s biggest foreign competitor earned nearly $6 billion this quarter paying its shareholders approximately $.50 per share (Komatsu, 2012). Caterpillar, Inc. is a solid, blue chip corporation having a very bright economic and financial future for 5 key reasons: analysis of its key financial statistics reveals a financially strong and stable corporation poised for growth; it is in a position to take advantage of projected U.S. economic growth; it has an exchange rate strategy in place to protect itself financially against currency fluctuations; its merger strategy past and present is aligned with its corporate strategy; and,......

Words: 3556 - Pages: 15

Free Essay

Siwsher

...MARKETING MANAGEMENT BUS506 Case Study Analysis: Swisher Mower and Machine Company Danel Trumić, Mirhat Kolašinac, Misala Pramenković International Burch University, Sarajevo MARKETING PROBLEM DEFINITION In early 1996, Wayne Swisher, president and chief executive officer (CEO) of Swisher Mower and Machine Company (SMC) received a certified letter from a major national retail merchandise chain inquiring about a private brand distribution arrangement for SMC line of riding mowers. Wayne Swisher had only recently assumed his position as president and CEO from Max Swisher, his father and company founder. Wayne Swisher was previously vice president of sales, a position he held for six years following completion of the MBA program at Southern Methodist University in Dallas, Texas. Prior to graduate school he has worked in sales and marketing position for three years at a large Fortune 500 corporation. The private brand distribution proposal was the first major decision that he faced as president and CEO. He thought the inquiry presented an opportunity worth serious consideration, since unit volume sales of the SMC riding mower had plateau in recent years. The inquiry received by SMC concerning a private brand distribution arrangement requested a sample order of 700 standard riding mower units to be delivered in January 1997. The national retail merchandise chain expected to make an annual order of approximately 8200 units. The chain wanted to purchase the mowers at a price 5......

Words: 1508 - Pages: 7

Premium Essay

Work Contracted for the H2O Corporation

...production levels. Federal Express is renown within the industry as the top employee friendly and service orientated when compared to their competitors. In 2000, their turnover rate was estimated to be below six percent when compared to the industry’s average at twenty percent. The Toyota Corporation has found great success in making training and development their top priority. Training and educating their employees by through established values and perspectives. Toyota has developed new learning facilities and course content that develop team members ensuring qualified human resources are conducted in Toyota’s global business markets. Toyota is committed to on the job training that provides every employee with the tools needed to show case their abilities and talents. Training is based on employee qualifications and positions titles. “Toyota-Developing People” was created in 2002 to display Toyota’s competitiveness in human resource development and to promote personnel development organization wide. Five key principles sum up the Toyota employee conduct guidelines: Challenge, Kaizen (improvement), Genchi Genbutsu (go and see), Respect, and Teamwork. |•Key Principles of The Toyota | |Way 2001 | |[pic] | | [pic] The Toyota Institute is an internal human resource development organization that focuses on the organic integration of global Toyota companies in order to share the Toyota Way, promote true globalization, and realize the advancement of Toyota’s core......

Words: 30723 - Pages: 123

Free Essay

Ceo, Mart

...and Bangladesh. He has been Marketing Advisor to Ministry of Rural Development, GoI; Chairman, Khadi Commission national marketing committee and has served on Prime Minister Office and Chief Minister Committees on rural development. He is a World Bank and United Nations consultant; and member of national advisory committees of RBI, NABARD and SIDBI. Creation of jobs/self-employment His efforts have created sustainable livelihoods for nearly 200,000 rural poor • As marketing advisor to the government in 1989 he started Gramshree melas for sale of rural products in urban areas. 300 melas have been held in 75 cities creating sustainable livelihoods for 100,000 rural producers. • He co-created the world famous Project Shakti (case study at Harvard) with Hindustan Unilever to appoint 46,000 poor women from micro finance groups as company dealers. • He brought 10,000 tribal women into a collective marketing model to sell their forest and agri produce to bigger markets thus enhancing their income • He worked with Novartis to set up Arogya Parivar model for treating TB among rural poor using unemployed youth as health entrepreneurs. This successful model has been taken to 5 countries and has won several Global awards. • He has developed the famous 3M (micro finance, micro markets and micro planning) model for creating large scale employment. This model is approved by the World Bank, NABARD, CARE International and DFID, UK. Creation and dissemination of......

Words: 621 - Pages: 3

Premium Essay

Wqeqewqe

...and evaluate others (or be evaluated) through the use of accounting systems. The course will be loosely divided into two topics: cost management systems and managerial control systems. Each topic is briefly described below. Cost Management Systems: The objective of the cost management system is to provide information about the costs of the goods and services sold by the firm. While financial accounting requires that product cost information be accumulated in particular ways for external reporting, the focus in the course will be on cost systems that aid managerial decision-making. We will start with a study of traditional cost systems still in widespread use today. Next, we will examine the problems associated with these systems in today’s business environment. Through the use of readings and cases, we will discuss situations in which the traditional systems provide seriously flawed or excessively costly product cost information. We will then look at systems that have been designed for the special circumstances of firms in different environments. Managerial Control Systems: The second half of the course covers the use of accounting information in the control and coordination of individuals and organizational units. A key difference between the material in the second half and that in the first half of the course is that when we discuss the managerial control system, we will explicitly recognize......

Words: 1335 - Pages: 6