Premium Essay

John Deere Strategic Planning Project

In: Business and Management

Submitted By srwagner202
Words 6417
Pages 26
Executive Summary
John Deere & Company was founded in 1837 by a blacksmith named John Deere who built an empire as a manufacturer of agricultural equipment with his invention of a newly designed plow as stated in the company website (“History”, 2013). Deere is deeply rooted in the agriculture sector which is reflected by their manufacturing of farm equipment and development of efficient farming strategies, logistics, and products. The company has grown to be one of the world’s largest and most recognized manufacturers of agricultural, construction, and forestry equipment.
After a thorough analysis of John Deere’s financial position and marketing strategies, the state of the organization is strong but there is still room for improvement. Key opportunities exist to accelerate future growth through investment in new projects that will create important value for the organization. John Deere must protect the brand’s reputation by addressing potential performance issues in the product line. Global operations are also a critical sector of John Deere’s growth strategy. Opportunities in India, China, and Brazil present the most attractive option for increased production and sale.
The main focus of this strategic plan is to continue to aggressively pursue the global strategy while being very transparent and focusing on building strong business relationships. John Deere & Co. must make their presence, mission, and core values well known in foreign markets. This can be achieved by increasing net profit margin, reinforcing brand image, strengthening dealership presence overseas, and increasing cultural awareness within the company.
The John Deere brand stands for quality, innovation, integrity, and commitment (“Core Values”, 2013). These attributes represent the iconic green and yellow colors that John Deere & Co. have be associated with since the company was…...

Similar Documents

Premium Essay

John Deere & Company

...Deere & Company In 1837, Deere and Company was founded by John Deere. Deere & Company is one of the seven full-line farm equipment manufacturers in the world. During the three-decade, post-World War II boom period, Deere expanded its product line, built new plants, ran plants at capacity, and still was unable to keep up with demand. During this same period, Deere had diversified into off-the-road industrial equipment for use in the construction, forestry, utility, and mining industries. Competitive environment In the 1980’s, the collapse of farmland values and commodity prices led to the worst and most sustained agricultural crisis since the Great Depression. Several factors intensified the crisis; the high dollar reduced US exports and hurt both American farmers and American farm equipment producers. Farmers had been encouraged to go into heavy debt to expand and buy land, consequently when land values and farm prices plummeted, the number of farm foreclosures skyrocketed. Few farmers were in a position to buy new equipment, and resale of repossessed equipment further reduced the market for new equipment. Due to this, Deere adjusted its level of operations downward, cut costs where possible, increased emphasis on pushing decision making downward, and restructured manufacturing processes. Deere wanted its captive component divisions to supply other companies and industries to add production volume. However, nearly all of John Deere Component Works (JDCW) sales were......

Words: 1439 - Pages: 6

Premium Essay

John Deere

...Scott Hedrick March 19, 2012 1. History of John Deere “Deere & Company began when John Deere, born in Rutland, Vermont, USA on February 7, 1804, moved to Grand Detour, Illinois in 1836 in order to escape bankruptcy in Vermont. Already an established blacksmith, Deere opened a 1,378 square feet shop in Grand Detour in 1837 which allowed him to serve as a general repairman in the village, as well as a manufacturer of small tools such as pitchforks and shovels. What was more successful than these small tools was Deere's cast-steel plow, which was pioneered in 1837. Prior to Deere's introduction of the steel plow, most farmers used iron or wooden plows which stuck to the rich Midwestern soil and had to be cleaned very frequently. The smooth sided steel plow solved this problem, and would greatly aid migration into the American Great Plains in the 19th and early 20th century. Deere's production of plows began slowly, but increased greatly when he departed from the traditional business model of making equipment as it was ordered and instead began to manufacture plows before they were ordered and then put them up for sale. This allowed customers to see what they were buying beforehand, and word of the product began to spread quickly. In 1842, Deere entered a business partnership with Leonard Andrus and purchased land for the construction of a new two-story factory along the Rock River in Illinois. This factory produced about 100 plows in 1842 and approximately 400......

Words: 937 - Pages: 4

Free Essay

John Deere and Complex Parts

...2 – John Deere and Complex Parts Inc. Key Facts * Net Sales for John Deere were over $19 billion * Net assets of more than $34 Billion * Complex parts was supplier for more than 10 years * Supplied Deere with a key manufacturing part requiring significant engineering input and testing * Complex Parts supplied all needs to John Deere at the time * Complex parts was interested in increasing sales to John Deere * Achieving Excellence Program (AEP) was a supply management program trying to give the competitive advantage to deliver world class equipment * Strived to develop long lasting relationships * Promoted communication, trust, cooperation, and continuous improvement * Key, Partner, approved , conditional supplier rankings * Complex Parts * Started falling short of requirements of John Deere * Not answering phone calls * Delivery rating was over 150,000 * Target cost not met, reducing projected profits on certain things for Deere * Not following Deere Quality Plan at new Facility * Getting quotes on time seemed to be very difficult Discussion Questions 1. Some of the strengths about the Achieving Excellence Program are that they strived to develop long lasting relationships with their suppliers. They provided supplier performance summaries at the end of each quarter to show the suppliers how they were doing in their part of supply John Deere, and they also had John......

Words: 695 - Pages: 3

Free Essay

John Deere

...John Deere HistoryEveryone has most likely seen the unmistakable logo and colors of a John Deere tractor, but few understand anything beyond the trademark green and yellow colors. The John Deereactually got its start when a man named John Deere built a plow that made farming easier andless of a task for farmers in 1837. After the plow, the company started to grow and has continuedto do so ever since. In order to fully understand the success of the John Deere Company oneneeds to know more about the company founder, the products of the company, and it business practices that allow it to thrive in the face of many competitors. There might be many reasons for the success of John Deere, but in order to truly understand one has to look at the company beginnings.According to John Deere’s website, John was born in Rutland, Vermont, on February 7,1804, and raised in the nearby town of Middlebury. At the age of four Johns father was lost at seawhich left John’s mother, Sarah Deere, to raise John and his five brothers and sisters by herself.John didn’t have much growing up and he received the simplest education available. Inhis early teens, John took a job with a tanner where he ground bark for a very small amount of money, a pair of shoes, and clothes. In 1847 John Deere promised, "I will never put my name on a product that does not have in it the best that I have in me." For more that 157 years John Deere has remained true to that commitment -- building their reputation......

Words: 901 - Pages: 4

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

John Deere Case Study

...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......

Words: 5721 - Pages: 23

Premium Essay

John Deere

...John Deere John Deere began in 1836 as a repair shop and manufacturer of small tools. In 2012 it was ranked 97th in the Fortune 500. John Deere is one of the largest manufactures of agriculture machinery in the world. They have also become a leading manufacturer of heavy equipment. John Deere has a main slogan of “Nothing runs like a Deere” The fiscal year for John Deere ends on October 31st. Over the past few years one of the main goals for the company is future growth. The plan was to open seven new factories in their key markets. As of the end of 2013 all 7 had been completed and is set for higher production numbers in 2014. I believe that this will change their financial position for their year-end 2014. While today’s economic outlook may be discouraging, John Deere is committed to continuing growth and providing solid and reliable products. Inventories owned by Deere & Co and its US equipment subsidiaries are valued at cost on the LIFO basis. The property and depreciation are based on weighted averages in useful lives for years. Deere & Company had some growth in 2013 compared to 2012. There were not any real significant differences in the financials from 2012 to 2013. The largest increase was in the debt/equity ratio. I believe this can be explained because of the construction of the new facilities. Production was complete by the year 2013 and most of the major production and expenses had come in the previous years. I would invest in Deere in......

Words: 285 - Pages: 2

Free Essay

John Deere

...Russ Britton Mrs. Watters English 400 9/8/14 John Deere and the Company John Deere was born in Rutland, Vermont, on February 7, 1804. He was raised by his mother basically his whole life. Growing up, he wanted to be a blacksmith. He fulfilled his dream at age 17 as a blacksmith’s apprentice. A few years later, he was doing it on his own. His next twelve years were very busy after that. In 1837, Deere moved west to Grand Detour, Illinois. As he was there he opened up his own blacksmith shop. As a blacksmith, he experienced working on other plows that had been created for farming. John quickly realized that these plows needed to be remade. Here he began to start creating his own plows and he sold three plows by 1838. He had produced ten more plows by the next year. and even forty more by 1840. The demand for these plows were high, therefore he partnered up with Leonard Andrus to produce even more. In 1846, they sold close to one thousand plows that year. A few years later, Deere noticed that Grand Detour wasn’t good enough for him. As a result, he packed up and moved to Moline, Illinois. Moline is located by the Mississippi River, which gave him access to even more opportunities. He was able to offer cheap transportation and water power. John started to get british steel because it is sturdy. That immediately sped up his operation. His company made around 1,600 plows in the year of 1850. In 1858, he transferred his leadership of the company to his son, Charles, who was......

Words: 629 - Pages: 3

Free Essay

John Deere

...John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid steer. John deere is trying to expand on its business idea. Scott is fed up with it and needs our help. He is working on the new skid......

Words: 309 - Pages: 2

Premium Essay

Deere John Supplier Development

...Supplier Development at Deere & Company By Gil Lopez An assignment submitted in partial fulfillment of the requirement for MGT 608 School of Business and Management National University Dr. Farnaz Sharifrazi December 1, 2013 Background Deere & Company, also known as John Deere, is a leading provider of agricultural equipment with offices, manufacturing facilities, and suppliers in over 160 countries (Company Background, 2001). In order to stay competitive and remain a leader in its industry, Deere & Company has entered into partnerships with its suppliers in an effort to reduce the suppliers’ manufacturing cycle time and help cut manufacturing costs, which would in turn benefit Deere as well. Through supplier development group (SDG) project teams, Deere and Excelsior, the main supplier of tractor attachments, worked together in order to formulate solutions to achieve such goals. Is Deere’s Tactic an appropriate one? Forcing a supplier to change their processes, invest millions of dollars for the implementation of such changes, and reduce their prices does not seem like an appropriate tactic or a good business practice. Although this tactic may work for major retail corporations such as Walmart, effective supply chain management relies on high levels of trust, cooperation, collaboration and honest, accurate communications, all of which is missing from the deal that Deere is trying to obtain (Wisner, Tan & Leong, 2012). By trying to......

Words: 956 - Pages: 4

Premium Essay

John Deere and Complex Parts, Inc.

...Assignment # 3 Case 5 John Deere and Complex Parts, Inc. Summary Deere & Company was formed in 1837, with its headquarters set up in Moline, Illinois and were considered as a pioneer in manufacturing farm and forestry equipment, construction, commercial and consumer equipment. Their broad range of products and services included equipment financing, power systems, special technologies. In 2006, supplier evaluation team members of Deere Inc. Moline unit were united to discuss the performance of Complex Parts. For the past 10 years, Complex Parts, Inc. had been playing a key role in Deere’s sales with an annual approximation of U.S. $3.5 million. Their contribution to Deere Inc. included supplying them a key manufactured part, which required significant engineering input and testing. Even though other suppliers could produce this part, Complex parts Inc. took charge of it by actively involving with Deere Inc.’s sales engineers weekly, associating with their cost reduction strategies. And keeping up the Deere Inc.’s design changes and globalizing their quality plan. But during the past year, Complex Parts had provided questionable service to the Moline unit and now the unit manager John has been analyzing whether to continue business with Complex Parts, Inc. or to source it from a new supplier. Deere Inc. had a dynamic supply management strategy in place, known as Achieving Excellence Program (AEP). The program was about giving Deere and its suppliers the......

Words: 1498 - Pages: 6

Premium Essay

John Deere

...In the John Deere case Scott Nolan has faced a challenge when he accepted the job. His supervisor has requested him to identify and justify which suppliers to integrate in the product development phase, and specify how to construct the interactions with the chosen suppliers. The target of Scott Nolan is to have the new plant up and running smoothly by the target date of July 1998. The market was growing about 15-20% per year and was projected to reach $1.2 billion, or 60,000 units by year 2000-2001. In 1995-1996, John Deere had been outsourcing their manufacturing to Holland, although New Holland produced their own competing skid loaders. New Holland had agreed to sell only the excess capacity to manufacture the same product. Since the market demand was increasing John Deere needed to make more Skid Loaders, although New Holland refused to do so, in return, John Deere had decided to design and manufacture their own skid loaders directly, and become the leading manufacture of Skid Loaders. A solution for John Deere to manufacture directly is to build a new building in Knoxville, TN. In April of 1996 JD in invested in a $35 million site to directly design and manufacture the Skid Loader. By taking back the manufacturing and design of the skid loader, John Deere can really take control of their costs and profits. Since New Holland was a main competitor, John Deere can now differentiate their product from others in the market. John will be able to make their design......

Words: 335 - Pages: 2

Premium Essay

John Deere

...Business Analysis on Deere & Company McKenzie R. Mayfield Tarleton State University Dr. Nathan Heller October 31, 2015 Author Note I attest that this document is an original creation submitted in accordance with the requirement for the Comprehensive Written Project (CWP) in Seminar in Business Strategy (GB-5388) during the Fall 2015 academic term. Abstract This document provides an in depth company analysis of Deere & Company (DE). In the first segment of the analysis, an overview of John Deere’s history, product and service offerings, corporate strategy, and a synopsis of the heavy equipment production industry will be evaluated. The second segment includes a financial overview and analysis of the three most recent years at Deere & Company. In order to do so, balance sheets, income statements, and key financial ratios will be collected and evaluated. In the third segment, this paper will examine the heavy equipment market, current industry averages, economic climate, and financial and strategic statuses of competing businesses. After the analysis is complete, a SWOT analysis (strengths, weaknesses, opportunities, and threats) will be conducted in order to identify key success factors and driving forces. Based on the results of the SWOT analysis, the final segment of this document will make recommendations about the strategic actions that Deere & Company should take in the future. Keywords: [Click here to add keywords.] Comprehensive Business Analysis on Deere &......

Words: 2180 - Pages: 9

Premium Essay

Financial Analysis of John Deere

...Assignment 1: Financial Analysis of John Deere David Schwendinger Strayer University Financial Accounting for Managers Acc 556 Dr. James Turkvant May 11, 2015 Assignment 1: Financial Analysis of John Deere In this paper I will provide analysis of the annual report provided by the company. I will specifically looking at this report from an investor’s prospective, attempting to ascertain whether John Deere is managing its finances in manner that will draw investors. Other, non-financial, aspects of John Deere will also be considered that could be used as decision points for potential backers. This will also be considered in the larger context of the construction and farm machinery industry and some of John Deere’s competitors. The first aspect of John Deere to be considered is its liquidity. The company has just over $45 Billion dollars in current assets and a little more than $20 Billion dollars in current liabilities. (Deere & Company, 2014, p. 32) This leaves John Deere with working capitol just shy of $25 Billion dollars and a current ratio of 2.2. It is very liquid could easily meet its current obligations. The industry average is only 1.7. ("JD Financials Summary," 2015, Financial Strength 2) I would expect that the company would have no trouble getting additional financing should it require it. The key thing that someone is interested in when considering a company for an investment is whether it is profitable or not. John Deere’s return on assets......

Words: 1091 - Pages: 5

Free Essay

John Deere 2010 Analysis

...Integrated Company Analysis John Deere Group A9 Eric Dolan Adam Plunkett Nina Rozell Tom Schar Kan Zuo Agenda • Company Profile – Financial Overview • Recommendations • Conclusions COMPANY PROFILE: FINANCIAL OVERVIEW Overview of Financial Situation 2009 Performance Revenue down 18.7% Gross profit down 21% Earnings per share down 56% 2010 Projections Ag. sector growth of 14% Const. & For. segment to grow in double digits over the next 3 years Overall 2010 revenue down just 0.5% COMPANY PROFILE: FINANCIAL OVERVIEW 2009 Net Sales By Product Category Ag. & Turf Divisions Other 11% Turf 9% Small Ag. 35% Large Ag. 45% John Deere. (2009, November 25). 8-K. Retrieved from http://www.capitaliq.com COMPANY PROFILE: FINANCIAL OVERVIEW Business Cycle $1,000 Net Income by Quarter (millions) Q1 Q2 Q3 Q4 $745 $604 $500 $257 $128 $$142 $477 $624 $764 $472 2001 $(500) 2002 2003 2004 2005 2006 2007 2008 2009 Accounts Receivable by Quarter (millions) Q1 Q2 Q3 Q4 $5,000 $4,422 $4,089 $4,000 $3,561 $3,747 $3,964 $4,426 $4,424 $4,675 $4,425 $3,000 $2,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 COMPANY PROFILE: FINANCIAL OVERVIEW Valuation • Discounted Cash Flow – Projected revenue growth for business segments – Net Present Value of John Deere stock: $51.18 – $53.22 • John Deere’s 12/11/09 market close: $52.44 • Stock Repurchase Program Recommendation: Monitor price for......

Words: 1364 - Pages: 6