Analysis of Business Strategy of Deere and Company

Running head: BUSINESS STRATEGY
Business strategy
Name of the student
Name of the University
Authors note

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BUSINESS STRATEGY
Table of Contents
Introduction:....................................................................................................................................2
Discussion:.......................................................................................................................................3
Evaluation of strategy:.....................................................................................................................3
Analysis of liquidity position of Deere and company:....................................................................4
Analysis of profitability position of Deere and company:...............................................................4
Analysis of solvency position of Deere and company:...................................................................5
Analysis of eternal environment:.....................................................................................................6
Description of competitive rivalry:..................................................................................................9
Conclusion:....................................................................................................................................10
References list:...............................................................................................................................10
Introduction:

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BUSINESS STRATEGY
The report is prepared to analysis the overall business strategy of Deere and company.
Performance of strategy of company and evaluation of external environment are done by the
application of Porters five forces and PESTEL analysis. It helps in the identification of the
significant macroeconomic factor that is affecting the business of company. The product line and
farming equipment of Deere and company intends to support the farming of owner of Deere
equipment and the company excelled in a particular financial year. It was because providing
farmers with highest level of customer services and producing the equipment that are most
reliable. The key of business of Deere was to expand globally and enhancement of its
complementary business (Deere.com 2018). In the later part of report, description of competitive
rivalry of organization has also been demonstrated and comparisons between the competitors are
done in terms of financial performance, services and products and their respective positions in
the farming equipment industry.
Discussion:
Evaluation of strategy:
The analysis of financial performance of Deere and company has been evaluating by
using three performance measures of tools of ratio analysis. The three financial measures are
liquidity analysis, profitability analysis and solvency analysis. Liquidity position of company is
analyzed by the computation of current ratio and quick ratio. Profitability position of company is
evaluated by computation of return on equity ratio and return on assets. Solvency position of
Deere and company is evaluated by debt to equity ratio and debt ratio.
2014($) 2013($)
Liquidity measures

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BUSINESS STRATEGY
Current ratio 2.152 2.037
Quick ratio 1.955 1.815
Profitability
measures
Return on equity 0.346 0.345
Return on assets 0.051 0.059
Solvency ratio
Debt to equity ratio 3.406 2.641
Debt ratio 0.852 0.827
Analysis of liquidity position of Deere and company:
Current ratio of Deere and company has increased to 2.15 in year 2014 compared 2.03 in
year 2013 respectively. The reduced figure is indicative of the fact that ability of company for
meeting their short-term obligations have increased and the reason is attributable to increased
amount of current assets and reduced amount of current liabilities. Now, looking t the figures of
quick ratio, the figures have increased from 1.81 in year 2013 to 1.955 in year 2014 respectively.
Increase in value of quick ratio is not favorable as it is indicative that business environment in
which company is operating is not certain. It also depicts that cash flow generation of company
is not stable. Therefore, the liquidity position of company has improved in one aspect while it is
no so favorable in aspect of quick ratio analysis.