MANA 5336 - Deere & Company: Strategic Management Case Analysis

This case study analyzes Deere & Company's strategic management, focusing on its competitive position within the agricultural and forestry equipment industries. It examines the company's performance, including its financial results and market share, and applies Porter's five forces framework. The analysis explores Deere's business strategy choices, assessing how they have strengthened or weakened its competitive position. The study also delves into Deere's international strategy, particularly its global expansion and its approach to emerging markets. Furthermore, it evaluates the effectiveness of Deere's business strategy, examining its financial performance and competitive advantages. Finally, the case study offers recommendations for Deere's management, addressing change management, asset management, and operational efficiency, with a focus on inventory optimization and strategic acquisitions. The study references relevant academic sources to support its findings and recommendations.

Running Head: MANAGEMENT
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Strategic management
7/24/2019

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Contents
Q1. Five forces analysis of Deere Company and key driving and success factors................................2
Q2. Deere’s business strategy choices strengthened or weakened its competitive position in the
agricultural industries............................................................................................................................2
Q3. Deere’s increase in scope is a part of its international strategy......................................................3
Q4. Deere’s business strategy producing good results..........................................................................3
Q5. Business strategy recommendations in context to Deere’s management........................................3
References.............................................................................................................................................5

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Q1. Five forces analysis of Deere Company and key driving and success
factors.
Deere & Company has attained a higher market share of 35.4% in the world, amongst all the
agricultural and forestry equipment companies. The production in the industry is centred
amongst the major four companies i.e. Deere & Company, CNH industrial N.V., and AGCO
Corporation. Five forces analysis stated that entry of new entrants is low for the firm, and
Deere & company has the advantages of economies of scale. Moreover, Deere has earned
their buyer power over their rivals on the grounds of high customer loyalty. Another factor
behind this benefit is that the company fixed low prices per unit. Deere & company have
established their own supply channels, and strategy to focus on their customers acts as major
driving forces of the company. Besides, adoption of the new advancements in technology,
product innovation, quality control, and research and development, supplier and dealer
relations were found as the critical success factors of the company. Thus, these form a strong
competitive image of the company leading to growth in future years (Runting 53).
Q2. Deere’s business strategy choices strengthened or weakened its
competitive position in the agricultural industries.
The research stated that Deere aimed at making strategic choices to support the farmers with
their farming equipment, with the thought that rivals ‘should have got John Deere’. In this
way, the company strengthened their competitive position in the market and this approach has
attracted the customers of rival companies towards the products of Deere. The company
produces high quality, most reliable farm equipment, and offers the farmers better services
enables them to outperform other such firms in the industry. Therefore, these aspects state
about the strengthening of the position of the company from the perspective of their strategic
choices. Besides, focus on improvement in technology, competitive pricing, were also major
aspects of choice that strengthen the position (Chai, Yuan).
Moreover, the company ‘s senior management team has taken the decision to choose the
horizontal scope of the firm, by making changes in the organisational structure of the firm

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Q3. Deere’s increase in scope is a part of its international strategy.
From the above analysis of the operations of John Deere it has been found that the scope of
horizontal or vertical expansion has been a part of international strategy. The international
strategy of the company can be best characterised as the global strategy, as it tapped the
markets of many countries. As it has been found through the case study, that the international
markets like Brazil, China, and Russia, accounted for more than 30% of the total revenues of
the firm. The company strived for increasing their global construction customers, for gaining
a share in the market, i.e. from the competitors and achieving higher financial performance
and growth. Thus, the widening of the scope of the multi-domestic or global strategy has
entitled their operations in multiple nations, serving large number of construction customers
and farmers (Lang, Jay, William and Landon).
Q4. Deere’s business strategy producing good results.
The scope of the Deere’s business has been effectively considered a major part of the
international strategy. This determined the fact the company has been positively producing
good financial results, as found in the annual reports. The company has earned an optimum
amount of profits. The results has been demonstrated through the assessment of the case, and
stated that John Deere has achieved a high level of production. Moreover, the company has
earned a great competitive advantage from their competitors in the agricultural equipment
manufacturing sector. These are the factors that determined that the company has been
producing good results and striving for excellence and better performance in the future years
(Mooney).
Q5. Business strategy recommendations in context to Deere’s management.
Some of the vital recommendations that can be given to the case of John Deere is in context
to the change management, or the issues related to resistance to change. Moreover, the
company must divest and acquire some of their assets from the external parties, considered a
part of business strategy. Therefore, these are some of the aspects, and Deere must attain
efficiency in their operations to manage their supply in the organisation. Inventory optimising

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system is another major aspect that the company must make efforts to improve their overall
management (Pickett, Daniel, and Han).
One positive aspect can be determined from the lowering of the dividends and increasing the
earning through the sales growth. A positive aspect is that it will enhance the transparency of
the firm in actual value with more sales. A negative aspect is that it would not be appreciated
by the investors, who seek for higher income through increased dividends (Quinones and
Leon).
Second strategic option can be acquiring the companies, i.e. both domestic and global. It
will increase the use of advanced technology in the business, acting as a pro for the results. A
negative is that the acquired company can become a liability.

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References
Chai, Yuan, et al. "Passing the food and agricultural R&D buck? The United States and
China." Food Policy (2019): 101729.
Lang, Jay, William C. Mayes, and Landon Morris. "Agricultural machine and operator
performance information systems and related methods." U.S. Patent No. 9,152,938. 6 Oct.
2015.
Mooney, Pat. "Blocking the chain: Industrial food chain concentration, big data platforms and
food sovereignty solutions." (2018).
Pickett, Terence Daniel, and Shufeng Han. "Controlling the position of an agricultural
implement coupled to an agricultural vehicle based upon three-dimensional topography data."
U.S. Patent No. 9,615,501. 11 Apr. 2017.
Quinones, Donald, and Anthony Leon. "What are the Factors that Most Impact an
Organization's Effectiveness in Identifying, Developing, and Utilizing Successors for
Leadership Positions?." (2016).
Runting, Rebecca K., et al. "Larger gains from improved management over sparing–sharing
for tropical forests." Nature Sustainability 2.1 (2019): 53.