In 2014, with its world headquarters in Moline, Illinois, Deere & Company (Deere

Question

In 2014, with its world headquarters in Moline, Illinois, Deere & Company (Deere) remained the largest agricultural equipment and machinery manufacturer in the world, with operations in more than 26 countries. Despite a slowdown in the global construction industry, Deere had its best-ever year in fiscal 2013 with record net income for the third consecutive year. The company’s sales and earnings of $37.8 billion and $3.54 billion, respectively, resulted from the success of its global strategy keyed to product innovation and quality, operating excellence, cost reduction, and best-in-industry customer service. The company built or acquired new plant capacity in Brazil, Germany, and China in 2013 and planned seven new factories in international markets in 2014.

How have Deere’s business strategy choices strengthened or weakened its competitive position in the agricultural and construction equipment industry?

Is Deere’s international strategy best characterized as a multi-country, global or hybrid? Please explain.

Explanation / Answer

Answer 1:-

Deere & Company set a goal to achieve $50 billion in sales by 2018 and 12 percent profit margin by 2014. These seem to be lofty goals for this organization. The key for Deere was to expand business globally and improve its complementary businesses. Deere also understood the importance of delivering value, understanding customers, and offering a world class distribution center.

Deere also sought to increase its customer base across the key regions (U.S., Canada, EU, Brazil, Russia, China, and India). The company was achieving this goal with little resistance as Deere was ranked number two in market share in its industry. The leaders at Deere realized they could improve the market share in North America as well. The choices the company has made has strengthened its competitive advantage.

I think the company chose to increase the horizontal scope of the firm. The company is seeking to grow and is attempting to enhance its presence in newer markets.

Answer 2:- Yes, Deere’s increase in scope has been part of its international strategy. The company understood that many international markets specifically China and India were seeking reliable agricultural equipment. The company also understood the importance of remaining competitively priced in these markets will help them achieve a successful strategy. The company utilizes a global strategy. The equipment is manufactured in several companies and shipped to the different markets. For example, construction equipment is manufactured in China and Brazil but can be shipped globally to meet the customer’s requirement.

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