Competitive AnalysisThe market for agricultural equipment is ess.docx

Competitive Analysis
The market for agricultural equipment is essentially an
oligopoly that consists of Deere, CNH, Caterpillar and AGCO.
All these companies have dealer network and operation in
developed and developing countries and there is intense
competition among them for the market share. The key markets
where these rivals are fighting for the market share are India,
China, Brazil, USA, Canada, Russia and European Union. It
appears that on the basis of 2013 sales, Caterpillar is more
susceptible to rising interest rates and or economic slowdown
because most of its sales are in the construction sector ($18
billion out of $57 billion). The industry overall is highly
competitive which provides sustainable growth opportunities to
these four operators because of the low threat of substitute or
new entrants. The intense rivalry will remain in the future
because every company is trying to capture maximum possible
share in the existing few markets.
Corporate Analysis
1. Financial Analysis: Revenues of the Deere and Company
have seen a steady increase from 2011 to 2013, with an average
year over year growth of 8.74%; and moreover, Deere and
Company’s profit margin have been an average of 8.88% of
revenue from year 2011 to 2013, greater than the industry
average of 6.2%. Deere and Company are also more efficient
with cost of goods sold, and operating activities relative to
revenues in comparison to its top four competitors (Exhibit X).
In addition, Deere’s inventory turnover in days of 47.7 days
further illustrates the company’s financial success. Its apparent
that Deere and company are extremely successfully in selling
their products as equipment is flying off the shelf 20.5 days
faster then the next fastest selling competitor (Exhibit X).
However, despite all their success in sales, the company faces
major challenges in their cash cycle (Exhibit X). The company
is extremely inefficient in collecting receivables as their

company’s receivable turnover in days is 334.8 days which is
283.8 days longer than the next competitor who takes the
longest (Exhibit x). A slow collection period may be in result of
Deere’s strong bond with farmers to not reposes equipment if
payments are not made in time. Though the reason for leniency
is Deere’s great commitment to customer satisfaction, the
company is unable to pay their current liabilities in time which
takes 30.1 days longer than the next slowest competitor. Deere
and company is also highly leveraged with 83 percent of total
assets financed with debt (Exhibit x). Also, the company’s total
capital invested is financed 68 percent through debt (more than
half). Consequently, despite their great success with sales
growth, with the current issues involving their cash cycle and
debt, Deere is greatly hindered with expanding globally.
2. Corporate Culture: Deere’s corporate culture is revolved
around delivering great quality and providing innovative
products that result in greater customer value and service.
Stemming from striving to provide value and service to its
customers, Deer developed culture of corporate responsibility.
The company is giving back to the world by identifying
solutions to world hunger, improving educational opportunities,
and helping to develop better communities in locations where it
operates. In most cases, Deere’s employees volunteered to assist
in the execution of its social initiatives. In addition, employees
can feel a sense of purpose to work for a company that always
aims to innovate and improve lives. As a result, employees are
most likely proud to work for a company that is socially
responsible and a company who provides a purpose (Innovate),
which sets a positive culture within Deere and Company.
3. Company Structure: The structure of Deere and Company is
made up of three divisions; Agriculture and Turf Equipment,
Construction and Forestry Equipment, and the Financial
Services. The agriculture and Turf Equipment division was
Deere’s largest division and was the focus of its new product
development activities. In addition to the three divisions, the
company’s structure was also made up of strong dealership

collaboration for an effective distribution system. The company
has plant dealerships all across the world. Deere also has
several plant operations in the United States and on a global
scale.
where it also competed with a line of tractors, articu-
lating dump trucks, backhoe loaders, motor grad-
ers, excavators, and bulldozers. The company also
manufactured and marketed forestry equipment, turf
equipment, and diesel engines for marine and con-
struction equipment uses. The company’s primary
challenge in 2014 was how to best defend against the
competitive pressures stemming from its chief rivals
in the agricultural and construction equipment indus-
tries, who were also preparing for rapidly expanding
industry growth.
COMPANY HISTORY
Deere & Company began manufacturing and mar-
keting farming equipment in 1837 when John Deere,

a blacksmith and inventor, began forging steel plows
for mule-drawn walking plows. The company added
corn planters, wheeled sulky ploys, and cultivators
during the late 1800s, but its walking plow accounted
for the majority of its business until the company
acquired motorized tractor producer Waterloo Boy
in 1918. Deere’s acquisition of Waterloo Boy dra-
matically changed the company’s business model
and scope of operations, but it was a necessity since
Ford Motor Company was revolutionizing agricul-
ture with the manufacture and sale of Fordson farm
Deere & Company in 2014:
Its International Strategy in the
Agricultural, Construction, and
Forestry Equipment Industry
Alen Badal
Author and Researcher
John E. Gamble
Texas A&M University–Corpus Christi

Deere & Company had its best-ever year in fiscal 2013 with
record net income for the third con-secutive year. The
company’s sales and earn-
ings of $37.8 billion and $3.54 billion, respectively,
resulted from the success of its global strategy keyed
to product innovation and quality, operating excel-
lence, and best-in-industry customer service. Deere
introduced dozens of technologically advanced agri-
cultural and construction products during 2013 that
helped boost productivity and lower the costs of its
customers in farming and construction.
The company’s prospects for even stronger
financial performance were good as the global
demand for agricultural products was expected to
double by 2050. International markets such as China,
Brazil, and Russia already accounted for more than
35 percent of the company’s revenues in 2013, and
they would likely make up a much larger percentage
of sales in the long term as living standards in emerg-
ing markets improved. Deere & Company had rec-

ognized the importance of international expansion
as early as 1956, when it first established operations
outside the United States, but it was accelerating its
efforts to prepare for rapid increases in the demand
for food in international markets. The company built
or acquired new plant capacity in Brazil, Germany,
and China in 2013 and had plans for seven new fac-
tories in international markets in 2014.
Deere & Company achieved its record-setting
year despite a slowdown in the construction industry,
CASE 19
Copyright © 2014 by Alen Badal and John E. Gamble. All rights
reserved.
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Final PDF to printer
C-286 PART 2 Cases in Crafting and Executing Strategy

tractors. Ford sold more than 34,000 farm tractors in
1918 as farmers across the United States easily rec-
ognized how machinery could boost productivity in
agriculture.
Deere’s shift in strategy began with disastrous
results, with the Waterloo Boy brand selling only 79
tractors in 1921. The first John Deere–branded trac-
tor, the Model D, was launched in 1923 and was so
popular that it remained in the company’s product
line for 30 years. Deere added more models to the
product line throughout the 1920s. The appeal of
the company’s Model D, GP, Model 1, and Model 2
tractors allowed its revenues to soar until the depths
of the Great Depression in 1922, when its revenues
plunged to $8.7 million. However, even though
Deere & Company was losing money, the company’s
management chose not to repossess farm equipment
owned by farmers unable to make payments during

the Depression—a decision that would solidify its
bond with farmers for generations.
The company expanded internationally in
1956 when it opened an assembly plant in Mexico
and acquired a German tractor manufacturer and
a Spanish harvester manufacturer. Deere & Com-
pany expanded further internationally when it con-
structed a tractor and implement manufacturing
plant in Argentina in 1958, built a plant in France
in 1961, and acquired a cultivator manufacturer in
South Africa in 1962. By 1963, John Deere was the
world’s largest producer of farm and industrial trac-
tors and equipment. The company also began sell-
ing lawn and garden tractors that year. In 2014, with
its world headquarters in Moline, Illinois, Deere &
Company remained the largest agricultural equip-
ment and machinery manufacturer in the world,
with operations in more than 26 countries. The com-

pany’s income statements for fiscal 2011 through
fiscal 2013 are presented in Exhibit 1 . Deere &
Company’s balance sheets for fiscal 2011 through
fiscal 2013 are presented in Exhibit 2 .
OVERVIEW OF THE TRACTOR
AND AGRICULTURAL
EQUIPMENT INDUSTRY
The tractor and agricultural equipment industry was
projected to grow at an attractive rate for decades
because of increasing urbanization and rising stan-
dards of living in many countries around the world.
By 2050 the global population was expected to
exceed 9 billion, up from approximately 7 billion in
2014, with Asia and Africa experiencing the great-
est increases. It was also expected that a growing
middle class would emerge in Latin America, China,
and India, among other developing economies. Thus,
agricultural output was projected to double by 2050
in order to maintain pace with the increase in global

population, which would require the rate of produc-
tion to grow. Also, an increase in urbanization would
stir a need for infrastructure development, with
the percentage of the world’s population living in
urban areas increasing from 50 percent in 2014 to
70 percent by 2050. The increase in urbanization
was expected to result in increases in the demand for
construction services and equipment.
The long-term macro-economic trends were
favorable for the $41.6 billion tractor and agricul-
tural industry, which had grown annually by 3.9 per-
cent between 2009 and 2014. The industry consisted
of dairy farm equipment and sprayers, dusters,
blowers, and attachments, with harvesting machin-
ery representing the largest segment—see Exhibit 3 .
The steady growth in the industry since 2009
was brought about by favorable sociocultural forces
and economic conditions that included farm inter-

est rates supported by the U.S. federal government
and subsidies of various sorts in countries outside
the United States. Also, the weakening U.S. dollar
and a rising demand for exporting helped rebuild the
farming industry.
The farming industry was consolidating as large
conglomerates took over smaller farms. As a result,
total volume increases and economies of scale were
taking place in the industry, along with more vertical
integration across supply chains. A demand for bet-
ter optimization of farming also resulted in reliance
on technology to reduce operating costs and increase
farming output. Precision agriculture was a growing
trend in the industry that allowed farmers to spot-
treat fields using aerial photography and geographic
information systems (GIS) technology to precisely
water, seed, and harvest in less time.
Industry Competition
The tractor and agricultural equipment industry

comprised more than 1,000 companies, with the top
four generating half of all revenues. Industry pro-
duction was concentrated primarily among Deere &
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CASE 19 Deere & Company in 2014 C-287
Period Ending: Oct 31, 2013 Oct 31, 2012 Oct 31, 2011
Total revenue $37,795,400 $36,157,100 $32,012,500
Cost of revenue 25,667,300 25,007,800 21,919,400
Gross profi t 12,128,100 11,149,300 10,093,100
Operating expenses
Research and development 1,477,300 1,433,600 1,226,200
Selling, general, and administrative 4,426,100
4,198,500 3,884,700
Operating income 6,224,700 5,517,200 4,982,200
Interest expense 741,300 782,800 759,400

Income before tax 5,483,400 4,734,400 4,222,800
Income tax expense 1,945,900 1,659,400 1,423,600
Minority interest (300) (6,900) (7,900)
Net income $ 3,537,300 $ 3,064,700 $ 2,799,900
Source: www.finance.yahoo.com .
EXHIBIT 1 Deere & Company Income Statements, Fiscal
2011–Fiscal 2013 (in thousands)
Company, CNH Industrial N.V., and AGCO Cor-
poration. Mergers affected the industry, with CNH
Industrial N.V. having gone through a merger with
KamAZ in 2010 and Fiat Industrial in 2013. Exter-
nal factors, such as emission standards, continue to
become more stringent in the United States. Quality
control, research and development, and adoption of
new technological advances were all strategic fac-
tors in the industry.
Agricultural equipment manufacturers were
driving the use of technology with larger, more
sophisticated equipment. Equipment manufactur-

ers also recognized the importance of customer
service and support and equipment financing as
farming consolidated to a smaller group of farming
corporations.
The average useful age for farming equipment
was estimated to be 10 to 20 years. A preference
of farmers was to prolong the life of equipment by
purchasing replacement parts. The industry was
expected to continue production of replacement
parts for equipment and reap the profits of the seg-
ment. Interest rates on farm equipment loans had a
direct impact on sales; lower rates and incentives
helped boost sales of higher-end equipment.
Profits had increased over the five-year 2009–
2014 period, with revenues increasing despite ris-
ing steel costs, which manufacturers had passed on
to buyers. The weakened U.S. dollar had increased
export sales for U.S. companies. An average industry

profit was projected as 6.2 percent of revenue. Wages
in the industry had decreased as a result of the
increased automation of the manufacturing process,
which lessened dependence on labor. Because of
technological advances in manufacturing, deprecia-
tion costs as a percentage of industry revenue had
increased for manufacturers. Product quality, inno-
vation, customer service, branding, and performance
were essential areas rivals competed on. Generally,
price competition between the three rivals was low;
as a result, competition centered on overall value
instead of price. Competitor barriers to entry into the
industry ranged from low to medium; however, with
such fierce competition among the top three, entrants
were surely challenged.
Globalization had a significant effect on func-
tions within the industry. Lower wages and over-
all production costs increased revenues. Between

2009 and 2014, both AGCO and Deere & Company
increased their percentage of revenue generated inter-
nationally; CNH’s tractor sales increased 25 percent
in Latin America during 2011, with combined sales
growth of 30 percent.
International Markets for
Agricultural Equipment
The declining U.S. dollar made it more affordable to
export equipment from the United States. In 2013,
total imports to the United States were estimated at
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Period Ending: Oct 31, 2013 Oct 31, 2012 Oct 31, 2011
Assets
Current assets
Cash and cash equivalents $ 3,504,000 $ 4,652,200 $

3,647,200
Short-term investments 1,624,800 1,470,400 787,300
Net receivables 35,039,200 31,426,400 27,501,600
Inventory 4,934,700 5,170,000 4,370,600
Total current assets 45,102,700 42,719,000 36,306,700
Long-term investments 221,400 215,000 201,700
Property, plant, and equipment 9,124,100 7,539,700
6,502,300
Goodwill 844,800 921,200 999,800
Intangible assets 77,100 105,000 127,400
Other assets 1,825,800 1,485,500 1,210,900
Deferred long-term asset charges 2,325,400 3,280,400
2,858,600
Total assets $59,521,300 $56,265,800 $48,207,400
Liabilities
Current liabilities
Accounts payable $ 9,240,800 $ 9,288,500 $
8,090,800
Short/current long-term debt 12,898,000 9,967,300
9,629,700

Total current liabilities 22,138,800 19,255,800
17,720,500
Long-term debt 21,577,700 22,453,100 16,959,900
Other liabilities 5,537,100 7,694,900 6,712,100
Minority interest 1,900 19,900 14,600
Total liabilities 49,255,500 49,423,700 41,407,100
Stockholders’ equity
Common stock 3,524,200 3,352,200 3,251,700
Retained earnings 19,645,600 16,875,200 14,519,400
Treasury stock (10,210,900) (8,813,800) (7,292,800)
Other stockholders’ equity (2,693,100) (4,571,500)
(3,678,000)
Total stockholders’ equity 10,265,800 6,842,100
6,800,300
Total liabilities and stockholders’ equity $59,521,300
$56,265,800 $ 48,207,400
Source: www.finance.yahoo.com .
EXHIBIT 2 Deere & Company Balance Sheets, Fiscal 2011–
Fiscal 2013 (in thousands)
$10.5 billion, while exports were estimated at $11.8
billion. Canada was the largest U.S export market,

with a 34 percent share of exports, while Mexico,
Australia, and Brazil were the next-largest export
markets for U.S. agricultural equipment manufac-
turers. Germany was the largest exporter of farm
equipment to the United States, accounting for 16
percent of U.S. imports. Canada, China, and Japan
were also significant exporters of farm equipment to
the United States—see Exhibit 4 .
Deere & Company’s Strategy in 2014
Deere & Company’s farming equipment product lines
were aimed at supporting the farming of every owner
of Deere equipment and compelling the thought of
“should’ve got a John Deere” among those who farmed
with rival equipment. Farming was arguably the most
time-sensitive industry since harvesting windows could
be limited to a matter of a few days. In addition, farming
seasons were limited to specific months when weather
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EXHIBIT 3 Product Segmentation of the Tractor and
Agricultural Equipment
Industry, 2013
Dairy farm equipment,
sprayers, dusters, blowers
and attachments,
9.6%
Harvesting
machinery,
24.2%
Parts sold
separately,
22.3%
Total: $41.6 billion
All other tractors and
agricultural machinery and
attachments,
19.5%

Haying machinery and
attachments,
12.3%
Planting, seeding and
fertilizing machinery and
attachments,
12.1%
Source: Adapted from IBISWorld, February 2014.
EXHIBIT 4 Leading U.S. International Trade Partners for
Agricultural Products, 2013
All others,
46%
Brazil, 4%
China,
13%
Germany,
16%
All others,
45%
Canada,
14%
Japan,
12%

Mexico
8%
Australia
7%
Canada,
34%
Total: $11.8 billion Total: $10.5 billion
Imports to the United StatesExports from the United States
Source: Adapted from IBISWorld, February 2014.
was favorable to various types of crops. Deere’s strat-
egy of producing the highest-quality, most reliable
farm equipment and offering farmers the highest level
of customer service resulted in fiscal 2013 being the
company’s best financial year ever.
Deere & Company’s strategic intent was to
achieve $50 billion in sales by fiscal 2018 and 12 per-
cent profit margins by fiscal 2014. Deere’s strategy was
keyed to expanding its business globally and enhanc-
ing its complementary businesses while supporting the

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Power Systems/Global Parts/Intelligent
Solution
s
Group. Deere’s strategy in each of its two heavy-
equipment divisions was to learn more about its cus-
tomers’ local needs and translate the knowledge into
products and services that delivered superior cus-
tomer value. The Agriculture and Turf division was
Deere’s largest division and was the focus of its new

product development activities. The Construction
and Forestry division remained profitable in spite
of a slowing demand for construction machines.
Deere’s Financial Services division also experienced
financial success. In 2013, the division achieved net
income of $565 billion. The loan and lease portfo-
lio of Deere & Company grew by approximately $5
billion.
Dealership Collaboration Deere & Company
attributed much of its success to its relationship with
its dealers throughout the world. It emphasized the
necessity of having an effective distribution and
aftermarket support system. In the Commonwealth

of Independent States, the number of dealerships
increased by 50 percent between 2011 and 2013. The
company also added new parts distribution centers
in South Africa and Argentina and had additional
expansion plans to begin operations in India and Bra-
zil. Deere established cooperative banking relation-
ships in seven African nations where additional sales
opportunities were projected. Also, the company had
a retailing-financing presence in over 40 countries
that accounted for more than 90 percent of its sales.
Product Innovation Deere & Company focused
on the use of technology to better assist end users
with managing and using their equipment. This was

achieved via the MyJohnDeere platform. This wire-
less data transmission system enabled the collection
of data that was used for analysis by John Deere, in
regard to the mechanical performance of equipment,
and by customers, in regard to production metrics.
In addition, Deere focused on manufacturing dozens
of equipment attachments, such as those utilized for
demolition and landscaping.
Increases in product lines also helped the com-
pany with its goal of continued growth and profit-
ability. In 2013, Deere introduced nine advanced
agricultural equipment models, as well as flex-fuel
premium lawn tractors, commercial mowers, and

Deere’s first hybrid-electric construction equipment.
The company focused particularly on increasing effi-
ciency and incorporating technology while reducing
overall business. In doing so, the company believed
its critical business factors (CBFs) consisted of bet-
ter understanding consumers at a root level, delivering
value, offering a world-class distribution system, and
grooming and hiring extraordinary international asso-
ciates. The CBFs were predicated on building from
the foundation already in place, consisting of Deere’s
exceptional business performance, optimal shareholder
value-added growth, and aligned high- performing,

team-oriented associates. The company evaluated the
“health and performance” of its operations on an ongo-
ing basis and, as necessary, made appropriate adjust-
ments to further improve customer value. Ultimately,
the overarching goal was to offer consumers farming
products that were representative of a company with
integrity and commitment to manufacturing innovative
products of the highest quality.
Deere’s purpose was to be fully committed to
those “linked to the land.” The company’s manag-
ers believed that many opportunities existed for the
company, such as an increase in the global popu-
lation and income growth, which would require

infrastructural needs on a global basis. Additional
opportunities included new consumer segmentation
and advances in technology.
The company identified challenges moving for-
ward. Specifically, Deere foresaw capturing more cus-
tomers across six identified key regions (United States/
Canada, European Union, Brazil, CIS/Russia, China,
and India), with a focus on meeting each country’s
local farming and agricultural equipment needs while
leveraging global economies of scale. The company
was strategizing forward progress without encounter-
ing any headwind. The company planned to increase

its market share in developed markets. At the time,
Deere was number two in market share in North Amer-
ica, a ranking it hoped to strengthen and increase. Per-
haps a continuous focus on technology and increased
customer services, coupled with competitive pricing,
would help the company increase its market share.
Alternatively, maybe the solution was to focus on
additional research and development and enhance its
domestic manufacturing plants and products while also
focusing on optimally manufacturing equipment to
meet the specific country demands of farming abroad.
Deere & Company’s Business Divisions In
2014, the company had three primary businesses:

Agriculture and Turf Equipment, Construction and
Forestry Equipment, and the Financial Services/
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garden and turf care products, while the plant in
Augusta, Georgia, manufactured the 5E, 5EN, and
5M Series tractors. The Fuquay Varina, North Caro-
lina, plant made golf equipment and turf mowers.
International Manufacturing Operations
Expansion plans called for new manufacturing loca-

tions in key markets that were to be completed in
2013 and ready in 2014 to support increased produc-
tion. Deere opened three locations in China to sup-
port construction equipment, engines, and large farm
equipment; two locations in Brazil, one of which
was in conjunction with Hitachi, for construction
equipment; one location in India for manufacturing
farm equipment; and one in Russia for manufactur-
ing seeding and tillage machines. Additional plans
included expansion into Germany to manufacture
cab production and into Brazil to manufacture large
tractors. In the United States, the company’s expan-
sion included new factories in Moline and Valley

City, North Dakota, and extensive modernization at
existing plants. Deere sold its landscape operation
and purchased a manufacturer of ultra-wide planters.
Deere’s international manufacturing operations
spanned Mexico, India, Argentina, China, Canada,
and Europe. Two plants in Mexico (Saltillo and
Torreon) manufactured a variety of agricultural trac-
tors. Power systems were manufactured in Fleury-
les-Aubrais, France. Tractors, diesel engines, and
header models for grain harvesting were built in
Granadero Baigorria, Santa Fe, Argentina. The Pune,
India, plant manufactured small agricultural trac-

tors, while additional tractors were manufactured in
the Mannheim, Germany, plant. The Zweibrücken,
Germany, plant manufactured harvesting equip-
ment, and the Horst, Netherlands, plant manufac-
tured spraying equipment. Forwarders and wheeled
harvesters were built in the Joensuu, Finland, plant.
The Edmonton, Alberta, Canada, plant produced
remanufactured equipment. Consumer and com-
mercial lawn equipment was manufactured in Gum-
mersbach, Germany.
DEERE’S RIVALS IN THE
TRACTOR AND AGRICULTURAL
EQUIPMENT INDUSTRY
Deere & Company was the world’s leading manu-

facturer of agricultural and forestry equipment,
with a market share of 35.4 percent in 2013. Its
emissions and meeting consumers’ requirements for
power, reliability, and fluid and fuel efficiency. In a
highly notable achievement, Deere’s larger engines
were certified as meeting the strict U.S. and European
emission standards. Deere had reduced the emissions
level of all its engines by over 99 percent since 1996
as a result of redesigning virtually all of its engines.
Awards, Achievements, and Corporate Re-
spon sibility Deere & Company was named one
of the top-100 innovators by a leading business
media group on the basis of its patents and technol-
ogy developments. The company received additional

awards and recognition from organizations through-
out the world, including special recognition for its
new Chinese-made combine, which took top honors
at China’s largest machinery venue.
In 2013 Deere focused on identifying solutions
to world hunger, improving educational opportu-
nities, and helping to develop better communities
in the locations where it operated. In most cases,
Deere & Company employees volunteered to assist
in the execution of its social initiatives. For exam-
ple, to further the company’s social mission, more
than 3,000 U.S. employees prepared approximately

960,000 packaged meals for those in need in 2013,
and 20 employees spent a week in northwest India
training small farmers in new farming methods. In
2013, Deere & Company was named for the fifth
time to Fortune ’s “Most Admired Companies” list.
Domestic Manufacturing Operations Deere’s
manufacturing plants in the United States were located
in seven states (Iowa, Illinois, North Dakota, Georgia,
Louisiana, Missouri, and Wisconsin). Deere manufac-
tured tractor cabs and other assemblies in its Waterloo,
Iowa, plant. Large combine harvesters and hydraulic
cylinders and planting equipment were manufactured
in East Moline, Illinois. The plant in Valley City, North

Dakota, manufactured tilling and seeding equipment.
The Davenport, Iowa, plant manufactured wheel
loaders, motor graders, dump trucks, and forestry
equipment. In neighboring Dubuque, Iowa, produc-
tion consisted of backhoes, crawlers, tracked forestry
equipment, and skid-steer loaders. The Springfield,
Missouri, plant manufactured engines.
The Ankeny, Iowa, plant manufactured spray-
ers, while hay and pull-type mowers were made in
Ottumwa, Iowa. Cane harvesting equipment and
scrapers were made in Thibodaux, Louisiana. The
plant in Horicon, Wisconsin, produced lawn and

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equipment market in 2013. The company’s tractors,
combines, planters, grain storage silos, and other
agricultural equipment was sold in 140 countries.
Sales from North America accounted for approxi-
mately 25 percent of the company’s revenues in
2013. The company held a strong market presence
in emerging markets, such as Brazil and other Latin
American markets. Approximately 60 percent of its

revenues were generated from tractor sales under
brands such as Massey Ferguson, Fendt, and Chal-
lenger. The company had approximately 1,300
dealers in North America, 340 dealers in South
America, 1,160 dealers in Europe and the Middle
East, and 300 dealers in the Asia-Pacific region.
A summary of AGCO’s financial performance
between 2009 and 2013 is presented in Exhibit 6 .
Caterpillar, Inc.
Caterpillar, Inc., manufactured construction and min-
ing equipment, diesel and natural gas engines, gas
turbines, and diesel-powered locomotives. The com-
pany also built and marketed small to medium-sized

track-type tractors for use in the construction and
mining industries. In 2013, the company’s construc-
tion industry division recorded sales and operating
profit of $18.5 billion and $1.8 billion, respectively.
The company’s construction equipment sales in North
America for 2013 were approximately $7 billion, with
sales in the Asia-Pacific region approximating $4.7
billion; sales in Europe, Africa, and the Middle East
slightly exceeding $4 billion; and sales in Latin Amer-
ica approximating $2.7 billion. In 2013, the compa-
ny’s revenues for its energy and power systems were
approximately $20.1 billion, its mining machinery
primary competitors in the tractors and agricul-

tural equipment industry were CNH Industrial N.V.,
the maker of Case and New Holland tractors and
construction equipment; AGCO Corporation, the
maker of Massey Ferguson and other brands; and
Caterpillar, Inc.
CNH Industrial N.V.
CNH Industrial N.V., based in Basildon, United
Kingdom, held an 11.7 percent market share and
was Deere & Company’s primary rival in agricul-
tural equipment. CNH Industrial was formed in
2013 as a result of a merger between CNH Global
and Fiat Industrial. The company marketed agri-
cultural equipment under 12 global and regional

brands, and it had 62 manufacturing plants, 48
research and development centers, and 6,000 deal-
ers in 190 countries. The company’s farming/agri-
cultural and construction equipment was marketed
under such brands as Case IH Agriculture, New
Holland Agriculture, and Steyr. CNH Industrial also
manufactured and marketed trucks, busses, and other
commercial vehicles under the Iveco and Heuliez-
Bus brands. The company’s total revenues in 2013
were €25.8 billion. Approximately 62 percent of the
company’s revenues and 94 percent of its operating
profits were generated from the sale of agricultural

and construction equipment in 2013. Exhibit 5 pro-
vides a summary of the company’s financial perfor-
mance for 2009 through 2013.
AGCO Corporation
AGCO Corporation, based in Duluth, Georgia, held
an approximate 4 percent share of the global farm
2013 2012 2011 2010 2009
Net revenues €25,778 €25,785 €24,289 €21,342 €17,968
Trading profi t 1,985 2,063 1,690 1,096 322
Operating profi t (loss) 1,868 1,846 1,633 1,021 (19)
Profi t (loss) before taxes 1,507 1,460 1,162 567 (470)
Profi t (loss) 917 900 694 369 (503)
Total assets 40,941 38,861 38,572 34,873 30,872

Total equity 5,556 5,376 5,252 4,556 5,718
Source: CNH Industrial 2013 annual report.
EXHIBIT 5 Financial Summary for CNH Industrial N.V.,
2009–2013
(in millions of euros)
292tho20598_case19_C285-C294.indd 292 10/30/14 12:03
PM10/30/14 12:03 PM
emerging and new markets and utilizing technol-
ogy to both help production and provide real data
to customers that would support increased produc-
tivity. Deere management believed that in order

to continue to achieve global business success,
the company needed to understand its custom-
ers at a deeper level and deliver greater customer
value. Management also understood that Deere’s
employee-associates and dealer allies were criti-
cal elements in its plan for long-term success. The
overall aim was to deliver quality, stemming from a
company with stellar integrity that was committed
to providing innovative products and services for
consumers.
Specifically, the company planned to advance
operations and increase market share across six

key markets: the United States and Canada, Bra-
zil, China, Russia, India, and the European Union.
However, the company’s chief rivals all recognized
the same trends in the macro-environment and the
same opportunities for growth in revenues in prof-
its. Deere & Company management would be
compelled to develop an international strategy that
yielded competitive advantage in domestic and rap-
idly growing emerging markets to capitalize on the
industry’s opportunities.
revenues were approximately $13.3 billion, and its
financial services revenues were nearly $3.2 billion.
A summary of Caterpillar’s financial performance for

2009 through 2013 is presented in Exhibit 7 .
Caterpillar’s strategy was focused on best-in-
industry quality and after-the-sale service. The com-
pany maintained 178 global dealers, with an average
dealer relationship of more than 88 years. The com-
pany’s relationship with its dealers and its commit-
ment to unmatched parts availability ensured that
the 3 million Caterpillar products around the world
were in top-notch operating condition and were able
to keep construction projects on schedule. Caterpil-
lar’s strategy was also focused on developing new
products and improving the company’s cost structure

to boost profitability. Even though Caterpillar was
the industry leader in construction equipment sales,
it experienced a dramatic decline in sales and profit
in 2013 due to a slowdown in global construction.
THE FUTURE FOR
DEERE & COMPANY
Deere & Company’s strategy seemed on track in
2014 as the company focused its efforts on entering
2013 2012 2011 2010 2009
Net revenues $10,786.9 $9,962.2 $8,773.2 $6,896.6
$6,516.4
Gross profi t 2,390.6 2,123.2 1,776.1 1,258.0 1,071.9
Income from operations 900.7 693.2 610.3 324.2 218.7
Net income 592.3 516.4 585.3 220.2 135.4

Total assets 8,438.8 7,721.8 7,257.2 5,436.9 4,998.9
Total equity 4,044.8 3,481.5 3,031.2 2,259.2 2,394.4
Source: AGCO Corporation 2013 annual report.
EXHIBIT 6 Financial Summary for AGCO Corporation, 2009–
2013 (in millions)
2013 2012 2011 2010 2009
Net revenues $55,656 $65,875 $60,138 $42,588 $32,396
Operating profi t 5,628 8,573 7,153 3,963 577
Net profi t 3,789 5,681 4,928 2,700 895
Total assets 84,896 88,970 91,218 63,728 59,842
Source: Caterpillar, Inc., 2013 annual report.
EXHIBIT 7 Financial Summary for Caterpillar, Inc., 2009–
2013 (in millions)

293tho20598_case19_C285-C294.indd 293 10/30/14 12:03
PM10/30/14 12:03 PM
This is a group project. My part is to do the competitive
analysis which include financial analysis, corporate culture, and
corporate structure. I have attached the case (Deere & Company
in 2014) also I have attached a previous work by another group
you can use it as reference. Please I want to be 2.5 pages single
space

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