John Deere SWOT & PESTLE Analysis

Strength

1. Huge product and service portfolio: John Deere has a huge product portfolio in three particular domains viz. equipment, parts and finance. It has many variants in trucks, backhoes, cutters & shredders, dozers, engines, excavators, loaders, mowers, skidders, sprayers, sewing machines, tractors etc. In its financing section, it provides equipment loans, equipment leases and account plans like Multi-Use, Revolving Plan and Power Plan account. In parts section, it offers parts for agriculture, lawn & garden, commercial mowing, turf, engine, construction, maintenance etc. along with remanufactured parts and components. It also provides services like training, simulations, warranty and protection plans. Through its own e-commerce site, John Deere Store, it sells maintenance kits, replacement parts, cleaner, lubricants & paint, equipment accessories in parts section and other merchandised goods. Looking at the products and services offered under John Deere brand, it can be said that it truly has a strong Product and Service portfolio.

2. Brand recognition and long history of trust and leadership: John Deere has the distinction of finding a place on Fortune magazine's list of 50 most-admired companies. It is currently one of the most respected and popular brands within the industry. It started in 1837 as a one-manned blacksmith shop and since then it has continually upgraded itself by fulfilling customer needs in various areas such as agriculture, construction, forestry etc. It has expanded according to the changing needs of the industry and grew to become the world leader in various sectors such as forestry, heavy equipment, construction and agricultural vehicles. It celebrated 100 years of its legendary product - tractor in 2018. The company has a trustworthy position in its customers’ mind not just because of its long-standing history of providing reliable equipment and services throughout 180+ years of its operations but also because of its ever-innovating product portfolio which it keeps on upgrading according to changing industry needs. Combination of having a long history, trust in customers’ mind and leadership position in market is rare in its industry and thus this serves as one of the most important strength of John Deere.

3. End to end road construction portfolio: John Deere completed acquisition of a German company called Wirtgen Group in 2018 for $5.2 billion. Wirtgen Group is world’s largest manufacturer of road construction equipment and acquisition of it means enhanced road construction portfolio with increased global presence and customers. Wirtgen Group offers Road Construction Technology Viz Milling, Stabilizing, Paving and Compacting and Mineral Technology viz. Miners, Crushers and Asphalt plants. This along with John Deere’s offerings in Earth Moving viz Dozers & Graders, Loaders and Excavator complement each other. Integration of these two has provided John Deere with a complete solution for end to end road construction which consists of Quarry, Crusher/Screener, Milling Machine, Asphalt Plants, Road Construction Site, Rough Grading, Finish Grading, Compactors, Asphalt Paver, Rollers and Concrete Paver. This transaction has not only added industry leading product lines to its business but has also improved its competitive position in the market. Thus, End to end road construction portfolio now has become one of the core strengths of John Deere.

The remaining section of Strength is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Political

1. Farm equipment demand dependent on government agricultural policy: Governments of many developing nations provide funding for purchasing farm equipment to its farmers in form of subsidies or incentives to buy etc. This is because farmers in these markets lack capital and other resources to purchase equipment on their own. Thus, the agricultural equipment market in such nations is heavily dependent on the current agricultural policy of the government, especially in countries like Brazil and India. The problem with such funding is that it is not a sustainable solution for a farm equipment manufacturer to be reliable on these markets as the funding may abruptly be withdrawn with change in government or its fiscal policies. If such change occurs, the farmers would not be able to purchase technologically advanced farm equipment that John Deere produces on their own. This could create an additional headwind to the company’s production volume and profitability. Thus, John Deere constantly faces this political risk from emerging and developing markets.

The remaining section of Political is available only in the 'Complete Report' on purchase.

Economic

This section is available only in the 'Complete Report' on purchase.

Social

1. Global population growing in size and affluence: Long term societal changes like urbanization or population growth could have a positive impact on the business of John Deere with the right strategy for its future. It is estimated that by year 2050, the world population will reach 9.8 billion with large affluent middle class emerging from the countries like India and China. This social change could serve as a great opportunity for John Deere from two different perspectives. First, with increase in population, the agricultural produce needs to be increased to serve growing population. Additionally, the farming would have to be done with limited natural resources like land and water, for which advanced technological farm equipment offered by John Deere could be grow in demand. Second, it is also estimated that by year 2050, 70% of the world population would be living in cities which means rapid urbanization will take place within next few years for which infrastructure development will be needed. John Deere with its Construction equipment solutions could serve this need as well and be benefitted by this social transformation that the world will witness in coming years.

2. Bringing social change through Citizenship: Through its Citizenship, John Deere tries to solve problems related to world hunger, education and community. By engaging with partners such as TechnoServe, PYXERA Global, and Mercy Corps, it supports projects in the areas of farmer training, value-chain enhancement, and microfinance services. It focuses on improving the livelihoods of smallholder farmers by increasing their agricultural production and use of mechanization to address hunger issues. As part of its initiatives in education sector, it associates with iJAG, FIRST, Project Lead The Way, Junior Achievement, and FFA to inspire youth to reach their greater potential by improving secondary school graduation rates among at-risk young people and increasing the number of youth who earn engineering, IT, and manufacturing certifications and degrees. Through John Deere Inspire, it is engaging next generation of innovators through science, technology, engineering, and mathematics (STEM) education and helping students of ages 6 to 18 hone their collaboration, problem-solving, and critical thinking skills. By partnering with local United Ways and the organizations they support, Global Communities, food banks, and the American Red Cross, John Deere strives to create an economically strong, vibrant, and resilient community.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

This section is available only in the 'Complete Report' on purchase.