Case Study Description of Deere & Co.: Industrial Equipment Operations
Describes the pricing of Deere's crawler tractors used in a variety of construction and industrial applications. Includes a strategic, multimillion-dollar move into the large bulldozer market as well as the pricing of tractors, accessories, and parts.
Swot Analysis of "Deere & Co.: Industrial Equipment Operations" written by Benson P. Shapiro includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tractors Bulldozer facing as an external strategic factors. Some of the topics covered in Deere & Co.: Industrial Equipment Operations case study are - Strategic Management Strategies, Operations management, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Deere & Co.: Industrial Equipment Operations casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Deere & Co.: Industrial Equipment Operations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Deere & Co.: Industrial Equipment Operations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tractors Bulldozer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tractors Bulldozer operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Deere & Co.: Industrial Equipment Operations can be done for the following purposes –
1. Strategic planning using facts provided in Deere & Co.: Industrial Equipment Operations case study
2. Improving business portfolio management of Tractors Bulldozer
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tractors Bulldozer
Strengths Deere & Co.: Industrial Equipment Operations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tractors Bulldozer in Deere & Co.: Industrial Equipment Operations Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Tractors Bulldozer in the sector have low bargaining power. Deere & Co.: Industrial Equipment Operations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tractors Bulldozer to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Tractors Bulldozer has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Deere & Co.: Industrial Equipment Operations HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Deere & Co.: Industrial Equipment Operations Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Tractors Bulldozer is one of the leading recruiters in the industry. Managers in the Deere & Co.: Industrial Equipment Operations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Tractors Bulldozer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tractors Bulldozer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Tractors Bulldozer is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Tractors Bulldozer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Deere & Co.: Industrial Equipment Operations Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Tractors Bulldozer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tractors Bulldozer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Tractors Bulldozer is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Benson P. Shapiro can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Tractors Bulldozer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tractors Bulldozer has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Tractors Bulldozer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Tractors Bulldozer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Deere & Co.: Industrial Equipment Operations Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Sales & Marketing field
– Tractors Bulldozer is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Tractors Bulldozer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Deere & Co.: Industrial Equipment Operations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Deere & Co.: Industrial Equipment Operations are -
High cash cycle compare to competitors
Tractors Bulldozer has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Tractors Bulldozer has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Tractors Bulldozer has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Deere & Co.: Industrial Equipment Operations HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Tractors Bulldozer has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Tractors Bulldozer needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Tractors Bulldozer supply chain. Even after few cautionary changes mentioned in the HBR case study - Deere & Co.: Industrial Equipment Operations, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tractors Bulldozer vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Tractors Bulldozer has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Deere & Co.: Industrial Equipment Operations should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Deere & Co.: Industrial Equipment Operations HBR case study mentions - Tractors Bulldozer takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Deere & Co.: Industrial Equipment Operations, it seems that the employees of Tractors Bulldozer don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Deere & Co.: Industrial Equipment Operations, is just above the industry average. Tractors Bulldozer needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Tractors Bulldozer, firm in the HBR case study Deere & Co.: Industrial Equipment Operations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Deere & Co.: Industrial Equipment Operations | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Deere & Co.: Industrial Equipment Operations are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tractors Bulldozer in the consumer business. Now Tractors Bulldozer can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tractors Bulldozer in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Tractors Bulldozer to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tractors Bulldozer can use these opportunities to build new business models that can help the communities that Tractors Bulldozer operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Manufacturing automation
– Tractors Bulldozer can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Buying journey improvements
– Tractors Bulldozer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Deere & Co.: Industrial Equipment Operations suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tractors Bulldozer can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tractors Bulldozer to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tractors Bulldozer to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Tractors Bulldozer has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Tractors Bulldozer can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Tractors Bulldozer can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Tractors Bulldozer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Tractors Bulldozer has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Deere & Co.: Industrial Equipment Operations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tractors Bulldozer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Deere & Co.: Industrial Equipment Operations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Deere & Co.: Industrial Equipment Operations are -
High dependence on third party suppliers
– Tractors Bulldozer high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tractors Bulldozer in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tractors Bulldozer business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Deere & Co.: Industrial Equipment Operations, Tractors Bulldozer may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tractors Bulldozer can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Deere & Co.: Industrial Equipment Operations .
Consumer confidence and its impact on Tractors Bulldozer demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tractors Bulldozer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tractors Bulldozer needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tractors Bulldozer will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Tractors Bulldozer.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Tractors Bulldozer is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Tractors Bulldozer in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Deere & Co.: Industrial Equipment Operations Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Deere & Co.: Industrial Equipment Operations needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Deere & Co.: Industrial Equipment Operations is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Deere & Co.: Industrial Equipment Operations is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Deere & Co.: Industrial Equipment Operations is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Tractors Bulldozer needs to make to build a sustainable competitive advantage.
