Our John Deere SWOT analysis identifies the strengths, weaknesses, opportunities, and threats that the agricultural equipment manufacturing company faces.
If you travel towards the countryside, you often see heavy machines and agricultural equipment in fields with a leaping deer logo. But have you ever thought about what company that logo represents?
If you haven't looked into what brand that logo represents, it's okay because we will discuss the same company in detail today.
Today's article is about John Deere. It is a manufacturing company that manufactures agricultural equipment and heavy machines used for farming, construction, and other purposes.
John Deere holds 20% of the agriculture and τurf market share. It is currently one of the biggest agricultural equipment manufacturing companies helping the farming industry grow with its latest equipment.
After looking at the operations of John Deere, we have decided to conduct a John Deere SWOT analysis to identify the strengths, weaknesses, opportunities, and threats that the company faces.
However, before we proceed further to carry out the SWOT analysis, let's look at the history of John Deere to understand how the company was established and evolved over time.
You might be thinking, what does the name "John Deere" stand for? Well, the company is registered in the name of its founder. John Deere was a blacksmith who was born in 1804. Later, Deere moved to Illinois, where he manufactured a steel plow that helped the farmers shed the sticky soil without disruption.
This plow brought innovation to the agricultural industry and increased the farmers' efficiency and productivity. After the steel plow became a huge success, John Deere decided to establish a factory on the river bank of the Mississippi River.
In that factory, John Deere started manufacturing different agricultural products such as pitchforks, shovels, and steel plows. The agricultural equipment manufactured by John Deere became very popular among the farmers since it used to help them work in the soggy Midwestern fields.
Later in 1868, John Deere established his company named Deere & Company. He later also developed the logo for his company in 1876. In the following years, Deere & Company expanded its operations.
In 1912, the company started designing tractors. Deere & Company soon bought the Waterloo Gasoline Engine Company in 1918, which used to manufacture tractors. The farmers loved the tractors manufactured by Deere & Company. As a result, the company got very famous.
Later during World War II, Deere & Company started manufacturing machinery used in the war—for example, aircraft parts, military tractors, ammunition, transmissions for the M3 tanks, etc.
Later in the 20th century, Deere & Company expanded its operations and entered the construction industry. In 1956, the company started manufacturing industrial and construction equipment.
John Deere is a top agricultural, construction, and industrial manufacturing company. The machines and equipment manufactured by John Deere help all of the mentioned industries to operate smoothly.
The company has managed to expand over the years. In 2022 John Deere's revenue was reported to be $52.57 billion. John Deere operates in more than 30 countries worldwide, and it operates at 106 different locations across the globe.
After looking at John Deere's history, let's proceed with the brand's SWOT analysis. However, before proceeding to the SWOT analysis, we must discuss what a SWOT analysis is.
SWOT analysis is a business technique companies use to analyze the companies' strengths, weaknesses, opportunities, and threats. A SWOT template highlights the external and internal factors that impact an organization's operations.
Now that we have made our readers aware of the SWOT analysis let's proceed and look at the strengths of John Deere.
Strengths of John Deere
Every organization has some strengths that help it to grow in the market. This strength section of the SWOT analysis highlights all the strengths an organization has due to which it can take over its competitors. Let's have a look at some of the strengths of John Deere.
Diverse Portfolio
Businesses are eager to diversify their products to generate revenue by selling different products. One advantage of having a diverse range of products is that a business doesn't have to rely on a single product for revenue.
Moreover, diverse products increase a company's customer base since it caters to customers with different tastes and needs. For example, John Deere offers different types of products to its customers.
Initially, the company gained popularity for its agricultural equipment and machinery, such as tractors, harvesters, mowers, cutters, etc. However, later the brand diversified its products by manufacturing heavy construction machinery, which included bulldozers, cranes, diggers, etc.
Besides that, the brand also started manufacturing machines used by the government and military. Such diversification helps the brand to generate revenue by selling various products to diverse clients.
Geographical Presence
One of the objectives of every organization is to increase its geographical presence to generate more revenue by selling in different parts of the world.
Moreover, a high geographical presence translates into a more extensive customer base. This is why businesses expand their operations to different parts of the world. For example, John Deere has a significant geographical presence in the US and other parts of the world.
John Deere operates in more than 30 countries and is present at 106 different locations. Such a high geographical presence helps the brand increase its customer base.
Strong Financial Position
Businesses aim to attain a robust financial position to invest in R&D and marketing campaigns. Moreover, having a firm financial position in the market ensures the smooth operations of a business.
John Deere has a solid financial position in the market. If we look at the net income of the brand, we can clearly see that the brand has retained significant profits in the past 12 years.
Having such a solid financial position allows John Deere to innovate and spend capital on marketing.
Weaknesses of John Deere
No matter how big an organization is, it will have some weaknesses that will hold the organization back from achieving its true potential. Similarly, John Deere possesses some weaknesses despite being one of the biggest heavy machinery manufacturers. In this section, we will highlight some of John Deere's weaknesses.
Products Are A Source of Carbon Emissions
After the Paris Accord got tabled in 2016, countries and brands have decided to limit their contribution to greenhouse gases to prevent climate change.
Many automotive brands have switched to the manufacturing of electric vehicles. However, John Deere still manufactures heavy machines that have conventional engines.
Due to this, many activists and pressure groups target John Deere, and as a result, John Deere has to deal with bad publicity.
Limited International Presence
Businesses look forward to expanding internationally to increase their sales and revenue. John Deere has an international presence. However, it is pretty limited. John Deere has a significant presence in the US and Europe. Besides that, the company rarely operates in the emerging economies of Africa.
Other than that, John Deere manufactures construction machines. It could have a market in middle eastern countries such as Saudi Arabia, UAE, Qatar, etc. However, John Deere has no presence in any of these countries. Such a limited international presence acts as a weakness of John Deere.
Controversy Surrounding Labor
Every business wants to avoid controversies since they create a very negative impact on the business. However, recently, John Deere became subject to a controversy that involved its workforce.
In 2021, more than 10,000 workers of John Deere protested against the company. They accused the heavy machine manufacturing brand of poor treatment of the labor.
This protest damaged John Deere financially. Moreover, the brand's image was also damaged, so many employees would now avoid working at John Deere.
Opportunities For John Deere
Businesses are always looking for opportunities to grow big. In this section, we will analyze some of the opportunities for John Deere to increase its market share and improve its image.
Manufacturing of Electric Machinery
Climate change has become a susceptible topic over the years. As a result, governments are now taking action against businesses that are not taking measures to prevent climate change. Moreover, consumers have become aware of and avoid buying products that cause damage to the environment.
John Deere is one of the biggest manufacturers of heavy machinery. Unfortunately, all these machines have conventional engines requiring diesel or petrol to operate. Hence, they cause damage to the environment.
John Deere now has the opportunity to manufacture heavy machinery with an electric engine. Manufacturing such machinery will improve the brand's image and attract more consumers. This will increase the sales of John Deere. Hence it will benefit the brand.
Mergers And Acquisitions
Businesses apply different techniques to increase their market share. One of the most famous strategies businesses apply is forming mergers with other businesses and acquiring smaller businesses.
John Deere could apply the same strategy to increase its market share. It has the opportunity to form mergers with other companies that can add value to its business and acquire smaller businesses to capture its customer base.
Both these strategies will increase the market share of John Deere and improve the quality of its products.
Increasing Presence In Emerging And Agricultural Economies
In the last few decades, some economies have emerged on the global map. John Deere should capitalize on the opportunity to increase its presence in the emerging economies of Africa and the rest of the world.
Moreover, since John Deere manufactures quality agricultural machines and equipment, it should increase its presence in agricultural economies such as Bangladesh and Pakistan. Therefore, penetrating such economies will prove to be beneficial for John Deere.
Threats Faced By John Deere
Businesses face multiple threats from the external environment. This section will highlight some of the threats that John Deere has to face externally.
Global Inflation
In 2022, the world experienced record inflation. The inflation rate went up to almost 9%, considered the highest in several decades. Due to this, the cost of raw materials and John Deere's products increased significantly.
In case the rate of inflation doesn't drop significantly in 2023, the products of John Deere will become more expensive. As a result, the demand for John Deere's products will fall. This will cause damage to the brand financially.
Political Instability
John Deere is a multinational company. It operates in different parts of the world. Besides the US, it operates most significantly in Europe. However, Europe faces a tense political situation due to the recent Russian military operation in Ukraine.
If Europe gets involved in the war, the demand for John Deere's products will fall significantly, and the brand will have to bear the heavy financial loss.
Tough Competition
Undoubtedly, John Deere is one of the most significant heavy machinery manufacturers. However, other companies, such as Caterpillar, Kubota, and CNH Industrial, give tough competition to John Deere.
John Deere must stay on its toes to protect its market position and share from competitors. All these companies that provide substitutes for John Deere's products threaten John Deere.
John Deere SWOT Analysis: Final Word
John Deere is one of the top heavy machine manufacturing companies. It originated in the US in the 17th century. However, over a century and some decades, it has spread its operations in different parts of the world.
Besides increasing its geographical presence, the company innovated and diversified its portfolio. It is incredible to see how a company established in 1868 kept itself relevant and increased its market share.
Since John Deere has such a rich history and impressive operations, we decided to conduct its SWOT analysis today. In this SWOT analysis, we analyzed some of the strengths and weaknesses that the company has.
Other than that, we also discussed what opportunities lie ahead of John Deere and what are some of the company's threats.
After reading this article, we assume you are fully aware of how to conduct a SWOT analysis. This article carried out the SWOT analysis in the form of an essay. However, another efficient way to represent the findings of a SWOT analysis is through a SWOT Matrix or a SWOT table.
At the end of this article, we hope that you will have enjoyed reading it. Moreover, if you have any queries related to SWOT analysis, do look at some of its examples.
