Question

Be sure to include a cover page and References page for this assignment.

For John Deere company, perform a SWOT analysis using Microsoft Word. You must identify at least three strengths and weaknesses and identify at least 4 opportunities and 4 threats. You must provide reasoning for your strengths, weaknesses, opportunities, and threats.

Strengths

Weaknesses

Opportunities

Threats

Answer 1

Strengths of John Deere

As one of the leading companies in its industry, John Deere has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of John Deere are –

• Highly skilled workforce through successful training and learning programs. John Deere is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

• Highly successful at Go To Market strategies for its products.

• Automation of activities brought consistency of quality to John Deere products and has enabled the company to scale up and scale down based on the demand conditions in the market.

• Good Returns on Capital Expenditure – John Deere is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

• Strong Free Cash Flow – John Deere has strong free cash flows that provide resources in the hand of the company to expand into new projects.

• Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.

• Successful track record of developing new products – product innovation.

Weakness of John Deere

Weakness are the areas where John Deere can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

• Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.

• Limited success outside core business – Even though John Deere is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

• High attrition rate in work force – compare to other organizations in the industry John Deere has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.

• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, John Deere needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.

• There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.

• Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of John Deere.

Opportunities for John Deere

• New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for John Deere to drive home its advantage in new technology and gain market share in the new product category.

• New trends in the consumer behavior can open up new market for the John Deere . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

• Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for John Deere in other product categories.

• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for John Deere to capture new customers and increase its market share.

• Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.

• The market development will lead to dilution of competitor’s advantage and enable John Deere to increase its competitiveness compare to the other competitors.

• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as John Deere to increase its profitability.

• New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for John Deere. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Threats

• Rising raw material can pose a threat to the John Deere profitability.

• No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.

• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of John Deere

• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.

• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories.

• Limitation of the counterfeit and low quality productis also a threat to John Deere’s product especially in the emerging markets and low income markets.