Since 1837, the company has continuously achieved high profit and demand.
John Deere’s business outline
In the fiscal year ended September 30, 2017, the company’s equipment operating profit was only about 75% of its total revenue. The remaining 25% of revenue was from the company’s Deere’s Construction and Forestry segment.
The research shows that 60% of John Deere’s sales are induced in the U.S. and Canada only.
Understanding Competitive Advantage
A competitive advantage is what drives a buyer to give priority to one brand over the other. It refers to the aspects that grant a company a competitive edge in manufacturing goods or services.
In a competitive business world, it is important to have a competitive advantage. This means having the best products, services, or ideas available to your customers.
John Deere’s competitive advantage is largely based on its long-running operations and the prudent culture that has been adopted throughout its journey. John Deere’s history dates back to almost 175 years ago, which has helped it stay ahead of the curve in many industries.
John Deere is the leading manufacturer of agricultural equipment, and its biggest competitive advantage is its expertise in agriculture. This strength has helped John Deere maintain a strong market share for many years. ..
John Deere’s different competitive advantages
John Deere has relentlessly concentrated on the advancement and productivity of its customers by always keeping in mind their needs and further investing in the development of its products. John Deere spends over $1.4 billion on only research and development. The Patent Board named John Deere’s as the number one innovator in the heavy industrial equipment industry.
John Deere has a long history of producing quality agricultural equipment, which has helped it maintain a strong position in the agricultural industry. Some of John Deere’s competitive advantages include its durability, reliability, and ease of use. ..
John Deere has a very effective relationship with its independent customers. The dealership has developed a strong relationship within the farmer communities, and many times goes on from one generation to the next. In 2000, 77% of farmers described themselves as brand loyal to John Deere. This is due in part to the dealership’s extended web of distribution, which includes many independent dealers.
The success of the intangible nature of the Farmers brand is due to its large number of loyal dealers. ..
Sustainable Competitive Advantage –
A company’s sustainable advantage is a key factor that contributes to its success and profile. By understanding and exploiting natural resources sustainably, a company can create a competitive advantage over its competitors.
John Deere has a competitive advantage by becoming a cost leader and by differentiating from the rest of the companies in the market. John Deere has a very apparent strategy of differentiating from the competition. The focal point of John Deere’s strategy is providing good quality machines and good quality of service for its customers. A very effective strategy that John Deere follows is of patenting its inventions and ideas and thus making itself the only company with those products and solutions. John Deere is continuously attaining a competitive advantage through copyrights and trademarks. As per marketwatch.com, John Deere was included in the top 100 global innovators in 2012. ..
John Deere thrives on being uptight about searching and innovating better ways for people who work on the land. These strategies and parameters proved that to John Deere, who is known for his stringent standards when it comes to hiring employees.
Effective Bargaining Power –
John Deere has a strong bargaining power with its suppliers. This is because it can control the prices that its suppliers charge for goods it sells.
John Deere has a lot of bargaining power when it comes to its suppliers. The suppliers know that quitting production for John Deere is going to bring a huge amount of loss at their doors only because John Deere is responsible for their huge chunk of sales. Therefore, more bargaining power is in the hands of John Deere. When it is about customers, even in that case, John Deere has more bargaining power. Their innovative products with high quality make it difficult for the customers to bargain for a lower price. The high quality of products and the high quality of services of equipment make customers realize that the prices of John Deere’s products are high.Customers know what they are investing in and what high-quality products they are attaining. That is why the customers have low bargaining power.
Rivals and competitors
John Deere’s competitive advantage comes from its global platform. This allows the company to offer a unique product and service that is not possible for other startups or companies to replicate.
John Deere’s earnings might have faced a slight downfall in recent years because of the less agricultural cycle. Despite all of this, John Deere’s is still standing tall. With the increase in demands and dependency on agriculture, John Deere’s can continue dominating the market as usual.
