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Essay: Deere & Co analysis including PESTEL

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  • Deere & Co analysis including PESTEL
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Deere & Corporation was founded by John Deere in the year 1837, based in Moline-Illinois -USA. What first started as a soul agricultural field related company, over the years spread its roots into other sectors such as construction and financial services, it is now termed as a Green and Yellow Corporation for its specialization those specific fields. The company upholds the founder’s core values to date i.e. integrity, quality, commitment, and innovation (MachineFinder, 2013) [17].

John Deere has always been an intense Research & Development oriented company for which they now hold the agricultural equipment market monopoly. As of now, they not only hold control of their equipment hardware but due to technological advancements they are also now the software solution providers for their equipment, thereby allowing them to integrate both and reap economic benefits from the division.

In the business report on the attributes of John Deere, we are going to have a clear overview of the company’s standings and the stiff market competition it faces, by means of various strategic analysis.



a) Target Markets-

  • Agriculture: Deere’s focus market and the flourishing foundation of the company, over which it holds a stronghold.
  • Construction: As the housing and infrastructure need is on an increasing trend, Deere’s construction division is ready and waiting for the customer demands.
  • Marine: John Deere marine engines are powerful, reliable, quiet and fuel efficient with the support network of more than 4000 service locations (John-Deere, 2018) [18].
  • Consumer Satisfaction: This has always been John Deere’s area of concern, the better the customer satisfaction the better sales and returns to be expected.
  • Finance and Retail distribution: offering equipment on lease and providing other financial services like revolving payment-based solutions. Deere also offers its retail program in more than 50 nations.

b) Value Propositions-

  • Brand recognition and standing.
  • Supply quality and reliable products.
  • Global sales and marketing reach.
  • Accessibility and ease of use.


John Deere is led by Samuel R. Allen who is the company’s Chairman, Chief Executive and Chief Operating Officer appointed in the year 2010 and has been pioneering since (John-Deere, 2018) [19]. The company has 11 Board of Directors of which are representatives elected by the shareholders, spanning from Intel, Rockwell Collins to the US Senate Board. The Chairman has 4 subordinates thereby making his span of command as four to whom he is directly responsible, these subordinates are termed as the company leaders to whom the following divisions are answerable for:

  • Agricultural and Turf Division.
  • Construction and Forestry Division.
  • Financial Services Division.

The Organisational structure of John Deere is thoroughly hierarchical/Mechanistic and can be inferred by the following analysis:

a) The Centralization of power is more towards top-level management.

b) The company has Standardized processes for equipment/product manufacturing through-out its plants across the globe thereby leading to componentization.

c) John Deere’s Specializes and is known for equipment manufacturing in agricultural business, ⸫ their area of specialization is very deep but in recent times John Deere has also started to develop in the field of construction and other auxiliary equipment.

d) High Formalization as there are specific procedures, rules, and regulations for individual employees, units /groups and the divisions.


The following are the key strategies adopted by Deere and Co to dominate the market:

a) Market Strategy: They have a global commitment towards 6 key areas- The United States and Canada, Europe, Brazil, Russia, India, and China. It’s in these areas where about 75% of the world’s future growth will occur ⸫ John Deere is uniquely positioned to be the supplier of choice in these regions (John-Deere, 2018) [1].

b) Commitment to Technology: As the day and age progresses John Deere looks forward to bettering its interests in areas of software development for their equipment alongside the hardware thereby prompting them to remain competitive in the market (Blue River Technology, Diagnostic Tools)

c) Equipment Lending: This a unique approach towards the consumer market adopted by John Deere, since the implementation John Deere has become the 5th largest agricultural lenders in the United States. This division has been the leading head in accounts for a full third of the company’s income.

d) Product Diversity: John Deere’s Portfolio of business is varied but interrelated. Two of their main divisions agricultural and construction can take advantage of global growth. Additional business divisions under the company’s belt are Turf, Forestry, Power systems, Parts services, and intelligent services group strengthen and differentiate their equipment business (John-Deere, 2018) [1].

e) Acquisitions: In order to strengthen their market grip, John Deere acquired ‘Wirtgen group’. A German global leader in road construction equipment. Over the course of its establishment, John Deere has a total of 19 acquisitions (CrunchBase, 2018) [2], this has been one of their key success strategies.



This analysis is a perfect tool to identify Deere’s (SWOT)- Strengths, Weaknesses, Opportunities and Threats, this assessment gives a full circle perspective of where the company stands. This identifies what may assist the company to achieve its objectives and what barriers it must overcome to obtain the result.


Carrying out PESTEL analysis for John Deere will provide details of the challenges the company may face.

a) Political Factors:

As it is an established fact that Deere and company specialize in agricultural and construction equipment manufacturers in more than a dozen nations ⸫ it is vulnerable to the various political environment and system risks. Factors to be considered:

  • Political Stability and importance of farm and construction industry in the country.
  • Intellectual property protection
  • Trade regulations and tariffs associated with trading goods.
  • Governmental bureaucracy and interference in the farm and construction industry.

John Deere believes that participating in the democratic political process to advocate public policy enables them to compete fairly and freely in the marketplace, for this reason, they engage in the political advocacy through the following ways: -Corporate public policy programs, voluntary political contribution by employees through the John Deere Political Action Committee (JDPAC) and membership in trade associations (John-Deere, 2018) [10].

In recent days the Deere and Co share jumped by 4.8% after the Trump administration decided to “Compensate the US farmers who stand to lose export business amid escalating trade tensions with China”, this is one of the examples where Deere and Co were benefited by the country’s policy (Brenn, 2018) [11].

b) Economic Factors:

Deere and Co can use the country’s economic factors such as inflations, growth rate and the industrial economic factors i.e. consumer spending… to forecast the growth trajectory of not only the division but the entire organization. Factors to be considered are as follows:

  • Type and stability of the economic system that the country has to offer.
  • Exchange rates and stability of host country currency.
  • The efficiency of the financial market (to raise capital from the local market).
  • Skill level, labour cost, productivity of workforce in the country’s economy.
  • Infrastructure quality in the farm and construction machinery industry.

John Deere is looking forward to doubling its sale earnings of 2010 by 2018 to $50 billion, one of the major areas the company is banking on is Central and South America for the economic growth, especially Brazil with Deere and Co holding about 25% of the market share but due to recession and increase in interest rates the GDP of the country is expected to fall considerably.
Since 20% of the GDP rises due to agriculture these grave scenarios are bound to impinge on the farmers income (Motley-Fool, 2014) [12], thereby the sales of agricultural equipment. This is one of the few economic challenges that John Deere faces.

c) Social Factors:

Shared beliefs and attitude of the population play a great role in how the marketers at Deere and Co understand the customers of a given market and how they design the marketing message for the industrial equipment related customers. Factors to be considered:

  • Class, hierarchy and power structure in the society
  • Education level and standard in the company.
  • Entrepreneurial spirit and broader nature of the society (some societies encourage entrepreneurship while others don’t).
  • The culture of the society under consideration such as gender roles and other conventions.

John Deere’s motto:

“To support higher living standards and a sustainable environment for people everywhere through our commitment to those linked to the land”.

Roles that John Deere has Played in social development (John-Deere, 2018) [14]:

  • Solutions for World Hunger. (Food banks).
  • Education and Community development. (STEM education, LEGO League programs & American Red Cross).
  • Volunteerism (Global volunteerism program: Goal of 1 million volunteer hours by 2022).

d) Technological Factors:

A firm should not only do the technological analysis of a division but also the speed at which it disrupts that division. Slow speeds of adoption will give more time whereas fast speeds may give the firm little/no time to cope and be profitable. Factors to be considered are as follows:

  • Impact of the technology adoption on the company’s product offerings.
  • Recent technological developments by market competitors.
  • Impact on cost structure on the farm and construction division.
  • Technology diffusion rate.

John Deere is one amongst the thousand organizations undergoing obdurate digital technology transformation as it becomes a software company that runs its technology on tractors, rather than the other way around (restricting the farmers to repair their own equipment).

This led to the formation of a Right-to -Repair movement in Nebraska by a group of farmers for mechanized farm equipment (opposing the software-based solutions by John Deere) (Bloomberg, 2017) [15], if this issue is not addressed at haste it may lead the farmers to look elsewhere for the farm equipment which will for sure reduce John Deere’s market shares. This is one among the few technological challenges that the company faces.

e) Environmental Factors:

Before entering a new market or starting a new business in an existing market the firm should evaluate the environmental standards required to operate in these conditions. Factors to be considered:

  • Laws and regulations for environmental pollution.
  • Waste management systems in the industrial goods sector.
  • Acceptance and promotion of renewable energy sources.
  • Weather and climatic conditions of the region.

John Deere’s actions toward environmental protection (John-Deere, 2017) [6]:

  • Sustainable factory design (water reuse, waste recycling/elimination)
  • Energy (reduction of greenhouse gas emission and energy consumption by 15%-end of 2018).
  • Adoption of Blue-River technology (drastic reduction in the use of fertilizers and pesticides).

Last year (2017) Deere has spent more than $2.5 million per day on R&D, this investment in efficiency and technology is paying off for the company, consumers and the environment as Deere’s smallest combine tractors is more efficient & productive than the largest machine just 10 years ago (CTIC, 2018) [8].

f) Legislative Factors:

Careful evaluation of the Legal framework and institution of a country before entering the market is necessary as it may lead to infringement of the organization’s secrets and thus the competitive edge.

Factors to be considered:

  • Anti-trust laws.
  • Copyright, patent/intellectual property laws.
  • Employment, health & safety laws.
  • Data protection norms.

Deere wins Trademark Lawsuit in Protection of Green & Yellow Colours (John-Deere, 2017) [7]:

Following a one-week bench trial in June (2017), the court ruled in favor of John Deere and permanently banned the use of Deere’s Trademark colors by FIMCO, Inc., a South Dakota agricultural spray manufacturer ⸫ Protecting John Deere against Infringement.


  • From the various strategic analysis conducted it can be inferred that what started as an old school purely mechanical oriented agricultural equipment manufacturer is now expanding its reach into more volatile yet beneficiary sectors i.e. technological advancements (software solutions) & Equipment lending, the outcome purely depends on how Deere and Co tackle the barriers and retain their competitive edge in the market.
  • John Deere Prioritises its customers more so ever over other factors by means of their community development and other eco-friendly programs (Blue-River technology) thereby creating goodwill and ensuring the environmental safety.
  • The future for Deere & Co looks to be profitable due to their sheer monopoly over the agriculture and construction division and the amount of time/money they invest in their intense R&D sector. An alternative to increasing their gains is by researching the market in demand and diversifying their product range in that area.


[1] John Deere (2018).” Strategy and Core Values”. Available at: (Accessed: 10 Nov 2018).
[2] CrunchBase (2018).” List of John Deere’s Acquisitions”. Available at: (Accessed:10 Nov, 2018).
[3] Encyclopedia, International Directory of Company Histories (2006).” Deere and Company”. Available at: (Accessed:09 Nov 2018).
[4] Lena Tomaszek (December 03, 2016).” Strategic Analysis: John Deere”. Available at: (Accessed: 10 Nov 2018).
[5] John Deere (2018).” Environmental Stewardship”. Available at: (Accessed: 09 Nov 2018).
[6] John Deere (2017).” Eco-Efficiency Goals”. Available at: (Accessed: 11 Nov 2018).
[7] John Deere (2017),” Deere wins Trademark Lawsuit in Protection of Green and Yellow Colors”. Available at: (Accessed: 09 Nov 2018)
[8] Conservation Technology Information Centre (2018).” John Deere Advances Stewardship in Agriculture”. Available at: (Accessed: 10 Nov 2018).
[9] Philip Case (March 01, 2017) [image],” Electric tractors on UK Farms as Early as 2010”. Available at: (Accessed: 11 Nov 2018).
[10] John Deere (2018),” U.S. Political Contributions and Advocacy”. Available at: (Accessed: 10 Nov 2018).
[11] Jim, Brenn (July 26, 2018),” John Deere Gets a Boost Thanks to Political Intervention…But How?”. Available at: (Accessed: 10 Nov 2018).
[12] The Motley Fool, ICRA (March 20, 2014),” Can Deere Overcome its Current Challenges?”. Available at: (Accessed: 09 Nov 2018).
[13] Michael Rivers (October 24, 2014),” John Deere’s Opportunities and Risks”. Available at: (Accessed: 09 Nov 2018).
[14] John Deere (2018),” Social Responsibility”. Available at: (Accessed: 10 Nov 2018).
[15] Jason, Bloomberg (April 30, 2017),” John Deere’s Digital Transformations Runs Afoul of Right-to-Repair Movement”. Available at: (Accessed: 11 Nov 2018).
[16] VanderMey, Anne (February 25, 2013). “John Deere Plows Ahead “. Available at: (Accessed: 06 Nov 2018).
[17] MachineFinder Blog (October 03, 2013). “A Brief Look at John Deere Combine History: 86 Years of Evolution “. Available at: (Accessed: 06 Nov 2018).
[18] John Deere (2018). “Marine Diesel Engines”. Available at: (Accessed: 10 Nov 2018).
[19] John Deere (2018). “Our Leadership Team”. Available at: (Accessed: 06 Nov 2018).


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