John Deere's Operational Strengths: Opportunities and Challenges

Sean Meredith QSO 690: Topics in Operations Management Milestone one: John Deere June 6, 2024

Internal Capabilities and Limitations John Deere has a strong presence in the agricultural world. The company has a diverse portfolio ranging from agricultural equipment, utility vehicles, clothing apparel, and even bicycles. John Deere even manufactures equipment used by the government and military which generates revenue through sales to diverse clients (Momin, 2023). John Deere has four core values integrity, quality, commitment, and innovation, each of which the company practices every day. Products are checked for quality assurance at each stage of production to ensure that the product meets the company’s standards before released to the consumer. The company continues to innovate as John Deere has implemented artificial intelligence through their cloud technology that has been recently implemented. John Deere’s largest limitation is the markets the company has not reached yet. John Deere has more than 30 Locations worldwide, but yet has established a market in the Middle East, countries such as Saudi Arabia and Qatar do not use John Deere Products. The lack of impact that John Deere has in other regions such as the U.S., Europe, and Asia shows a missed opportunity. Business Development Opportunities As previously mentioned, John Deere is not sold in regions such as the Middle East. Establishing a market there will create a new market for the company. John Deere’s focus on global diversification will help increase market share and reduce the risk of investing in only one region (CPP, 2018). This opportunity will create growth in untapped markets while creating growth and jobs from a global standpoint. Cost Saving Opportunities

John Deere's sustainability program, highlighted on their website, underscores their commitment to operational efficiency and competitiveness. John Deere launched a new operating model, the Smart Industrial Strategy which launched in 2020 (Diehn,2023). The implementation of this new strategy focused on technology investment, aligning products and solutions, and increased customer service to their consumers. Through the company’s investment in technology, it will, “customer economic value across the lifecycle in ways that are more sustainable for all” (John Deere, 2021). This strategy will not only create a better product for the consumer but reduce costs in warranty repair costs. They've prioritized sustainability across various domains including occupational safety, product innovation, responsible energy, water usage, and recycling. The company reports that it recycles 75% of their total waste. John Deere has delivered 1.5 million machines that will increase crop protection by 20% while reducing 15% CO2 emissions by 2030 (Birch, 2024). This approach not only aligns with triple bottom line, but also offers opportunity for reduced overhead costs through optimized resource management. External Threat Factors John Deere faces many competitors in multiple markets. When looking at agricultural manufacturing you have Walker Caterpillar, CNH Industrial, Komatsu, and others. John Deere also faces competition in the utility vehicle world with competitors such as Yamaha, Honda, and CF Moto. John Deere must protect their market position as each of these companies is a threat to the company. Inflation has risen almost 9% since 2022, this has been a crucial blow to almost every company and individual in the world (Momin, 2023). Inflation has caused the cost of raw materials to increase, which has caused John Deere’s products to increase in price as well. With

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the increase in price this could result in a decrease in demand for the company. If a competitor can offer a similar product for a lower cost, this could hurt John Deere financially. Managing the Quality Imperative for Global Competition Total Quality Management Although John Deere values employee moral through the companies Enterprise Advanced Marketing Group, a program that surveys employee moral bi-weekly, there is no resources proving that John Deere allows employees to make suggestions or changes on the manufacturing floor (Power, 2016). One area that John Deere could improve their TQM is employee engagement. There are many companies that allow for employee suggestions on how to improve manufacturing operations. These employees manufacture equipment for John Deere every day and can offer insight on how to continuously improve on day-to-day operations. ISO 9000 . John Deere has met and continues to improve on the ISO 9000 Quality Management Principles. The company has always valued the quality that is provided to the consumer. This quality has improved from manufacturing equipment to providing cutting-edge technology through their Leap Ambitions Framework. This technology allows John Deere equipment to connect to the internet allowing “real-time monitoring, remote diagnostics, and predictive maintenance, ultimately boosting efficiency and productivity for farmers (Klaehne, 2023). These technological advancements meet multiple ISO 9000 standards including improvement, process approach, and customer focus. To help further this new process from John Deere, making this service user friendly and offering training on how to integrate the system and show consumers how to maximize its

potential is crucial. If the system is difficult to navigate or the data is not understandable then this will be damaging to John Deere’s reputation. Part of the customer focus principles include measuring customer satisfaction and if the Leap Ambitions strategy does not meet the customers’ needs this will hurt not only value but cost as well.

Reference Momin, Abdul. “John Deere SWOT Analysis: Farming for Success.” Pestleanalysis.com, 19 Apr. 2023, pestleanalysis.com/john-deere-swot-analysis/. “The Benefits of Building a Globally Diversified Portfolio.” CPP Investments , 12 Dec. 2023, www.cppinvestments.com/for-canadian/the-benefits-of-building-a-globally-diversified- portfolio/#:~:text=Investing%20globally%20helps%20us%3A. Klaehne, Maurice . “John Deere: Pioneering the Future with Agricultural IoT Technology – COUNTERPOINT RESEARCH.” Www.counterpointresearch.com , 17 Aug. 2023, www.counterpointresearch.com/insights/john-deere-connected-agriculture/. Birch, Kate. “John Deere Ploughs Sustainable Farming Forward with Cloud.” Sustainabilitymag.com , 15 Jan. 2024, sustainabilitymag.com/tech-ai/john-deere-plows- sustainable-farming-forward-with-cloud. “Nothing Gets Developed like a Deere | Power Connect | John Deere INT.” Www.deere.com , www.deere.com/international/en/stories/power-connect/nothing-gets-developed-like-a- deere/#:~:text=In%202020%2C%20we%20announced%20our. Accessed 10 June 2024. Diehn, Sarah. “John Deere: “We’re a Technology Company.”” InnovationIOWA , 9 Mar. 2023, innovationia.com/2023/03/09/john-deere-were-a-technology-company/. Power, Brad. “Why John Deere Measures Employee Morale Every Two Weeks.” Harvard Business Review , 24 May 2016, hbr.org/2016/05/why-john-deere-measures-employee- morale-every-two-weeks.

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