Deere & Co. is interested in seeing its customers go to seed and grow. The company, one of the world's largest makers of farm equipment, is also a major producer of construction, forestry, and commercial and residential lawn care equipment. Deere operates through three business segments: the agriculture and turf and construction and forestry segments make up its equipment operations; a credit segment provides financial services. Deere, famous for its "Nothing Runs Like A Deere" marketing, sells John Deere and other brands through retail dealer networks and also makes products for outlets Home Depot and Lowes.
North America accounts for around 60% of Deere's revenue each year. The company owns nine facilities housing one centralized parts distribution center and eight regional parts depots and distribution centers throughout North America. The company also owns three centralized parts distribution centers in Brazil, Germany, and Russia and regional parts depots and distribution centers located in Argentina, Australia, China, India, Mexico, South Africa, Sweden, and the UK.
Deere's largest operating segment is agriculture and turf, which accounts for 73% of revenue. Consolidated into five product platforms -- crop harvesting, turf and utility, hay and forage, crop care, and tractors -- the segment makes such products as loaders, combines, corn pickers, cotton and sugarcane pickers, and even golf course equipment and outdoor power products. Besides John Deere, brands include Frontier, Green Systems, as well as SABO in Europe and Benye in China.
The company's construction and forestry segment represents 18% of its total revenue. Making 90% of the types of equipment used in North America, this segment distributes backhoe loaders, crawler dozers, motor graders, log skidders, and skid-steer loaders.
Besides equipment, the company's other main operational division, financial services, provides credit services for Deere dealers and wholesalers. Other services include crop risk mitigation and extended equipment warranties.
Sales and Marketing
Deere typically spends around $175 million a year on advertising. It operates through roughly 25 sales and marketing locations and nearly 20 warehousing locations spanning 15 countries including Argentina, Australia, Brazil, Chile, China, Ecuador, France, India, Israel, Italy, Mexico, Russia, Spain, Turkey, and the US.
John Deere Water’s products are marketed through a network of 700 independent dealers and distributors in 100 countries. John Deere engines are marketed on a global scale through select sales branches to large OEMs and independently owned engine distributors.
After achieving steady growth over the last three years, Deere saw its revenues drop 5% from $37.8 billion in 2013 to $36.1 billion in 2014. The decline for 2014 was due to dip in agriculture and turf sales fueled by lower shipment volumes partially offset by a spike in construction and forestry segment revenue.
Deere's profits also fell 11% from $3.54 billion in 2013 to roughly $3.2 billion in 2014. This was due to the impact of lower shipment and production volumes, a less favorable product mix, and the unfavorable effects of foreign currency exchanges. The erosion of profits was also fueled by higher production costs primarily related to the impact of engine emission programs in the company's equipment operations.
Deere is focused on enhancing its operations as strong demand for agricultural commodities continues. To keep manufacturing in sync with demand, Deere increases production during the second and third quarters when customers are buying more.
In 2014 Deere made a move to expand in an important emerging market when it opened two new manufacturing facilities in Brazil. Also that year, Deere acquired Auteq Telematica, an onboard software and computer company located in Sao Paulo, Brazil. The acquisition provided the company with additional expertise in the sugarcane market and the ability to develop products and services to help customers leverage the data produced by onboard computers in equipment used for planting, crop care, and harvesting in sugarcane production.