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 75% 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 spent $177 million on advertising in 2012. 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.
Over the last three years, Deere has recognized impressive growth. From 2011 to 2012 its total sales were up by 13% to reach more than $36 billion, its highest total in the last 10 years. The surge in sales was attributed to a 19% increase in its construction and forestry segment operations. The company was also helped in 2012 by a 13% surge in sales from its agriculture and turf segment as a result of higher shipment volumes and improved price realization. Deere's total net income also reached historic heights in 2012, increasing by 9% to more than $3 billion as a result of the higher net revenues.
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. Throughout 2012, Deere expanded manufacturing capacities in plants in Iowa and Illinois.
The company enters alliances to widen its product portfolio and geographic reach. In 2012 it entered an agreement with Topcon Positioning Systems, a maker of positioning products and tools for the global surveying, construction, civil engineering, and mobile control markets. The alliance allowed Deere to sell Topcon's 3D-MC² grade control products on John Deere dozers and motor graders.
Also that year, Deere established a strategic agreement with MacDon Industries Ltd. to better serve John Deere self-propelled windrower customers globally. The deal expanded the John Deere hay and forage product portfolio to better serve dairy, livestock, commercial hay, and small grains customers.