Deere & Company’s JOHN DEERE FARM EQUIPMENT dominates the North American agricultural market. Its powerful brand is a pop culture staple, licensed on everything from toys to clothing to housewares. Until recently, however, overseas farmers couldn’t pick John Deere green out of a lineup.
After working for almost a decade to change that, Deere is finally seeing big results. In 2002, sales outside of the U.S. and Canada totaled a record $3.5 billion, or nearly one-third of the company’s worldwide total. Deere grew market share in Brazil from zero to 12 percent in just a few years, and continues to see growth in China, where it’s supplying equipment to aid the transition to mechanization.
All this global growth has come at the same time as a “rigorous journey” to become lean and efficient, not only overseas, but at home, says Marie Ziegler, vice president of investor relations. “Two years ago we were not generating adequate returns,” Ziegler says. “Frankly, we did not have a business that was as great as our products.”
So, while pushing for overseas growth, Deere lowered capital costs, cut salaried employees through voluntary early retirement, recentralized functions like purchasing, cut or sold off nonprofitable product lines, and even closed two factories that were only three years old.
With new efficiencies in place, international expansion remains a “top priority,” CEO Robert W. Lane told shareholders at their annual meeting in February. As Ziegler says, “To ensure a successful future, we’ve got to be strong globally.”