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John Deere

By: Tyce Covey, Nathan Taylor II, Devyn Begley, Misael Parra

BUS 100

December 5, 2018
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Abstract:

Our paper will be evaluating the state of John Deere’s stock market value, and trying to

convince the reader to invest into the shares. Throughout the paper, my team and I list several

factors leading up to our final conclusion of ultimately investing into the company. Some of the

factors we elaborate on include but are not limited to: an introduction, a brief history, a look at

the company’s leadership, innovating contributions, a look into their sales, stock, and revenue,

and many more. We also used many viable resources in our research. These sources include but

are not limited to John Deere’s quarterly reports, as well as the history of their stock prices

provided by the NYSE website. By the end of the paper our goal is to have a convincing

argument as to why investing a hundred thousand dollars into John Deere should be considered a

wise investment.
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Intro:

John Deere has been an international agricultural powerhouse that has dominated much

of the farming industry for the better half of the 20th Century. Founded in 1837 by John Deere,

the company has grown from its humbling beginnings in Moline, Illinois to having multiple

manufacturing distribution centers across the nation. Investing 100,000 dollars into one company

is never that great of an idea but, John Deere should be the company to invest in because it is

universally known to be the dominating producer in the farming industry. The companies

innovations have exceeded expectations annually, which leads our team to the conclusion that

John Deere will be a profitable investment in due time.

History:

John Deere’s rich history is deeply rooted in to Moline, Illinois. Moline is where John

Deere first started his company and bringing products to the market. Deer picked Moline because

of it’s advantages of coal, water power, and cheaper transportation. When John Deere started his

company, he started it with a few of his fellow blacksmiths back in 1837. Also in 1837 John

Deere brought their first product to market, this product was successfully the first self-scouring

metal plow used for the fields. By 1841 Deere was producing 100 plows a year. In the 1850s the

company was producing at least 1600 plows a year and soon other products would be brought to

the market. In 1858 John Deere retired and passed the company on to his son which was only 21
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years old at the time. Later in the 1800s they also brought the first gas powered tractor to the

market. With this John Deere is showing great efforts that the company will do great things. The

Jumping dear that is on all of John Deere logos was a trademark that was put through U.S. Patent

Office in 1876. John Deere’s name was originally John Deere Blacksmiths. Later it was changed

to what it is now called John Deere Manufacturing. As seen today John Deere has grown from

this small company in Moline to a multimillion dollar and multinational company.

Leadership:

John Deere has benefited greatly from the many fantastic CEOs and management leaders

that have each brought their own unique sense of quality and purpose to the company. Starting

with John Deere laying down the foundational footsteps leaders should follow with bringing

integrity, quality, and commitment to a healthy organization. Currently, the sitting President and

CEO is Samuel R. Allen. He has been at the helm of the organization since 2009, and in 2017,

the net income of the company jumped 12 percent up to 29.74 billion dollars. In 2017 also

generated a total Shareholder Value Added of 1.25 billion dollars. These growths have only

pointed towards strong signs of investment opportunities for investors looking to make money

over time, rather than a quick buck.

Innovation:

John Deere is committed to keeping their products up to date with the most modern

technology. They are able to do this because of the Technology Innovation Center that they

developed in 2008. The main goal of the Technology Innovation Center is to create solutions to

real world problems that the farmers are having. They do this through engineering and

information technology to drive the environment of collaboration and innovation. John Deere
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always try to improve their equipment, every year when equipment is released there is always

some type of new improvement. Sometimes it is a whole new product other times it is as simple

as different styles of seats that make it more comfortable for farmers. Nevertheless John Deere is

always innovating their equipment and products. This is beneficial because it keep the company

update date with what's going on and what farmers want, and need. Also it keeps the company

ahead of their closest competitors, giving them an advantage in the marketplace. They are able to

have this advantage because of their commitment to keeping their products at the top of the line

through innovation.

Sales, Stock, and Revenue:

Over the last year John Deere has done over 29.76 billion dollars worth of sales and the

fourth quarter has just started. The total amount of profit this year is 2.3 billion dollars which is a

twelve percent increase from last year. This is a fantastic demonstration on how the company is

doing and how successful they are. As one can see the company is growing and continue to bring

in high levels of profit, this is a good indicator that John Deere is a healthy and stable company.

John Deere became being publicly traded company in the 1900s. The opening stock price for the

company was $5.46 a share. From this point on Deere’s stock price has only gone up. John

Deere’s stock price hasn’t shown any signs of stopping any time soon. The stock market goes up

and down all the time but this never really affects John Deere. The price of John Deere only

fluctuates a couple dollars if that. Since 2008 John Deere stock has gone up a complete 100

dollars. The stock price has been slowly increasing over the years it has been traded and it will

continue to do so. The average volume of the market shares is 2.56 million shares. John Deere

has a market cap value of a little over 45 million dollars.

Loyalty and Charity:

John Deere’s brand equity is always maintaining its spot at the top simply because

everyone knows that the color of tractors is widely considered to be green. As well as just the

color, owners of John Deere products have a sense of pride and compassion when they’re asking

about their tractors or farming equipment. There is a notion of excitement when owners of the

products get to elaborate on their product choices. Many people even advertise owning a John

Deere product, and receive compliments as well! Usually people who buy the John Deere green

products never switch. This type of brand equity is also comparable to companies such as Apple.

People who own Apple products usually swear by the product that it is top of the line, and

simply, the best. Another reason people are very proud of owning their products is because of

how dignified John Deere is. They host annual events such as the John Deere Classic. Annually,

John Deere affiliates and charitable people attend this golf event that last year alone raised a little

over 12.3 million dollars. This year will be it’s 48th annual Classic, and they’re looking to

surpass a 100 million dollars in total donations. This charitable attitude and immense integrity

results in great loyalty from customers, which translates to brand equity. All positive signs for

hopeful investors.

Artificial Intelligence:

Artificial intelligence plays a major part in the agriculture world. AI helps farmers

become more efficient, produce more, become more environmentally friendly, and saves them

thousands of dollars. With the agriculture industry being a 300 billion dollar contributor to the

United State economy it is important for farmers to be able to save money here and there. This is

because at the end of the year and as the industry as a whole, AI saves millions of dollars. AI
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helps farmers manage their time better and get more down with less input. As one can see that AI

plays a huge role in the agriculture industry. John Deere takes advantage of this by having some

of the best agriculture AI systems in the world. The company spent over 300 million dollars on

artificial intelligence research. Every new piece of equipment has an option to come with a gps

system call the Starfire. This is an AI system that can take control of the piece of equipment and

operate it to precision. This saves the farmers thousands of dollars and also saves on the amount

of man hours it takes.

Technology:

John Deere is taking major steps towards the world of technology. Mobile apps are on the

rise and going to be a huge deal in farming. The farmer is going to be able to take a sample of

their soil and get the information from the sample. This information is then uploaded to the

mobile app called MyJohnDeere. When the app gets this it can then tell the farmer when is the

best time to fertilize, harvest, and water his crops. John Deere also provides their construction

customers with a technology to help them out too. This technology is called John Deere

WorkSite. John Deere WorkSite is easy-to-use technology that will help to optimize uptime,

machines, and job sites. With this technology any size construction company or job can use to

help their work. The technologies that John Deere WorkSite helps with is the health of the

machines, programing and remote diagnostics, payload weighing, and grade control. All of

theses technologies help increase the job effinicey of any job or company that uses them. Also

the people that use John Deere WorkSite can get the most out of their equipment. John Deere is

trying to get every one of their products to have some type of technology to help improve the

customer's profits and job effinicey.

Ethics:

John Deere is one of the world's most ethical companies according to the ethisphere

institute, ​ ​a global leader in defining and advancing the standards of ethical business practices.

The listing by the Ethisphere Institute is in its 11th year and Deere is among only 13 companies

that have been named each year to the honor. The approach is weighted into five key categories:

ethics and compliance program, corporate citizenship and responsibility, culture of ethics,

governance and leadership, innovation and reputation. John deere provide advanced products and

services for customers whose work is linked to the land - those who cultivate, harvest, transform,

enrich and build upon the land to meet the world's dramatically increasing need for food, fuel,

shelter and infrastructure. They invest in their local communities around the world, embrace

strategies of diversity and inclusion, and focus on the long term as a sustainable business

advantage. Which all comes together to create and help John Deere be one of the world's most

ethical companies for so long.

Management Style:

John deere has a management style that is classified as divisional, where it is helpful for

this type of business. This management style enables and helps John deere incorporate it’s

companies core values of integrity, quality, commitment and innovation. They are organized by

eight total divisions. These divisions include agricultural, construction, turf, forestry, financial

services, power systems, parts services, and intelligent solutions. Organizing their businesses in

this manner gives each division the advantage of concentrating on the needs of their particular

industry. The disadvantage of this type of business structure would have to be that it is expensive

to hire duplicated personal for each division. It can also lead to divisions not sharing ideas if
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they are competing against each other. John Deere doesn't seem to have too much of a problem

with this because they are organized by industries. Forestry generally doesn't have to much to do

with agriculture and vice versa. This prevents the divisions from competing for the same

customers. Some of these divisions are there just to support other divisions. Which is helpful

because it creates new and innovative ways to help increase the value.

Conclusion:

To conclude, John Deere is a fantastic company to invest in for multiple reasons. The first

of which being that the company has been in business since 1837 and is still thriving today. This

is a good indicator that the business is secure and is healthy. Another indicator that the company

is healthy and successful is how the stocks are doing and how there net income is. As listed

before the revenue is up 26% this year from last year and it continues to be on the rise. John

deere is able to maintain being on top of the market because of their ability to innovate their

products and introduce new features to go along with the products. John Deere's employees are

held to very high ethical standards making the company a great environment to work in. John

Deere's management style is also on the highest level it allows you to start at the bottom and with

hard with and dedication you can grow as the company grows, a great example of this is the

current ceo Sam Allen. He started at the bottom and now runs the company, this is a good

example of how the company does not hold you back and lets you grow. John Deere is also

about giving back to communities through their charitable donations. One event that is held

annually raised over 12.6 million dollars for charity and the company holds many events every

year. With that being said we believe that John Deere is a fantastic company overall but, more
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importantly we believe that it is a good company to invest your money in. This because the

company has proven to be stable, healthy, and continuing to grow.

References

Deere, J. (2017). Technology Solutions. Retrieved December 11, 2018, from

https://www.deere.com/en_US/services_and_support/technology-solutions/technology-so

lutions.page

John Deere. (n.d.). Retrieved December 11, 2018, from

https://www.deere.com/en/our-company/about-john-deere/strategy-and-core-values/

John Deere. (2018, May 18). Retrieved December 11, 2018, from

https://www.deere.com/en/our-company/news-and-announcements/news-releases/2018/corporate

/second-quarter-earnings/

John Deere. (2018, November 21). Retrieved December 11, 2018, from

https://www.deere.com/en/our-company/news-and-announcements/news-releases/2018/co

rporate/fourth-quarter-earnings/

The AI and machine learning innovations taking John Deere to the next level of precision

agriculture. (n.d.). Retrieved December 11, 2018, from

https://www.iottechnews.com/news/2018/mar/22/ai-and-machine-learning-innovations-tak

ing-john-deere-next-level-precision-agriculture/