John Deere Components Works Case Study
John Deere Company is one of the world's largest manufacturers of farm equipment, and a major American manufacturer of forestry and lawn and grounds care equipment. At the time this case study was conducted, John Deere Component Works (JDCW) product demand was taking significant losses because the deterioration of farmland and commodity values.In the 1980’s demand for JDCW products declined precipitously because of the agriculture crisis and decreased exports arising from the high value of the U.S. dollar. According to the case study, Keith Williams, manager for Cost Accounting Services for Deere and Company was aware of the inaccuracies of the current costing system for the current state of the company (I am unable to decipher this sentence). He had already been looking into some other alternative ways for more JDCW began exploring alternatives to the current costing system effective costing methods to be able account for how Deere and Company was currently doing business so that divisions such as JDCW could become more cost effective, and then would be in an effort to improve their competitiveness in the bidding process. Mr. Williams was able to use the poor outcome of JDCW bids as an excuse to fuel a study to come up with and to possibly develop a more effective and accurate cost system for JDCW’s Gear and Special Products division.
In order to assess the level and strength of competition within the industry of John Deere Component Works (JDCW) and its strategy to address this competition, Wwe can use the Porter’s five forces model of Competitive Strategy to examine the competitive environment. As described by Michael Porter’s , the five major forces are: Supplier power, Buyer power, Threat of substitute, Threat of new entry, and Competitive rivalry.
First of all, in the case of JDCW, the suppliers are not clearly identified in the case study....