John Deere PESTLE Analysis
Detailed PESTLE analysis of John Deere examining political, economic, social, technological, legal & environmental factors.
Political Factors:
John Deere is one of the leading tractors & farm equipment manufacturers in the world. Since most the decisions regarding agriculture are made by governments, this is an important factor for the company. If the crop produce is not procured timely by the government and private players then it may result in negative impact on farm equipment companies like John Deere. Various government initiatives which are good initiatives to assist farmers, will help the company grow. The company can look to get into partnerships with state governments directly and provide tractors subsidies to farmers to increase the sales.
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This concludes the political factors in the John Deere PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of John Deere:
John Deere is impacted by several economic & financial reforms & parameters. Being a global brand value of currency, trade policies, taxations etc al impact the brand.
Globally Covid-19 was a sudden shock for subdued tractor and other farm equipment demand. If the cashflows remain strong with good produce of crops next year coupled with continuous procurement by public and private players, the farm equipment sales can see a further increase. In India, agriculture is the primary source of living for more than 50% of population. Hence the market is huge but it is a price sensitive market.
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Social Factors:
Following are the social factors impacting John Deere PESTLE Analysis:
The social behaviour of farmers is an important variable for a company like John Deere. Attitude of farmers towards utilizing technology and farming equipment to increase their produce has been positive. With more and more home manufactured farm equipment, the farmers are able to get low-cost farm equipment helping them in cultivating crops. Tractors are being used multiple purposes including irrigation, cultivation and transportation too. In villages, to have a latest technology tractor is seen as a status symbol. The same is applicable for owning foreign brand product.
Technological Factors:
The technological factors in the PESTLE Analysis of John Deere are mentioned below:
John Deere has to constantly innovate its technology to appeal to the customers. Technological advancements like use of GPS, automation, Artificial intelligence, Internet of Things are expected to be introduced in agricultural market in the next 5 years that gives an opportunity to technologically advanced players. Many start-ups in India like Bijak, Clover Ventures, Bharat Agri have come forward to make farmer technologically advanced. This can definitely have a cumulative effect on Farm Equipment industry.
Many companies are coming up with technologies like driverless tractor, electric tractor, use of artificial intelligence to make farm equipment work according to crop and weather can become game changers in the time to come.
Legal Factors:
Following are the legal factors in the John Deere PESTLE Analysis:
Farm Laws reforms can be beneficial for the farm equipment industry as the private players might prefer to focus on technology and mechanization to get higher productivity in place of human labour. However, they might have a negative impact on equipment dealers as the private players may go for B2B agreements to use farm equipment. This might still be positive for farm equipment manufacturers as their market expands. John Deere is also bound by laws regarding pollution & emission levels. These norms define the emission levels of particulate matter (PM), Hydrocarbon, Carbon monoxide etc.
for non-road diesel engines.
Environmental Factors:
In the John Deere PESTLE Analysis, the environmental elements affecting its business are as below:
As the farm equipment industry is dependent on farmers and farmers’ crop depends highly on climate, therefore, climate plays a very crucial role in farm equipment demand. With favourable climate and above average monsoon in 2020, the demand has been growing but one cannot rule a downside in case of an unfavourable monsoon or crop damage due to bad weather in any financial year. Farmers looking for equipment and scientific techniques that can help them in saving crops in difficult climatic conditions.
To conclude, the above John Deere PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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