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Brief Excerpt from Industry Overview Chapter:
The US farm equipment manufacturing industry includes about 1,100 companies with combined annual revenue of about $23 billion. Major companies include Deere, AGCO, and the US operations of Netherlands-based CNH (Case New Holland). The industry is highly concentrated: the 50 largest companies generate more than 80 percent of revenue.
Demand for farm equipment is driven by farm income and crop production projections for the next season and can vary highly year to year. The profitability of individual companies depends on the volume of products sold, since many manufacturing costs are fixed. Big companies have large economies of scale, especially in manufacturing tractors and combines. Small companies can be successful by making specialized equipment, especially tractor attachments. The industry is capital-intensive: annual revenue per employee is about $400,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are tractors, self-propelled harvesting combines, tractor attachments, and other equipment used for crop production and farm animal management.
Large companies, such as Deere, AGCO, and CNH, produce a full array of products, while smaller companies generally make a single product line. Production of diesel engines is the major separator between large and small companies, because of the large amounts of capital and expertise required. Large companies have highly automated production lines and make products that can be mass-produced. Manufacturing at the low end consists of assembling parts, bolting, welding, and painting.
Source: First Research