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Regarding John Deere tractors: does anyone have insight as to why a competitor with more lenient repair rules hasn't shown up to save all the farmers?

COGlory 5y ago
Probably because most farm equipment is a multi generational purchase
- quickthrowman 5y ago
  I would wager that most farm equipment is sold to large corporate farms, they just want the machines to work and don’t mind paying Deere to fix them.
mcguire 5y ago
A new company? Two words: capital intensity. Production of industrial machinery like farm equipment requires massive factory infrastructure with significant supply chains. Getting the capital together for that is hard enough, but then the new company would be competing against the established John Deere, with the added (perceived, if nothing else) handicap of lenient repair rules. An existing competitor to John Deere? I suspect it is for the same reason that sedans are essentially indistinguishable, style-wise: operating in the same environment (aerodynamics, interior volume and shape, etc. on one hand, the legal and cultural background on the other), they have all struck on the same optimizations, which include repair restrictions. Now, if one does decide to try the alternative, and makes significantly more profit, you'll see a fairly rapid state change as most of them switch.
- dredmorbius 5y ago
  Capital. Supply chain (inputs). Distribution chain (sales). Familiarity (brand awareness). Interoperability (ancillary equipment, PTO connections, fittings, etc.) Market position and power takes time to be established. It takes time to shift. Even under extreme negative pressure (that is, "loyalty" is due far more to lack of alternatives than genuine delight or satisfaction) collapse can be a long time coming. And that's before anticompetitive pressures are brought to bear (e.g., exclusive contracts or threats of retaliation against any of the above).
stonemetal12 5y ago
There are easy to repair competitors like kubota. It is just JD still has a lot of name recognition and "Buy American" and all that.
pchristensen 5y ago
I don't remember the details, but this podcast goes into pretty significant depth - https://www.listennotes.com/podcasts/business-breakdowns/john-deere-centuries-of-k2lbO3V-ZHi/ https://www.listennotes.com/podcasts/business-breakdowns/joh... Lots of moats - financial, reputational, generational, technological, branding, performance, distribution, etc.

COGlory 5y ago

Probably because most farm equipment is a multi generational purchase

quickthrowman 5y ago
I would wager that most farm equipment is sold to large corporate farms, they just want the machines to work and don’t mind paying Deere to fix them.

mcguire 5y ago

A new company? Two words: capital intensity. Production of industrial machinery like farm equipment requires massive factory infrastructure with significant supply chains. Getting the capital together for that is hard enough, but then the new company would be competing against the established John Deere, with the added (perceived, if nothing else) handicap of lenient repair rules. An existing competitor to John Deere? I suspect it is for the same reason that sedans are essentially indistinguishable, style-wise: operating in the same environment (aerodynamics, interior volume and shape, etc. on one hand, the legal and cultural background on the other), they have all struck on the same optimizations, which include repair restrictions. Now, if one does decide to try the alternative, and makes significantly more profit, you'll see a fairly rapid state change as most of them switch.

dredmorbius 5y ago
Capital. Supply chain (inputs). Distribution chain (sales). Familiarity (brand awareness). Interoperability (ancillary equipment, PTO connections, fittings, etc.) Market position and power takes time to be established. It takes time to shift. Even under extreme negative pressure (that is, "loyalty" is due far more to lack of alternatives than genuine delight or satisfaction) collapse can be a long time coming. And that's before anticompetitive pressures are brought to bear (e.g., exclusive contracts or threats of retaliation against any of the above).

stonemetal12 5y ago

There are easy to repair competitors like kubota. It is just JD still has a lot of name recognition and "Buy American" and all that.

pchristensen 5y ago

I don't remember the details, but this podcast goes into pretty significant depth - https://www.listennotes.com/podcasts/business-breakdowns/john-deere-centuries-of-k2lbO3V-ZHi/ https://www.listennotes.com/podcasts/business-breakdowns/joh... Lots of moats - financial, reputational, generational, technological, branding, performance, distribution, etc.