Agco s Strategy
... Ratliff’s strategy is building a company by acquisition of companies that could not survive in the environment (John Deere and New Holland becoming larger and larger) and that fit the portfolio – meaning agricultural equipment, lawn and garden machines · R’s vision is to become industry Nr.1 · Marketing o Selling point of Agco products is price o multi-brand company under one color but keeps original brand name (Massey Ferguson, Deutz, Gleaner, White, New Idea, Allis-Chalmers) o full line of products- tractors, combines, small machines (hay, seed) lawn and garden equipment o According to dealers Agco is the competitive company in the industry and the savior of the industry · Finance o To be able to sell cheaper - cutting cost heavily · HR o Buys companies and fires many white color managers that do not perform (‘slashers’); decision within 20 min interviews · Manufacturing o 50 percent in-house manufacturing, 50 percent outsourcing – unusual for farm equipment industry o less capital investment on assembly equipment o less capital investment on facilities o Agco is an assembler not a manufacturer · R&D o Agco only spends 2 percent on R&D while competition spends 4-6% o Agco is quick follower not first mover o Agco is copier not technology innovator Looking at the information given in the article Ratliff has a very clear strategy (mainly coming from his experience at International Harvester).