In 1990, Peter Lacey, Graham Drake, and other Deere dealership owners formed Cervus Equipment as a partnership. For the subsequent nine years of operation, the company has achieved a number of objectives. The corporation increased from $56 million to $734 million during the course of nine years. In the company, profit growth outpaced revenue growth. The company's goal is to generate $2.5 billion in sales by 2020. Drake was aware that the organization and business models would need to be stretched in order to reach the aforementioned goal. The above strategy had the capacity of taking them to a new market with new products and services.
Three Factors for a Better Foundation
For the company owners to place a better foundation for their company that would grant them a chance to reach their 2020 target, they adopted three factors. First, they decided to change material ownership positions in the stores. Secondly, they had to improve their relationship with Original Equipment Manufacturer, John Deere. The relationship would provide Cervus Equipment Company an opportunity to purchase dealership with a growth potential. Finally, Lacey and Drake decided to represent premium brands in the market that they served. The combination of the three factors provided an excellent foundation for Cervus Equipment’s businesses together with the growth strategies.
Difficulties with Consolidation
However, despite the great foundational factors, Cervus Company would experience some difficulties having a consolidation with John Deere. First, manufacturers are always uncomfortable having one organization in the dealership. Secondly, Cervus Equipment had already acquired majority of the low hanging benefits from other dealers and now understood major differences. Lastly, John Deere was not ready to enter Cervus Equipment expansion in the United States market. However, the challenges did not hinder them from pursuing their future with the business.
