AIP 4.15 Heavy Equipment Strategic Planning Johnson Industries is a US manufacturer of heavy equipment used in road building, forestry, and construction. Although the firm has been successful in these areas, it is looking to expand into other businesses. Farm equipment is considered a possibility; in particular, the company has designed a combine for harvesting wheat. The combine uses a rubber track rather than wheels as a means of locomotion. The rubber track has the advantage of less pressure on the soil and, therefore, less soil compaction. The track also has better traction on hilly fields. The track-driven combines, however, are more difficult to transport on major roadways. Six varieties of wheat are grown in the United States but they can be categorized generally as either winter or spring wheat. Winter wheat is planted in the late fall and is harvested in the spring. Spring wheat is planted in the spring and harvested in summer. The following table indicates the number of bushels of wheat grown in the top 10 wheat-growing states in 2012. State North Dakota Kansas Montana Washington South Dakota Idaho Minnesota Oklahoma Number of Bushels (millions) 393 255 190 183 130 117 104 93 76 73 Colorado Nebraska The management of Johnson Industries estimates 5,000 new combines are sold each year in the United States for the harvesting of wheat. Management has developed the following analyses of the competition and potential customers. Analysis of Competition Two other major competitors currently offer product lines of combines. Jones Farm Equipment works through agriculture co-operatives and provides a low-cost line of combines with prices ranging from $150,000 to $250,000 each. Its combines have less capacity, power, and longevity than does the product designed by Johnson Industries. The combines normally are serviced through the co-operatives. Jordan Manufacturing produces a line of combines comparable to the machine designed by Johnson Industries in terms of capacity, power, and longevity. Its combines currently do not have tracks, although rumors exist that the firm is thinking of such a product. Jordan Manufacturing has an extensive network of dealership and service units throughout the wheat-growing areas. Its combines sell for prices between $200,000 and $300,000 each. Customer Analysis Customers for wheat combines fall into three major groups: (1) travelling crews who