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Brady Shiplet

BUAD 5312 LU01

March 11, 2010

Case 1: 3M: Cultivating Core Competency

Case 1 deals with 3Ms challenge of deriving a strategy to succeed in building the companys core competencies. Thisstrategy should generate growth, maintain premium margins, and strategically manage the companys portfolio all withoutdriving out 3Ms culture of innovation.

PART A: External Environment Factors

3M operates in the following markets: Industrial and transportation; health care; safety, security, and protection services;

consumer andoffice; display and graphics; and electro and communication. The company operates on a global scale in theUS; Europe, Middle East, and Africa (EMEA); and Asia Pacific markets. It is headquartered inSaint Paul, Minnesota, andemploys about 79,200 people.

STRENGTHS:

Diversity across industries and regions protects against demand fluctuations.

Developed many successful niche markets.

Micromanufacturing competency, leveraged across many markets, make it difficult for competitors to beat it.

Innovation, technology, manufacturing capabilities, and know how provide a significant barrier to entry.

Six competitive platforms in order to reach markets: low cost, scale share, relative share, customer value

chain, pristine service, and premium brands.

WEAKNESSES:

Missed second quarter earnings target in 2006. Sent stock tumbling.

Lack of focus on growth of core competencies creates room for entry.

Rising oil prices result in price increases and supply limitations of several oil-derived raw materials.

Mass marketed private brands lower margins for the company.

OPPORTUNITIES:

Build new business on enhanced focus on emerging business opportunities with high growth potential.

Search for disruptive, just out of the garage technologies.

Search for logical developments and extensions of its existing products.

Offer secondary, lower priced brands.

THREATS:

Investors hold company to a higher standard.

Criticism over anemic revenue growth that had slowed.

Retailer increasingly offering private labeled goods at a discounted price.

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PART B: Internal Environment Factors

STRENTHS:

Strong research and development capabilities.

Highly capable scientific, engineering, and manufacturing company.

Ability to manufacture innovative products efficiently and consistently, on a global basis.

Incredible intersegment technology sharing

Revenue spread across six key businesses, healthcare being the largest.

Ability to solve and deliver unique solutions for original equipment manufacturers (OEM) and mass channel

customers.

Ability to extend adjacent knowledge across multiple markets

WEAKNESSES:

Problems in display and graphics business.

Lack of focus on emerging digital technologies.

OPPORTUNITIES:

The remarkable breath of technologies, along with its ability to combine them; help to create a steady stream

of groundbreaking products.

Ability to increase the range of a single technology application. Ex: Adhesive leads to Post-it.

Add digital-oriented competencies over time.

THREATS:

Maturing products cause loss in market share.

Increasing complexity of logistics.

* Each SWOT analysis was derived from preceding analysis and research.