CULTIVATING CORE COMPETENCIES
Name Roll Nos.
Divya Ramdas 03Ruchika Chhabra 06Bonaventure D’souza 07Teena Gunt 17Anita Shah 43Teresa George 61
GROUP 7
PEDAGOGICAL OBJECTIVES
To examine the working of 3M, a company with diversified business presence
To investigate the company from the Strategic point of view with looking meticulously through the strategies it has set in flow of dynamic external and internal environments of the company
To learn from the company’s growth strategy how it generated growth, maintained margins and managed the product portfolio
BACKGROUND – 3M 3M Company , nicknamed after Minnesota Mining and
Manufacturing Company, is an American multinational conglomerate corporation based in Maplewood, Minnesota and was formed in 1902 by five businessmen.
The 3M Company is one of the largest manufacturers in the U.S which has been well known for its innovation and R&D.
3M at a Glance (Year-end 2009) Global sales: $23 billion. International (non-US) sales: $14.6 billion (63 per cent of
company's total). Operations in more than 65 countries. 3M products sold in nearly 200 countries. 75,000 employees globally.
3M – BUSINESS SEGMENTS
Consumer and Office Business
Display and Graphics Business
Industrial & Transportation Business
Health Care Business
Electro and Communications Business
Safety, Security, and
Protection Business
CASE CONTENTS
The case provides an extensive definition of 3M's core competency, which is
based on its invention and manufacturing capabilities to solve and deliver
unique solutions for industrial and commercial customers. The company's
technology platforms hold together its diverse business activities.
According to Buckley, 3M's fundamental core competency is in applying
coatings to backings, processes which were both developed internally. He
identified six competitive platforms giving 3M an edge over its competitors: Low cost Scale and relative share Customer value chain Pristine service Premium brands
3M – STRATEGIC INITIATIVES & INTERNAL CAPABILITIES
3M's successful past is a critical component to planning future strategic
moves. The following strategic initiatives and internal capabilities have
been instrumental in securing past successes for 3M:
Developing technology-oriented solutions to satisfy customer needs.
Filling market niches. Abandoning markets where desired prices (and margins) cannot
be maintained. Generating a high percentage of sales from new products. Establishing and fostering a culture of Innovation.
ATTRACTIVENESS OF EXTERNAL ENVIRONMENT OF 3M’S VALUES
3M has strong brands that are recognizable in almost every part of the world.
Satisfy its customer with innovative technology and superior ,value and service.
Provide its investors an attractive return through sustainable ,global growth.
Respect its social and physical environment around the world.
Value and develop its employees diverse talent,
innovative and leadership.
3M’S – SUSTAINABLE COMPETITIVE ADVANTAGE
Its competitive advantage derives from thecompany's practice of cooperatively sharing technology across operations, brands, marketsegments, and regions.
Referred to as the 3M Lattice, the unique business model is a competitive advantage that offers a steady stream of groundbreaking product opportunities inadjacent businesses where less obvious applications are discovered
3M – SWOT ANALYSIS
Strengths
• Strong R & D Capability • Diversified Business Portfolio • Robust Industrial Business
Weaknesses• Weak Personal Care Segment • Low Margins in the US• High Health Care Cost
Opportunities• Growing Demand for LCDs • Acquisitions of Brands • International Expansion
Threats• Growth in Private Labels • Higher Oil Prices • Exchange Rate Fluctuations
TANGIBLE
Formidable organizational culture One of the first R&D department Patent purchasing in 1921 Multinational company
INTANGIBLE
Invention Superior technology platforms Superior manufacturing process capabilities Know-how
VALUE CHAIN
3M’S CORE COMPETENCIES & VALUE CHAIN
3MS – PROBLEM STATEMENTS
The recent problems that this company face with and
new CEO should try to figure out them are :
Apply unrelated strategy and Make a little, sell a little so this strategy leading to complex supply chains and costly logistics between operations.
They lost their sales growth opportunities where it was readily available by continuing using past strategy
Downsizing Down scoping
Knowledge Management
Vertical Acquisition
Related Diversification
More Niche Market
IMPROVE PERFORMAN
CE AND PROFIT ABILITY
3M – THE NEED FOR RESTRUCTURING STRATEGIES
RECOMMENDATIONS
3M should continue to focus in the following areas:
Brand image (problem solving) First mover (innovation) Leadership in technology Economic of scope Continuing launch six sigma Lack of dependent on the market Customer involvement in innovative process
Thank you!