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!