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3MPam Hightower
Devaughn JacksonMatt Sloan
Elitsa Voeva - Kolev
3M - created in 1902 – to make sandpaper
First truly innovative product (masking tape) came out of being on site at an auto-shop
Break tradition of excess management in the invention process – seed money◦ Reflective Tint
Introduce unique aspects of company: ◦ 15% rule, Tech forum, Carlton Society, Challenge
81
Great Depression Foreign Policy with Innovation
History
Efficiency• 1990s shift
from single country to regional
management
• 2001 Six Sigma, Quality control, Internal
Cost Savings
Quality• 1960s
Project Audit Teams
• 2001 Six Sigma Quality control
Innovation• Return 5%
of Profits to R&D
• 15% Rule• 1951 3M
Technical forums
• 1985 Genesis Grants
Customer Responsive
ness• “get
behind the smokestacks” –William McKnight
Functional Strategy
1 2
Differentiation- staying on the edge of the Frontier Curve
Patient Money
Business Strategy
Cos
t Le
ader
ship
Differentiation
Related Diversification- one great product can parent thousands◦ First to use Profit Centers approach for each
Business Unit◦ Maintained Centralized R&D, HR, Finance◦ Added Centralized Sales in 1992◦ Technical Forum of 1951 is used every year to cross pollinate ideas and spur new businesses
Corporate Strategy
1- International- Export
2- Assess the market
Repackage exports to meet economy- Globalization
Begin research and manufacturing based on local resources- Localization
3- Transnational- the GOAL
Global Strategy
Pressure for local responsivenessPre
ssur
e fo
r pr
ice
resp
onsi
vene
ss
Globalization
Localization
International
Transnational
A Progression through the chart
MAIN INDUSTRY
New Technology Development
6 SUB INDUSTRIES:
Health Care
Industrial and Transportation
Display and Graphics
Consumer and Office
Electro and Communications
Safety, Security, and Protection services
Business Description
Porter’s 5 Forces
INTENSITY of RIVALRY Main Industry: LOW Sub industries: MODERATE
THREAT OF NEW ENTRANTS Main Industry: LOW
◦ Capital Intensive
Sub Industries: HIGHo Segmented Industries
BARGAINING POWER OF BUYERS◦ Main Industry: LOW◦ Sub Industries: LOW
BARGAINING POWERS OF SUPPLIERS◦ Main Industry: LOW
3M provides the R&D 3M can buy raw materials from various suppliers
around the world
◦ Sub Industries: LOW The industry is segmented
Porter’s 5 Forces
THREAT OF RIVALS◦ Rivalry is based on:
New Product Development Commercialization
◦ Competitors Honeywell General Electric DuPont Johnson & Johnson
Main Industry: LOW Sub Industries: HIGH
Porter’s 5 Forces
STRENGTHS WEAKNESSES
•R&D capability
•Company infrastructure and
management style
•Diversified business and geographic
presence
•Consistent growth in profits
•Lack of brand recognition
•Poor marketing plan
OPPORTINITIES THREATS
•New acquisitions
•Global expansion
•Rising healthcare spending in the US
•Currency risks
SWOT Analysis
How to increase Shareholder’s Value?
Alternative #1- Increase brand recognition through intensive marketing.
Alternative #2- Continue to increase global their global presence; invest heavily into emerging markets.
We recommend that 3M choice Alternative #2
Recommendations
Excellent Growth Opportunities
3M has Internal Strengths; which will help ensure success◦ Management, Employees, and work culture
Distinctive Competences◦ Research and Development◦ Customer Responsiveness
Pathfinder and Acceleration Programs
Reasons for Alternative #2
Questions
