CULTIVATING CORE COMPETENCIES

GROUP 7
Name Divya Ramdas Ruchika Chhabra Bonaventure Dsouza Teena Gunt Anita Shah Teresa George Roll Nos. 03 06 07 17 43 61

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 companys 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

Industrial & Transportation Business

Electro and Communications Business

Display and Graphics Business

Health Care 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 3MS 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.

3MS SUSTAINABLE COMPETITIVE ADVANTAGE

Its competitive advantage derives from the company's practice of cooperatively sharing technology across operations, brands, market segments, 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 in adjacent 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

3MS CORE COMPETENCIES & VALUE CHAIN

TANGIBLE
INTANGIBLE VALUE CHAIN

Formidable organizational culture One of the first R&D department Patent purchasing in 1921 Multinational company

Invention Superior technology platforms Superior manufacturing process capabilities Know-how

Superior operational process rapid advancements in technology wellaligned to external environment Very intellectual HR in R&D department Good customer relationship (CRM) particularly in recent years Poor management of inventory

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

3M THE NEED FOR RESTRUCTURING STRATEGIES

CORPORATE LEVEL
Downsizing Down scoping Knowledge Management Vertical Acquisition Related Diversification

BUSINESS LEVEL
More Niche Market

IMPROVE PERFORMANCE AND PROFIT ABILITY

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!