3M company business strategy
The company 3M is a diverse company that was incorporated on June 25, 1929 with presence in more than 10 industries alone. “3M products are sold through a number of distribution channels, including directly to users and through wholesalers, retailers, jobbers, distributors and dealers in a range of trades in a number of countries worldwide” (“3M Co,” n.d., para. 1) The company head quarters is located in St. Paul Minnesota, however 3M has locations all over the United States. 3M is best known within the consumer industry with brands such as Post-it, Scotch, Scotch-Brite, Filtrete, O-Cel-O, Nexcare, and Command. “3M is one of 30 companies in the Dow Jones Industrial Average and also is a component of the Standard & Poor’s 500 Index.” (“3M Company Information,” n.d., para. 2) As of 2013, 3M has more than 35 business units, managed under five business groups which are consumer, electronics & energy, health care, industrial, and safety & graphics. (“3M Co,” n.d., p. 1) 3M has over 87,000 employees worldwide and continues to increase sales and net income. Business Summary- 3M
“3M was founded in 1902 at the Lake Superior town of Two Harbors, Minnesota by five businessmen set out to mine a mineral deposit for grinding-wheel abrasives. But the deposits proved to be of little value, and the new Minnesota Mining and Manufacturing Co. quickly moved to nearby Duluth to focus on sandpaper products.” (“3M Company Information,” n.d., para. 1) After years of struggling, new investors came in and moved the company to its current headquarters of St. Paul Minnesota. “Early technical and marketing innovations began to produce successes and, in 1916, the company paid its first dividend of 6 cents a share.” (“3M Company Information,” n.d., para. 3)
“The Industrial and Transportation segment serves a range of markets, such as automotive original equipment manufacturer (OEM) and automotive aftermarket (auto body shops and retail), renewable energy, electronics, paper and packaging, food and beverage, and appliance.” (“3M Co,” n.d., para. 3) The products within this segment includes tapes, adhesives, filtration products, and adhesives as well as “Scotch Masking Tape, Scotch Filament Tape and Scotch Packaging Tape; packaging equipment; 3M VHB Bonding Tapes; conductive, low surface energy, hot melt, spray and structural adhesives; re-closable fasteners; label materials for durable goods; and coated, nonwoven and micro-structured surface finishing and grinding abrasives for the industrial market.” (“3M Co,” n.d., para. 3) The healthcare segment includes units such as medical tapes, dressings, a range of surgical tape. “Dental and orthodontic products include restoratives, adhesives, finishing and polishing products, crowns, impression materials, preventive sealants, professional tooth whiteners, prophylaxis and orthodontic appliances. In health information systems, 3M develops and markets computer software for hospital coding and data classification, and provides related consulting services. 3M provides food safety products for food processors to test the microbiological quality of food.” (“3M Co,” n.d., para. 3) “The Consumer and Office segment serves markets that include consumer retail, office retail, home improvement, building maintenance and other markets. Products in this segment include office supply products, stationery products, construction and home improvement products (do-it-yourself), home care products, protective material products, certain consumer retail personal safety products, and consumer health care products.
Consumer and office products include Scotch brand products, such as Scotch Magic Tape, Scotch Glue Stick and Scotch Cushioned Mailer; Post-it Products, such as Post-it Flags, Post-it Note Pads, Post-it Labeling & Cover-up Tape, and Post-it Pop-up Notes and Dispensers; construction and home improvement products, including surface-preparation and wood-finishing materials, command adhesive products and filtrete filters for furnaces and air conditioners; home care products, including scotch-brite scour pads, scotch-brite scrub sponges, scotch-brite microfiber cloth products, O-Cel-O Sponges and scotchgard fabric protectors; protective material products; certain maintenance-free respirators; certain consumer retail personal safety products, including safety glasses and hearing protectors; and nexcare adhesive bandages.” (“3M Co,” n.d., para. 4) “The safety, security and protection services segment serves a range of markets for the safety, security and productivity of workers, facilities and systems. The product offerings include personal protection products, cleaning and protection products for commercial establishments, safety and security products (including border and civil security solutions), and roofing granules for asphalt shingles, corrosion protection products used in the oil and gas pipeline markets, and track and trace solutions.” (“3M Co,” n.d., para. 4) “The display and graphics segment serves markets that include electronic display, traffic safety and commercial graphics. This segment includes optical film solutions for liquid crystal display (LCD) electronic displays; computer screen filters; reflective sheeting for transportation safety; commercial graphics sheeting and systems; architectural surface and lighting solutions; and mobile interactive solutions, including mobile display technology, visual systems products, and computer privacy filters.
The optical film business provides films that serve numerous market segments of the electronic display industry. 3M provides products for five market segments, including products for LCD computer monitors, LCD televisions, hand-held devices, such as cellular phones and tablets, notebook personal computers (PCs) and automotive displays. In traffic safety systems, 3M provides reflective sheeting’s used on highway signs, vehicle license plates, construction work-zone devices, trucks and other vehicles, and also provides pavement marking systems.” (“3M Co,” n.d., para. 5) “The electro and communications segment serves the electrical, electronics and communications industries, including electrical utilities; electrical construction, maintenance and repair; original equipment manufacturer (OEM) electrical and electronics; computers and peripherals; consumer electronics; telecommunications central office, outside plant and enterprise; as well as aerospace, military, automotive and medical markets; with products that enable the efficient transmission of electrical power and speed the delivery of information.
Products include electronic and interconnect solutions, micro-interconnect systems, high-performance fluids, high-temperature and display tapes, telecommunications products, electrical products, and touch screens and touch monitors. (“3M Co,” n.d., para. 6) “Its electronic and electrical products include packaging and interconnection devices; high-performance fluids used in the manufacture of computer chips, and for cooling electronics and lubricating computer hard disk drives; high-temperature and display tapes; insulating materials, including pressure-sensitive tapes and resins; and related items” (“3M Co,” n.d., para. 7)
3M is a great company and sustains a competitive advantage due to the number of products offered to a diverse industry. 3M’s core competency is based on the fact of its invention and manufacturing capabilities that deliver unique solutions for both industrial and commercial customers. They have the ability to target both types of consumers. The company’s technology platforms hold together its diverse business activities. Its competitive advantage derives from the company’s practice of cooperatively sharing technology across operations, brands, market segments, and regions. 3M uses a unique business model called the 3M Lattice. “This competitive advantage offers a steady stream of groundbreaking product opportunities in adjacent businesses where less obvious applications are discovered. This competitive advantage is a sustainable advantage in that it meets the qualifications for sustainability, possessing capabilities which are valuable, rare, costly-to-imitate, and non-substitutable.” (NCSU, n.d., p. 4)
3M’s worldwide sales totaled $29.9 billion dollars at the end of 2012, with international sales totaling $19.4 billion. International sales make up 65% of total sales (3M Performance, 2012). Operating income in 2012 was 21.7 percent of sales, compared to 20.9 percent of sales in 2011, an improvement of 0.8 percentage points (3M Performance, 2012). Net income totals at 2012’s yearend were $4.4 billion dollars, which was 4.9 percent of sales. The diluted earnings per share equaled $6.32 (3M Performance, 2012). According to filings reported with the Securities Exchange Commission, four of the 3M’s six business segments showed growth in sales, led by Industrial and Transportation at 14.3 percent, Safety, Security and Protection Services at 9.4 percent, Consumer and Office at 6.1 percent, and Health Care at 5.4 percent.
The filings further explain that a slowdown in electronics-related businesses negatively impacted both the Electro and Communications and Display and Graphics business segments and that as a result Electro and Communications sales decreased 2.7 percent and Display and Graphics sales declined 8.8 percent. Sales declined 17 percent in optical systems (part of the Display and Graphics segment) impacted by end-market weakness and lower attachment rates in LCD TVs (SEC, 2012). The company operates globally and has over 88,000 employees. 3M has received numerous awards over the years. In 2013, “3M has received 13 awards from international institutions for design excellence in areas ranging from consumer products and packaging, to health care and workspace.” (“3M Company Information,” n.d., para. 12) “3M was also named among “The Top 20 Best Companies for Leadership” in a study conducted by global consulting firm The Hays Group. The list ranks companies for leadership around the world and examines how those companies nurture talent and foster innovation in their organizations. According to the study, the best companies for leadership are purposeful and strategic in developing, enabling and motivating leaders throughout the organization to do their best.” (“3M Company Information,” n.d., para. 1)
3M Co. (n.d.). Retrieved from http://www.reuters.com/finance/stocks/companyProfile?symbol=MMM.N 3M Company Information. (n.d.). Retrieved from http://solutions.3m.com/wps/portal/3M/en_US/3M-Company/Information/Profile/Performance/ Http://solutions.3m.com/wps/portal/3M/en_US/3M-Company/Information/Profile/Performance/ Http://www.sec.gov/Archives/edgar/data/66740/000110465913010881/a13-1203_110k.htm#Item1_Business__122819. North Carolina State University. (n.d.). www4.ncsu.edu/…/8-Case%20notes–3M.doc