3M A study of the diversified technology company and its world wide operations
"3M, a $27 billion diversified technology company, was founded as Minnesota Mining and Manufacturing Company in 1902. 3M is based in St. Paul, Minnesota, has over 80,000 employees, produces more than 55,000 products, operates in over 65 countries and serves customers in nearly 200 countries worldwide. It started selling its products outside the U.S. in 1929 and established an International Organization in 1951. Today, over 50% of the company's sales come from outside the U.S. It is one of the 30 companies that form a part of Dow Jones Industrial Average and is a component of S&P's 500 Index as well.
With a healthy mix of businesses that serve a broad array of markets, 3M has established leading positions in 6 business segments viz. consumer and office, display and graphics, electronics and telecommunications, health care, industrial and transportation businesses, and safety, security and protection services. The company represents quality, innovation and reliability which encourages repeat purchases and motivates consumers to try new 3M products. Thermo-Fax copying process, Scotchgard Fabric Protector, Scotch-Brite Cleaning Pads, Post-it Notes and Scotch Transparent Duct Tape are some of its well-known brands.
Since early 2010 there has been an increasing optimism in the global technological industry. Emerging markets are now leading the way instead of developed countries, industries and consumers are migrating to smart products and services, cloud computing and waves of innovation are accelerating.
The key challenges this industrial sector is likely to face in the coming months are:
- Identifying market shifts and having the operational and financial flexibility to respond quickly to them
- Having effective cost containment measures in place
- Making acquisitions and entering into non-traditional partnerships in order to deliver a positive ROI
- Managing innovations, product portfolios and lifecycle
3M's Strategic Focus
To meet the above market threats and capitalize on the opportunities 3M has outlined a 4-pronged business strategy for itself. This consists of:
- Growing the current core business through continuous invention and re-invention
- Actively identify and complete acquisitions that complement the core businesses. These M&As will mainly be in the form of smaller ?bolt-ons' to product lines and geographies that will help 3M enter adjacent markets and build businesses in new spaces more quickly
- Creating several Emerging Business Opportunities (EBOs) units to flourish in high-growth spaces such as track and trace, energy and minerals extraction, food safety and filtration.
- Pumping more money in the developing economies of Brazil, Russia, India, China and Poland in the coming years
With a clear business strategy in place, the company does seem set to give tough competition to its chief competitors Johnson& Johnson, Henkel KGaA, Avery Dennison, BASF SE, and Bostik Inc.