3M solutions provider for the U.S. market
"3M, a US-based diversified technology company, was established in 1902 and is based out of St. Paul, Minnesota. Today, 3M is a $27 billion company employing over 80,000 people, producing more than 55,000 products and has operations in over 65 countries worldwide.
The company provides a suite of practical solutions in 6 broad business segments viz. Industrial and Transportation, Health Care, Display and Graphics, Consumer and Office, Electro and Communications, and Safety, Security and Protections services. Its product portfolio consists of adhesives, abrasives, laminates, passive fire protection, dental products, medical products, car care products, electronic materials, electronic circuits and optical films.
Key Strengths and Strategic Focus
3M has a strong technological base and serves a broad array of markets that provide it many avenues for growth and cushions it from disruptions in any single market. 3M is synonymous with quality, innovation and reliability and has well-known brands such as Scotchgard Fabric Protector, Scotch-Brite Cleaning Pads, Post-it Notes and Scotch Transparent Duct Tape to its credit.
The company has adopted a two-pronged approach to expand and grow in the current market conditions. While on the one hand it is focusing on its core businesses through continuous invention and re-invention, on the other hand, 3M has formed several Emerging Business Opportunities (EBOs) units to take advantage of high-growth fields such as track and trace, filtration, energy and minerals extraction, and food safety.
The U.S. economy is slowly picking up steam after being hit hard by the global economic recession. The real GDP grew at 3.2% in the last quarter of 2010 and the U.S. industrial sector ended 2010 on a relatively high note. Though there still are question marks on the sustainability of the economic growth in the country, the industrial sector is showing slow, but some growth. The industrial sector has emerged leaner and more flexible after the recession and is looking for ways to accelerate growth through M&As.
Given the tumultuous economic conditions in the U.S. 3M has been slowly shifting its base out of the country. The company's foreign operations have accelerated over the past few years with its international sales accounting for 63% of the annual revenue in 2010, up from 53% in 2001. The company's workforce based in the United States has fallen down from 50% in 2001 to 44.7% in 2010. Its headquarters is now dedicated mainly to planning, R&D, and administration, rather than manufacturing. The company is pumping millions into new factories and R&D facilities in the emerging markets to reduce costs and increases sales and also plans to move one of its 6 divisions outside the U.S.
However, 3M has not completely given up on its business operations in the U.S. and has taken measures to strength its position in the country by acquiring companies such as Cogent, Hybrivet Systems, Ross Outdoor Sports Specialities and Arizant.
The questions is whether the company's move to becoming a truly global company, like many other Dow Jones components viz. Coca-Cola, Honeywell and GE, will be fatal or help accelerate its growth."