3m Company Analysis Strategic Management and Decision Making

3M Company Analysis

Tommy Hughes

American Intercontinental University

March 2018

Abstract

Surviving in the business realm takes education, dedication and team work.  A successful business did not become so by lazy and sloppy work.  Putting together a successful business takes a team of dedicated persons who strive to create an environment beneficial to all involved. This means many aspects of the business and the environment must be taken into consideration for all pieces involved.  A business is built upon those who support it, whether as employees, stakeholders, owners or the customers.  The business world can be harsh are all resources, laws market situations and technology must be studied and applied to the strategy of the business to become successful.  

3M Company Analysis

        One of the most analyzed and successful businesses of today is the 3M Company.  “3M’s ability to keep churning out new innovations is very much dependent on the company’s long-standing commitment to open innovation, both internal and external”, as stated by Holman, Baker and Jaruzelski (2011).  3M has a very diversified product base that extends to many work environments in the world today.  They are able to reach out to many people on many levels and provide a product relevant to each field.  3M is a company that was founded in 1902 in Minnesota.  As of today, 3M has companies operating in at least 65 different countries (Corporate Office, 2013).  3M uses science in many different ways to create products that help to improve lives.  

        We will begin to look into the internal and external components of 3M and how the company has become so successful.  This report will serve as an analysis of the company and look into the strategies and other pieces of the business.  3M offers its products in a wide range of industries.  Some but not all of those industries 3M takes part include; industrial, safety and graphics, electronics and energy and health care (MarketLine, 2018).  3M is able to offer a large variance of products to these industries such as tape, safety products, medical supplies, dental supplies, electronics and packaging.  

        3M is not the only company to provide products to the industries it thrives in.  Other companies such as ABIOMED, Inc. and Becton, Dickinson and Company keep competition in the medical industry alive.  Looking at NasDaq (2019), 3M remains the leader in the Teflon industry with not many companies even close to them.  One competitor that tops 3m in the manufacturing of Teflon is The Chemours Company.  According to IBISWorld (2019), The Chemours Company controlled 42.9% of the market while 3M only obtained 30.8% and other manufacturers accounted for 26.3%.  The IBIS recognizes The Chemours Company and 3M as the only major players in the particular industry.  

        Another industry where 3M continues to be the powerhouse in the manufacturing of personal protective equipment.  3M is expected to grow even further in this market over the next few years.  3M holds a 29.6 percent market share over the competitions.  The next closest competitor is Honeywell International Inc. who only holds a 25.9 percent market share (IBISWorld, 2019).  IBIS (2019) recognizes several key factors for success in this industry.  Undertaking technical research and development is one of those key factors.  This factor required a company to invest heavily in research and development.  Doing this will create larger opportunities for the company to strengthen products and expand the market to help create a new revenue (IBISWorld, 2019).

        3M bases their success on their Value Model.  The Value Model is what 3M sees giving their company differentiation and an edge in the marketplace.  The Vision of 3M is what drives everything they do; 3M Technology Advancing Every Company, 3M Products Enhancing Every Home, 3M Innovation Improving Every Life (3M, 2019).  3M recognizes and utilizes their strengths across the world to help maintain their success. There are four keys strengths that 3M sees and focuses on.  Their advancements in technology and their ability to access and innovate new ideas allows them to harness their unique capabilities in process engineering.  Those two strengths just add to their global capabilities.  With such a large and wide spread company, they are able to spread new technology and products at a rapid rate to customers all over the world.  The biggest piece to these strengths would the brand that 3M has established and made known world-wide.  Being successful and being able to put that success with the brand helps consumers around the world to recognize this company and the products they put out.

        To stay successful in this business environment you have to not only look at getting started and maintaining the current environment, but you also have to look long term into the future and pay attention to the market, technology and consumers need changes that take place.  Doing this takes strategic management and decision making.  Strategic planning is seen as the senior management makes decisions that ultimately maximize the shareholders or owner’s wealth while maintaining a thought on long term maximization (A.I.U. 2019).  3M strives to maintain their position as a powerhouse in the markets they are in and look to become a part of.  Four priorities are what 3M sees as the focal point that will provide that long-term growth and value creation.  Those four priorities are Portfolio, Transformation, Innovation, and People and Culture (3M, 2019).  The first three are what are seen as the foundation moving forwards.  Their focus on the people and cultures is what will support their value model and keep them successful in the ever changing world (3M, 2019).  

        Risk is a big part of any large business structure and venture.  The Board is charged with overseeing the company’s risk profile and management’s processes for assessing and managing risk.  Board committees may be assigned specific or other important categories to oversee for risk management.  The company Auditor will periodically assess risks in certain parts of the company and seek council with the executives who are responsible for that particular piece of the company.  The management of the company are not free from audit themselves.  The Audit Committee will periodically evaluate the performance of the Vice President and General Auditor to ensure they are functioning in their positions in best interest of the company.  This serves as a sort of checks and balances systems where things are monitored internally and corrected as seen fit.  

        To move up in the company as a manager looking to be a CEO or other senior manager, you have to do your job and please the board.  Senior managers are assessed annually for their potential to move up to the position of Chairman/CEO or other senior manager positions.  Through this process they are able to maintain records of the successes and faults found during each annual assessment.  Doing this annually help them to decide who the best person would be for any upcoming vacancy spots in a senior management position or for the CEO.  This pushes the management to continually strive to improve and be better as a form of competitiveness with promotion as a reward.  

        Much of the success of a company can be attributed to a SWOT analysis.  SWOT, or strengths, weaknesses, opportunities and threats, is an analysis that helps a company to see the good and bad and what to keep and what to change.  SWOT is an in depth look at the internal and external environment of the company that helps to identify the strengths, weaknesses, opportunities and threats (Words of Wisdom, LLC., 2015).  3M is a company that knows this to be a vital factor in their success.  The company SWOT analysis for fiscal year 2018 is indicated as posted below:

Strength - The biggest strength 3M has going for it is its strong brand name.  The brand name has made the company known word-wide as a leader in its markets.  One of the most widely known brands of 3M is the Scotch brand.  It would be safe to say every business that uses office products or even shipping products has some form of Scotch brand tape, stick it or post it notes or other product in their basket of tools.  Scotch is also a strong brand in the PPE market where respirators, filters, safety glasses and other items are popular.  Having a strong brand helps to extend and introduce other brand and line extensions (3M, 2019).  

        Another strength of 3M is their presence across the globe and a balanced revenue.  According to MarketLine (2019), the company is able to operate in 80 facilities in 29 states in the United States.  They also are operating 125 manufacturing and converting facilities in 37 other countries outside of the United States.  So their ability to be available all over the world gives them an upper hand over other competitors in the same markets.  

        R & D or Research and Development are key factors in the success of any business.  3M uses their constant research and development to improve many factors of their business.  They constantly look to improve their current products as well as enhance their manufacturing and production methods.  This is also used to find ways to improve all services (MarketLine, 2019).