3M Case Study
3M was originally founded in the year 1902. The company was initially named Minnesota Mining and Manufacturing Company. This company produces a wide range of products like tapes, laminates, advanced materials, abrasives, films – paint protection films, window films etc., filtration and adhesives under different brand names. Some of the brand names under which this company sales its products are Post-It, Scotch Brite, Command, Filtrete, MicroTouch, Littmann, CUNO, Cogent, Aqua-Pure, Clarity, ScotchBlue, Nexcare etc. The five major business arenas that govern 3M in the market are Safety and Industrial, Healthcare, Electronics and Energy, Transportation and Consumer. During the early 2020s, the company was actively operating in 70 different countries across the globe, making profit in around 200 countries. The company manufactures 60,000 miscellaneous products. In 2020, 94,987 employees were working in the company. Even under the crippling grip of the pandemic, the company had made revenue of 32.18 billion. The credit goes to the solid foundation of the business model of 3M. The company initiated with extracting corundum in the early 20th century to globally selling a conglomerate of products that no industrial institution can conceive of. 3M has practically seized the market. In 2019, 3M faced a decline in the automotive and electronics market in China. However, according to the annual report of 3M, “3M maintained operating margins of 22%, even while reducing inventory levels by $370 million – which reflects the strength of the 3M model.” You might use plagiarism checker tool to check the duplicacy of the content
- In 2020, Financial year ending 31stDecember 2019 – $ 32.1 billion (Year-over-Year growth is -1.9%)
- In 2019, Financial year ending 31stDecember 2018 - $ 32.8 billion
- In 2018, Financial year ending 31stDecember, 2017 - $ 31.7 billion (Year-over-Year growth is 5.1%)
In 2020, the major ownership of 3M was as follows:
- The Vanguard Group, Inc. – 7.48% (equities – 43,350,140)
- SSgA Funds Management, Inc – 5.33% (equities – 30,897,152)
- BlackRock Fund Advisors – 2.23% (equities – 12,932,950)
Sales per region
In 2020, the major sales of 3M based on region of operation are as follows:
- United States – 43.2% ($13,900 million)
- Europe, Middle East and Africa – 19% ($ 6,109 million)
- Asia Pacific – 18.9% ($ 6069 million)
- China / Hong Kong – 10.9% ($ 3500 million)
Sales per business
In 2020, the major percentages of sales per business are as follows:
- Safety and Industrial – 36.6%
- Transportation and Electronics – 27.4%
- Healthcare – 25.9%
- Consumer – 16.6%
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SWOT analysis of 3M
3M was initially a limited-scale mining venture in Northern Minnesota. In 2020, 3M is one of the leading brands in the conglomerates’ market manufacturing approximately 60,000 products and selling them to consumers from a plethora of sectors – homes, businesses, factories, hospitals, educational institution and several other industries. For a mammoth of a company like 3M, it is essential to formulate a SWOT analysis to ascertain the internal strengths and weaknesses and external opportunities and threats that might interfere with the performance of the company. Get 3M United kingdom case study help at Assignmenthelp.us.
The fundamental attributes of the organization which are helpful for the growth of the company are its cutting edge technology platform, highly innovative manufacturing capacities, a range of renowned and reliable brands globally operating under the umbrella company and its international establishment in 70 different countries including countries in Asia Pacific, Middle East and China. Similarly, within organization factors like integrative Research and Developmental capabilities, wide-range product portfolio, rigorous financial sustainability, powerful management and operational bodies, enormous employee capacity, diversified and structured business models, place 3M in a competitively advantageous position. If you are looking for marketing assignment help providers in the United States, consider hiring our service.
A brief SWOT analysis of 3M is discussed in the following section.
- International reach and diversified product portfolio– A variety of products, accounting to more than 60,000, ranging from safety equipments, industrial, healthcare, electronic goods, household goods etc., is produced by 3M. The front-office and back-office footnotes assist in the effective manufacturing, transportation and marketing of its products.
- Pervasively powerful financials– According to the 2021(27th April) first-quarterly reports of 3M, a profit of $8.9 billion has already been incurred, producing an up-scale of 9.6% year-on-year. The organic local currency sale also increased 8.0% y-o-y. The safety and industrial business generated revenue of $3.3 billion and transportation and electronics produced a profit of $2.5 billion. The revenue thus generated in 2021 so far can be contributed to the 3M’s modification in the accounting principle for pension and postretirement cost of plan. Furthermore, by the first quarter of 2021, 3M has paid back $1.1 billion to its stakeholders and have decreased the company’s total debt by 3% and net debt by 5%, reflecting the impact of company’s strong financial grip.
- Prioritizing Research and Development – 3M is religiously invested in scientific research and development of sustainable and marketable products. 3M interconnects business with science and technology by involving renowned scientists across the globe in the annual production of more than 3500 new patents. 3M invests 5.9% of the revenue for research and development. As of 2019, 120,383 patents have already been produced by 3M.
- Providing innovative solutions– 3M have been providing innovative and differentiated advocacy to the business sectors they operate in. In healthcare sector, 3M has succored healthcare experts by managing complications and enhancing patient outcomes. The company’s principle objective is to enrich and uplift the quality of lives of its consumers by providing them equipments with improved safety, environmentally friendly sustainable products and unique technologies.
- Strong business models– 3M business model enables the operational bodies to stay aware of the global megatrends and problems for developing pertinent solutions to them. The key business structure devised by 3M is well-suited for diverse economies as it is based on sustainability, urbanization, modernization and web economy.
- Numerous focal points– With 3M spanning its business across 70 countries, it might become highly tedious to formulate separate business strategies for each economy. Multiple focuses can result to mismanagement and misallocation of resources.
- Litigation issues– 3M got notoriously involved in litigation with U.S government over Combat Arms Earplugs, version 2, which were widely used by militaries resulting in ear damage. In 2018, 3M paid $9.1 million to settle the litigation.
- Strategic tie-ups and acquisitions in high-growth industries - In 2019, 3M announced the acquisition of Acelity Inc., a private medical devices company based in Texas. This acquisition was finalized at a deal of $4.3 billion and it resulted in the addition of surgical wounds and bandages in the products brochure of 3M, adding scale to its already flourishing Medical Solutions business.
- High-demand of healthcare equipments during pandemic – During the pandemic, the demand for N95 respirators had sky-rocketed and 3M invested in the production and distribution of 2 billion N95 masks globally within a period of 1 year. This worldwide demand has been a huge opportunity for 3M to increase collaboration, market value and demand.
- High growth market of electric vehicles – 3M has raised the bar of electrical vehicle battery range by introducing value and design optimized EV batteries to ensure customer satisfaction and scalable solutions. EV batteries have high demand in contemporary market and 3M is innovating EV battery technology.
- New technological introduction by competitors – PPG industries, Chembar, Corning and Honeywell are some of the major competitors of 3M in the market. Market demand of emerging competitors and their technological developments can be major threats to the company.
- Limited skilled workforce – In specific global markets, there is a shortage of skilled and proficient experts, leading to a disrupted flow of profit.
- Lack of regular supply of innovative products – 3M manufactures innovative products to retaliate the competitor’s innovative production. However, the company’s disrupted supply of innovative products can lead to uneven revenue generation.
- United States trade legislation can interfere with company’s business strategies – Imports and exports trade law of the state can disrupt the flow of revenue of 3M. The China U.S trade negotiations can cause impacts from tariffs and inflate 3M’s supply chain.
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PESTLE analysis of 3M
The technique of PESTLE analysis is helpful in the assertion of various relevant factors that might impact the business model of 3M, the trajectory of its growth, market strategy, market value and revenue generation. PESTLE analysis helps to determine the political, economic, social, technological, legal and environmental factors that might influence the business of 3M.
- Amendment of legislature related to trade regulation and tariffs related to industrial goods can hamper revenue.
- Wage legislation related to minimum wages and overtime incentives can increase employee investment.
- The regulations related to mandatory employee benefits can also increase investment.
- Pricing regulatory mechanism for machineries and industrial goods can hamper 3M’s profit.
- Terrorism and military invasions, especially in Middle East, Europe and African areas can directly disrupt the supply flow.
- The economic growth rate of the country in which the business operates will influence 3M’s revenue.
- The exchange rates, structure of economy, rate of inflation, stage of business cycle and stability of the economic system of the operating country will influence profit.
- The unemployment rate of the country of operating will influence employee turnover and production.
- Intervention of the government in the free market can also hamper sale.
- Power gap, hierarchy, class structure of the socio-cultural milieu in which the company operates.
- Attitudes (awareness, modernization, preferences) of the people in the society in which the company operates.
- Undetermined fate of affordable care. Healthcare acts to improve accessibility and affordability can increase costs and decrease the number of healthy young adults enrolling for the scheme.
- Educational levels, transcultural diversity, the level of entrepreneurial mind-set and skill set of the employees of the society will influence production and profit.
- Introducing new technological innovation based on the megatrends and demands of the public.
- Investment in high-growth sectors like equipments of automotive electric vehicles.
- Use of ERP software in business management allows for the provision to collect, integrate, manage and analyze digital data.
- 3M can face legal issues for breaching territorial legislation on industrial waste management and its safe disposal.
- Environmental regulations set by the country in which the business is operating should be thoroughly examined before introducing a new business in the existing market or penetrating a new market.
- Proactive initiatives by 3M to manufacture eco-friendly, recyclable, sustainable products to reduce environmental damage.
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