3M: Minnesota Mining and Manufacturing - Research Paper Example

Introduction: 3M is an American based multi – national company which specializes in a diverse and broad range of products ranging from adhesives,chemicals to electronics, safety and security systems. Previously known as Minnesota, Mining and Manufacturing, the company has an extensive community outreach plan with outstanding human resource building programs which has inspired me since a long time. That is why I have chosen to write my paper on this company. 2. Analysis of Business Environment: 3M has a very diverse product spectrum which is being marketed in developed countries of America, Europe and Asia. The markets are highly competitive with the greatest challenge posed by the local industry in the countries. The world is passing through a recession period and the fluctuating exchange rates add to the woes of financial leadership of the company. 3M earns more than 60% of its revenues from outside USA. This implies that the business operations has to be modified to suite the local laws and traditions outside USA. Most of the European countries have more strict environmental regulations than USA. To conform to these rules, a lot of research effort has to be put in. This, along with reducing production costs and integrating supply chain with other operations, is by far the greatest technical challenge that the company has to face. 3. Founder: 3M was co-founded by Henry S. Bryan, Hermon W. Cable, John Dwan, William K. McGonalge, and Dr. J. Danley Budd. The company was originally founded to mine aluminum ore and supply it to the abrasive industry in USA. Later it was found that the business based only on its mining operation could not be run as a profitable enterprise. Hence, they decided to enter in to the abrasive manufacturing themselves. Later, it was found that the moisture content in the abrasive stones is causing the products to lose their strength with time. The founders of 3M took a bold decision to bake the abrasive stones in order to remove the moisture thereby taking first R&D initiative in the history of the organization. Such moves marked the establishing of an organizational culture which prevails in 3M till now. In the changing market scenario, 3M has the ability to adapt itself to achieve highest standards of quality and customer satisfaction and at the same time ensuring reasonable return on the investments to its share holders, all this through a strong R&D department. Hence, the values set by its founders has guided 3M towards becoming one of the leading multi-national with one of the most diverse products and services spectrum in the world. 4. Ethical Behavior and Social Responsibility In the changing global scenario in which the world is concerned about the issues of global warming and increasing use of materials and processes which are dangerous for the environment, 3M is committed towards meeting needs of its customers through sustainable development. This implies adopting environment friendly processes in production and logistics hence making sure that the resources are conserved for the future generations as well. Moreover to ensure environment friendly practices, 3M has adopted a strategy in which the suppliers and contractors from which 3M buys raw materials and equipments for its plants are prequalified and only those companies are listed as suppliers which have adopted environmental friendly and sustainable practices. Most of the 3M products involve processes which traditionally make extensive use of hazardous chemicals. 3M takes responsibility of these processes and makes sure that industrial wastes are duly processed to avoid any harmful effects on the atmosphere. 3M is investing heavily in the research to find out alternative manufacturing processes to ensure the conservation of environment. The CSR program of 3M has incorporated various strategies to ensure the growth and development of each and every individual associated with it. Holding high the principles of integrity and honesty, 3M believes in satisfying the customers through innovative technology and high quality services. 3M does not only serve its customers but also ensures valuable return to for its investors through its sustainable growth. Considering its employs an asset 3M believes in channelizing the benefits of organizational success and growth towards its employees and gives them a sense of recognition in the form of rewards and employ development program which helps the employees to develop various innovative technical skills and in this way the company has earned appreciation and respect in all those associated with it worldwide as shown by the various awards it has won worldwide which include Pollution Prevention Excellence Award in 2005 by USEPA and the climate group’s Low Carbon Leaders Award. 5. Summary of Products and Services 3M is a global multinational organization which manufactures a large variety of products ranging from detergents and paper products to electronics items. Founded in 1916, it is currently operating in more than 60 countries and supplies consumer oriented products in various different regions of the world. Marketing Plan: The companies marketing strategy comprises different steps, of which first is addressing the market need, most of the 3M products actually filled a vacuum. 3M utilizes its research laboratories to come up with innovative solutions to various problems present in daily life of customers being in office or at home. In this way 3M products do not have to face competition in the beginning and easily overcome competition later as they are well established. Moreover various features of 3M products perform far better than advertised which increases the trust of the customers in the brand. Industry: 3M operates in various different industrial sectors which include electronics, healthcare and safety, manufacturing, transportation, office and household use items. Differentiation of Products and Services: The various products offered by 3M have diverse competitors which include GlaxoSmith Klein in healthcare and medicine to Avery and Staedler in household and office items. In various regions of the world it also has to face competition from the local manufacturers and brands in manufacture industry and safety and security products. Products delivery and distribution: As 3M operates in more than 60 countries of the world and has a wide variety of products and services to offer, its delivery and distribution strategy is highly flexible and is localized in nature. 3M has established its manufacturing plants in various different regions of the world from where the products are distributed through regional and local distributors. 6. Financial Analysis: During the period of recent global recession, 3M has shown good financial commitment and has maintained reasonable growth and return on investment for its share holders. Analysis of Ratio: 3M has a gross profit margin of 52% which is a reasonable figure and shows the efficiency of 3M production facilities, supply chain and sales department. It has a total debt to equity ratio of 0.34 which is a reasonable figure in the present global scenario. Net sales have dropped from $25.1b in 2008 to $23.4b in 2009. Still the dividend paid per share has risen by 2% to $2.04 per share. Investment Opportunity: I shall recommend investing in 3M seeing its good performance despite poor economic conditions prevalent globally. 7. SWOT Analysis: A brief SWOT analysis of 3M is presented here. Strengths: 3M has one of the world’s most diversified business profiles with more than 40,000 products and brands and operations spread in more than 65 countries backed by an ever strong R&D department. A huge consumer base serves to protect company’s interests during the periods of local economic recession. Weaknesses: Due to its ever increasing products lists, the company has lost focus on some of its key products which form the back bone of the annual turnover. Increasingly competitive market environment may lead to a significant decrease in market share if resource allocation is not revised. The company has small inventory turnover (4.2) which results in low profitability of some of its products. Opportunities: Growing health care and security budgets of common US households may result in a market growth for 3M products. Moreover, newly emerging markets south and south-east Asia have an increasing appetite for the premium tier products manufactured by 3M. Threats: Most of the 3M production facilities have to face increasingly strict environmental rules and regulations. 3M has to invest heavily in the R&D segment in order to modify and improve the existing manufacturing practices. Conclusion: 3M is one of the World’s largest multinational companies. Diversity being its specialty, 3M has a broad product and service spectrum and its operations are conducted in more than 65 countries around the world. 3M invests heavily in its human resource and R&D activities and contributes generously towards its CSR initiatives. How efficiently the whole enterprise is coordinated is what makes 3M, in my opinion, a unique organization. Works Cited 3M Annual Report 2009. 3M Corporate Headquarters, St. Paul, USA. 3M Company – 2010 Sustainability Report. 3M Corporate Headquarters, St. Paul, USA. 3M in the United States. N.p., n.d. Web. 1 May 2011. . Fine, Lawrence G. The SWOT Analysis. N.p.: Create Space, 2009. Print. Gibson, Charles H. Financial Reporting and Analysis. Eleventh. Mason: South Western Cengage Learning, 2009. Print. Read More