Question

Summary of 3M Where Innovation Is A Way Of Life

Answer 1

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What company is one of the most innovative brands in the world with locations in over 60 countries across the world, with a global sales total of $31.8 Billion, their products being sold in nearly 200 countries, and with just shy of 90,000 employees globally? Well there’s only one answer: 3M (3M. n.d.). 3M is a Mining and Manufacturing Company from Minnesota that is a global powerhouse with more than $31 Billion in annual sales 3M’s portfolio consists of hundreds of brands in many different industries.

They sell more than 50,000 products in close to 200 countries, across many different industries These industries including office products, construction, telecommunications, electronics, health care, aerospace, and automotive. Some of their products are some of the most recognizable products from the most recognizable brands.

The number one thing 3M excels at is creating innovative products. They put a lot of emphasis on research and development (R&D) in their company. 3M considers innovation to be central to its vision and strategies and has steadily increased its investments into R&D . 3M is one of the only companies who allow employees to dedicate 15% of their time at work to new product developments. This illustrations 3M has a systematic new-product development process.

They are supporting this with a very large financial commitment, with about 5-6% of their sales to research and development. They’re also supporting it by giving their employees that 15% time during the work week to develop and work in any project they’d like. 3M is successful due to their system they have in place, and that system is a part of their corporate culture.

A customer centered new product development process focuses on finding new ways to solve customer problems and create more satisfying experiences . Normally one would start by assessing customer needs, then work backwards to then engineer solutions to fit those customer needs. That is not what 3M does. 3M is more focused on the engineering and design of their products. Instead of looking for customer needs they first develop their product or idea then look for a market where what they made can be useful. 3M tries many different ways to invent new and innovative products.

Some of their most successful products have been developed by accident or put on a shelf for years until someone found a use for it. 3M knows that it might take thousands of tries of different product ideas to hit the new product jackpot. For example, one of 3M chemist’s years go accidentally spilled a new chemical on their sneakers, and days later came to realize that the spots that got hit by the chemical didn’t get dirty. This then lead to the creation of Scotchguard Fabric Protector .

Another example of an accidental jackpot is when a different scientist tried to develop a super-strong adhesive but ended up coming up with an adhesive that didn’t stick very well but did stick long enough till you wanted to peel it off and it didn’t damage what was underneath it. That invention later turned into 3M’s Post-it Notes, a product that is now one of the top-selling office supply products in the world. Some of their “blunders” have turned out to be some of their bestselling products, which continues to make 3M successful. These market-changing products have at times created entirely new industries for 3M to dominate.

3M’s product portfolio is both a blessing and a curse. They have their fingers in many different industries. Which means some industries can be down while others are fine. This requires a lot of attention and resources, but just shows 3M’s financial strength. Their growth rate is steady in the lower single digits. Their product life cycle must include a portfolio management strategy. If their life cycles are managed in isolation they won’t take in to account, the effect one product has on another.

They should also focus on product development. 3M doesn’t keep their products up to date, they don’t often update them. This is because new product developments are risky, and they can’t afford to launch something that might fail. 3M must be prepared for the unpredictability that comes with launching a new product, even if they believe they have all of the information they need. This is because a products life might be limited, and they don’t want to put a lot of time and money into something that might fail because if one industry on their portfolio is failing they will rely on the other industries and their products to pick up the slack in profits.

During product development, sales are zero, and the company’s investment costs add up . Every product goes through several life cycle stages, and each stage in the cycle poses new challenges with different marketing strategies. Growth is a period of rapid market acceptance and increasing profits. Their CEO is committed to increasing profits, so 3M must come out with good products to keep up their long-term focus of sales growth. One stage of the product life cycle 3M doesn’t have to worry about is decline. Some of their products are the most popular and well known in the world, which will continue to allow 3M to innovate new products without much of a second thought.

I believe that there are limits to how broad 3M can expand its product portfolio. Even though 3M’s current CEO Inge Thulin has a plan to focus on higher profitable products, he has also has put a focus on lower priced items. 3M has many different companies under its umbrella. Thulin believes you can’t have all high-priced items or items that take up too much shelf space because shops won’t carry your products. Therefore, this makes 3M’s CEO realize that retailers want to purchase different products for different industries from one brand.

Thulin believe that retailers will purchase some higher priced products that take up space in a retailer’s shop, and some smaller lower priced items. There are two ways that a business can succeed with new products segmenting their market correctly, so they have customers for their product, and promoting their product the right way to consumers and make it easy for them to obtain the product. 3M is very good at these because they are in over 200 different countries with thousands of different products for every demographic. If they do decide to keep expanding their portfolio I would recommend they manage their portfolio effectively, so they don’t miss anything that could cost them a significant amount of money.

I believe that it is possible for 3M to maintain a steady growth rate and profitability. Even though their competitors have higher growth rates as them, such as, Google, Apple, Samsung, and Amazon. These companies come out with one revolutionary product after another, and it would be hard for 3M to match that. However, 3M has shown for many years they can keep a steady growth rate of around 5.8% and will continue to do that for many years to come. 3M’s 20% profit margin is something they have achieved for the past 57 years. What’s sustained 3M is their long-term dedication to invent new products, and technologies.

If their next “big thing” satisfies their target market it will then enter a healthy growth stage and cause their sales sky rocket. If they direct a portion of their sales on product improvements, and promotions for the product they can capture the market with their product and be unstoppable. 3M is one of the only companies that has sustained its growth decade after decade, and there’s no reason why that won’t continue for another 57 years.

Works Cited

Armstrong, G., Kotler, P., & Opresnik, M. O. (2017). Marketing: an introduction (13th ed.). Boston: Pearson.

Living Better Media. (n.d.). Product Life Cycle Challenges. Retrieved March 20, 2018

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