Previously we delved into the SWOT Analysis of Boeing, a researcher and developer of airlines. In the case study, we’ll study the SWOT Analysis of 3M Company.
The 3M Company is recognised for its innovative culture and research and development investments, which have resulted in the development of several new products for both the industrial and consumer sectors.
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Let us study more about the 3M Company, its founding, products, financial state, and rivals before we begin the SWOT Analysis of 3M Company.
About 3M Company
The 3M Company is a multibillion-dollar American multinational business with interests in industry, worker safety, US health care, and consumer products. Under many names, the corporation produces nearly 60,000 goods that are currently in use in homes, companies, schools, hospitals, and other industries.
3M began as a small-scale mining business in Northern Minnesota, by 5 businessmen, then known as Minnesota Mining and Manufacturing Company, more than a century ago. Our goods, which have grown into a worldwide powerhouse, help people all around the world live better lives.
| Founder | Dr J. Danley Budd, Henry S. Bryan, William A. McGonagle, John Dwan, Hermon W. Cable |
|---|---|
| Year Founded | 1902 |
| Origin | Maplewood, Minnesota, US |
| No. of Employees | 94,987 |
| Company Type | Public |
| Market Cap | $103.48 Billion (2021) |
| Annual Revenue | $32.18 Billion (2020) |
| Net Profit | $5.38 Billion (2020) |
Products by 3M Company
Following are the category of products we can find at 3M –
- Safety
- Health care
- Industrial
- Transportation
- Electronics
- Consumer
Competitors of 3M Company
Following are the top competitors of 3M –
- General Electric
- Emerson
- Honeywell
- Corning
Now that we have acknowledged the workings and finances of the 3M company, let’s delve into the SWOT Analysis of 3M Comapny.
SWOT Analysis of 3M Company
The following are the aspects of the SWOT Analysis of 3M Company are as follows:
1. Strengths of 3M Company
One of the leading organizations in the industry, 3M Company has several strengths that enable it to grow within the marketplace. These internal factors help to protect the company market share. Here are some strengths of 3M Company –
- Acquisitions – Complete track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated a variety of technology companies in the past 4 or 5 years to streamline its operations and to build a good supply chain.
- Strong Dealer Community – Distributors and dealers market the company’s products and engage in sales training so that customers may understand how to get the most out of the items.
- Skilled Workforce – The workforce of highly skilled trainers through successful training and learning programs. 3M Company is investing massive resources in the training and development of its team and employees resulting in a workforce that is highly skilled as well as motivated to achieve big.
- Good Returns on Capital Expenditure – 3M Company is comparatively successful at execution of latest projects and generated good returns on capital expenditure of the company by building new revenue streams.
- Powerful Brand Portfolio – From the past 3 or 4 years 3M Company has invested in building a powerful brand portfolio. The SWOT analysis of 3M Company just highlights this fact. This brand portfolio is often extremely useful if the organization wants to enlarge into new product categories. In short, 3M company has high brand awareness and strong brand quality in the market.
- Finance and Distribution – 3M Company has powerful free cash flows that provide resources in the hand of the company to enlarge into new projects. Over the past few years, 3M Company has built a good distribution network that will reach most of its potential market.
2. Weaknesses of 3M Company
Weaknesses are internal factors recognised throughout the study of SWOT. Strategies are a decision made action and weaknesses are the strategies where 3M can improve using SWOT analysis.
- Days inventory – This is more compared to the competitors, making the company time take a position within the channel and raise more capital to invest in the channel. This impacts the long term growth of the leading Company.
- Demand Prediction – The company is not very good at product demand forecasting, this results in a high rate of missed opportunities compared to its competitors. One of the most important reasons why the day’s inventory is more compared to its competitors is that 3M Company is not good at demand forecasting; this ends up in high storage of inventory, both in-house and in the channel.
- Research and Development Investment – Despite spending more on research and development than the industry average, 3M Company is unable to compete in terms of innovation with the industry’s leading competitors. It appears to be a mature company looking forward to releasing goods with market-proven features.
- High attrition rate – In comparison to other companies in the sector and market, 3M Company has a greater attrition rate and must spend more on training and development of its employees than its rivals.
3. Opportunities for 3M Company
These are external elements that are advantageous to the brand’s image and sales. Recognising and taking an initiative towards potential opportunities is an important task for all companies. Following are opportunities 3M is presented with –
- New environmental policies – The new environmental opportunities will make a level playing field for all the competitors within the industry. It seems an excellent opportunity for 3M Company to take advantage of new technology and gain great market share within the new product category.
- Product Portfolio Expansion – Competencies of a firm can lead to success in similar domains of other items. A comparable example would be GE healthcare research, which aided in the development of improved oil drilling machines.
- Rising Technology – The new technology provides an opportunity for 3M Company to practice a differentiated pricing strategy within the new market. It will enable the firm to take care of its loyal customers with great service and lure new customers through other value oriented propositions.
- Reduction in transportation costs – Decreasing the value of transportation due to lower shipping costs can also bring down the cost of 3M Company’s products thus providing an opportunity to the company – either to increase its profitability or pass on the benefits to the customers to gain great market share.
4. Threats to 3M Company
Last, in the segment of the SWOT Analysis of 3M Company, we analyse its Threats. These are external factors that pose disruptive to the company’s structure, future and ongoing plans. Following are some of the major threats 3M is exposed to –
- Nation Specific Laws – Laws in different countries are different and 3M Company may be exposed to various liability laws and claims given changes in policies in those markets.
- Lack of new products – Various goods have been produced by the corporation over the last few years, however, they are frequently answers to the development of other rivals. When new goods are not being delivered on a regular basis, resulting in high and low swings in sales over time.
- Isolationism – The increasing trend toward isolationism in the American economy can lead to similar reactions from other governments thus this trend negatively impacts international sales.
With this, we reach the end of this study on the SWOT Analysis of 3M Company. Let’s briefly analyses and conclude the contents of this case study.
Conclusion
The 3M company is gaining popularity and is an important competitor in the market to look out for. Amidst the constant competition, they have been able to become the market leader. The 3M company enjoyed a dominant position in the past due to its tech, but lately, it has been overshadowed by its competitors as they were able to successfully adapt to the new medium. From this, we can say a company’s success depends on marketing strategies and new, trending innovation. And for this, any company needs a professional in marketing and digital marketing.
3M will reap not only from the budget-friendliness of digital marketing, but will also increase brand awareness through multiple channels such as SEO, emailing, content marketing, and social media marketing.
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