3M Strategies: Critical Review

Author: Iloka Benneth Chiemelie
Published: 30 November 2013



0.1 INTRODUCTION

3M has been an outstanding company in the American society and highly acknowledge for their ability towards promoting corporate entrepreneurship. Over the years the company have relied solely staff's innovation towards pioneering 3M as one of the most innovative companies across the globe. They have achieved this success by handsomely rewarding staffs that innovates new products and introducing culture of corporate learning and sharing with the organization.

This article review is meant to take an in-depth look into 3M's business strategies and other factors that have propelled them into an outstanding firm. In other to ensure that the main objectives of this article review are fully achieved, the contents are divided into three different sections.

The first section is a summary of the highlighted article, pointing out the arguable sections and business strategies of 3M over the course of the study on 3M. This section is also meant to present an overview of the overall contents of the article to the reader for better understanding of the applicability in subsequent sections.

The second section identifies both current and future problems faced by 3M and present a theoretical analysis of the major problems. Identifying the problems faced by the company is essential for developing thesis that will be used to resolve these problems.

Finally, the third section is the main body of the article. This section develops thesis to understand the impacts of the highlighted problems on 3M's business strategies and overall business performance. Each thesis is followed suit with recommendations on how to resolve discussed problems in 3M.

After this section, the review concludes with a summary of all the points highlighted in the conclusion and discusses researchable areas in the field as well as the impacts of the review on entrepreneurship skills enhancement and overall study performance.

1.0 SUMMARY OF THE CASE STUDY CONTENTS: 3M'S STRATEGIES

For decades, 3M has been known as an entrepreneurial corporation that pursues growth through innovation and a quarter of its annual revenues are generated from products less than five years old. Innovation was originally encouraged by the owners but this has been transformed into an organizational culture of the years. 3M incorporates six cultured, and these cultures have built up a success history.

The first strategic thrust of 3M fledging business is – get close to customers and understand their needs. 3M started life as an inferior quality sandpaper seller and the only way they could do this is by getting close to the customers, and demonstrates the benefit of their products.

3M's second strategic business thrust involves seeking out niche markets, no matter how small, which allow it to charge a premium price for their products. The company was desperate to compete primarily on price, this lead them to capitalize on their close customer relationship as ways to diversify their products and conquer niche markets.

Following changes in technology and increased competition, 3M developed their third strategic business thrust which is, to diversify into related marketing opportunities that are identified through close relationship with customers. This lead to increased diversification in related products such as the Wetordry™ car polishers which was later diversified into what is known today as Scotch™.

The company's fourth strategic business thrust was developed following the success of Post-It^® note as developed by Art Frye an in-house staff in 1980s. The main aim of this business thrust is to pursue innovation in all level of the organization through research. This increased encouragement for the Maverick research and development of new research laboratories in 3M.

3M has always been admired for it knowledge sharing ability with the organization and the rate of technology integration in producing new products that could be sold in other markets. Such factors were behind the development of Scotchlite™ Reflective Sheeting used for road sings in 1940s. The fifth strategic business thrust - knowledge sharing in 3M.

The sixth strategic business thrust was to encourage achievement through rewards in 3M. To ensure that they keep striving in the market as the most innovative and entrepreneurial corporation, 3M encourage appraisal of achievements in all levels of the company. Successful new products are rewarded and the lead of the innovation made CEO of the new department for specializing in the new product but failure was never punished.

These six business strategies might have their difference weaknesses, but today, 3M has been able to lead the product innovation company through these strategies and continued to practice corporate entrepreneurship for over a century.

2.0 PROBLEMS IDENTIFICATION

According to the above summarized case study, 3M faces many challenges today to maintaining its reputations for innovation. These problems include:

1. As it becomes larger and more complex with different products and technologies, at different stages of their life cycle they face managerial problems, because different products will require different managerial process to be well implemented.
2. The "Maverick" high risk approach to research and development might not be appropriate in certain sectors of the company.
3. The 25% rule – the proportion for sales of new product might not be achievable in all business divisions.
4. Stiffer competition brings the problems of cost economies being implemented in other for 3M to maintain business profitability.
5. The 5% slack time for new product research is under pleasure to the point where it is being considered as an attitude rather than reality due to the increased stiffness of competition.

2.1 SUMMARY OF MAJOR PROBLEMS

From the identified problems, the main problems faced by 3M is in the case of managerial issues – the effect of expansion on managerial system is clearly a problem because in other for the product to be successful, it must be implemented by capable managerial teams, competition – there is no doubt that competition poses a great threat because they will have to deal with competitions on all divisions of their products, research and development – this is a problem because of the cost associated with each research and development for any new products, and it must be acknowledge that failure of any product will result in subsequent loss of all investments from the company, and finally the expected 25% revenue generation imposed on new products -  is a problem because they is high risk of under achievement as there is no guarantee on any new product entering the market.

3.0 THEORETICAL FRAMEWORK

They have been a particular understanding of neo-liberalism based on the nature and objectives of organizational change that dominates discussions and policies of new organizational management (Dent and Barry, 2004, p. 7; Pollit, 1990). It is a strategic initiative to make organizations and their employees market oriented and more productive (Deem and Brehony, 2005; Deem, 2004; Shattock, 2003; Newton, 2003; Kezar and Eckel, 2002; Spencer-Mathews, 2001; Deem, 2001, pp. 10-3; Vickers and Kouzmin, 2001, pp. 109, 110; McAuley et al., 2000, p. 89).

With various uncertainties associated with organizational management, several pertinent views have emerged. Renwick (2003) revealed that organizational management deals with managing human resources, nevertheless, according to a different research carried out by Thurley and Wirdenius (1973), Child and Partridge (1982) the nature of these roles are varied and unclear. Generally speaking, proper organizational management is essential for the success of any given organization (Eatnshaw et al., 2000). Therefore based on the argument it is proposed that:

P1: 3M will need to incorporate proper organizational management in their expanding divisions in other to ensure success of these divisions.

Organizational need to handle number of factors such as product expansion and technological change, global competition, deregulation, demographic changes, political instability and the trends of service and information age (TRACTORS project, 2007; Sarri and Trihopoulou, 2005). These factors have changed the way organizations carry out their business and increased the need for them to be responsible, and able to tackle global market. This is only achievable through research and development to introduce new products that will make them stay ahead of their competitors. Undertaking this modern business environment, it can be proposed that:

P2: 3M will need to continue with their high and risky investments in research and development of new innovative and creative products in other to continue their quest as the global market leader in product innovation and corporate entrepreneurial building, and stay competitive.

4.0 CRITICAL REVIEW OF THE HIGHLIGHTED PROBLEMS IN THE ARTICLE

4.1 Managerial Difficulties - As 3M becomes larger and more complex with different products and technologies, at different stages of their life cycle they face managerial problems, because different products will require different managerial process to be well implemented.

There is no doubt that firms nowadays see themselves in high level competitive environments where gaining and maintaining competitive advantage is a definite challenge (Avila et al., 2009). Firm must integrate management principles that ensure dynamic capabilities focus to integrate, construct and reconfigure the internal and external competences as to ensure fast response in today's dynamic environments (Teece et al., 1997).

Based on the article in review, the competitive atmosphere is increasing and for 3M to retain their market shares, and react instantly to the changing business environments. It might be viewed that 3M's management teams might not have this capabilities as they are selected based on their contributions to the environment, but it must be argued that since these staffs were previously working with 3M before innovating or inventing new products, they might have acquired certain managerial skills based on the business environment.

From the argument above, it can be recommended that 3M should continue to adapt the procedure of employing their staffs in the management team, as they already gave experience of 3M's working environment. Nevertheless, the company should ensure that the management teams are well trained to enhance their management team in other to be in the best position to compete globally.

4.2 Maverick's high risk approach to research and development- The Company's fourth strategic business thrust was developed following the success of Post-It^® note as developed by Art Frye an in-house staff in 1980s. The main aim of this business thrust is to pursue innovation in all level of the organization through research. This increased encouragement for the Maverick research and development of new research laboratories in 3M.

Talluri and Sarkis (2001), proved research to be an effective benchmarking tool for organizations that seek improve their operations. Critical success factors and transferability has been the core research programs in business quality and management process since the mid-1990s (e.g Harvey, 1995; Al-Mashari et al., 1999). Organizational research is essential for new product development which will keep companies competitive in the market (Hussey and Hussey, 1997, p. 253), therefore, organizations that desire to be competitive in the market must always find innovative ways to enhance their product quality and maintain their market shares (Stewart and Stewart, 1997).

Based on the argument above about research and development, it can clearly be visualized that for companies to remain competitive in the global business, they will need to find innovative ways introducing new products into the market in other to attract new customer, while retaining their current customers and either maintaining or enhancing their market shares.

Therefore, it must be suggested that 3M should not part way with their maverick high risk approach towards research and development as this will ensure that they remain competitive in the market by introducing new products that mesmerizes their competitor's concepts and attracts new customers to their market share.

5.0 OVER EVALUATION OF THE ARTICLE

The overall evaluation of the article can be argued based on two conceptions of presentation and analysis of the contents. From these perspectives, it can be generally seen that the article was presentable and analyzed the issues highlighted significantly. The article was detailed enough and anybody could easily visualize the concepts being discussed about 3M.

Nevertheless, this article as conceived as it could possibly be: lacks in clarification to some certain extents. The concluding section which unveiled the weaknesses of the company was not clear enough as it did not discusses these issues in details compared to the strengths and business strategies. This could be complicated as readers might go with the notion that the company has no weakness.

6.0 CONCLUSION

3M as highlighted in the article is a world renowned leader in promotion entrepreneurship, but it must be understood that all these comes as some certain cost to the company as they are no guarantees to the success of all innovative ideas developed by the company staffs.

The above reviewed article was clear in point out the strengths and business strategies adapted by 3M. These strategies as highlighted above are the key reasons why the company has been successful for decades and continues to play a major role in global entrepreneurship.

3M's success where also illustrated with examples in the article reviews but it must also be understood that they are certain level of weaknesses that pose a threat of great concern to the company but at present and in the unforeseen future. Some of those highlighted are competition and management issues as they continue to diversify their products.

The article reviewed understood these contents to a very great extent and went far as providing relevant solutions to these threats and suggestion ways 3M could continue pushing forwards through their success paths. The concluding paragraphs present an evaluation on the article. This evaluation is with the notion that the article is clear and sound in presentation and analysis but lacks clarifications with the discussion of 3M's weaknesses in the concluding sections of the original article being reviewed.

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