Founded in 1902, the Minnesota Mining & Manufacturing Corporation (3M) when five businessmen agreed to mine a mineral deposit for grinding-wheel abrasives. Early technical and marketing innovations began to produce successes and, in 1916, the company paid its first dividend of 6 cents a share. Early innovations include:
The world's first waterproof sandpaper, which reduced airborne dusts during automotive manufacturing, was developed in the early 1920s.
Richard G. Drew, a young lab assistant, invented masking tape in 1925 - the first step toward diversification and the first of many Scotch tapes.
In the 1950s, 3M introduced the Thermo-Fax copying process, Scotchguard Fabric Protector, videotape, and Scotch-Brite® Cleaning Pads (3M India). 3M has identified 21 established and new strategic brands. Some of its best-known brands are Scotch tapes, Scotch-Brite cleaning products, and Post-it notes. Newer brands include Thinsulate products, Filtrete air cleaning filters and Nexcare first-aid products. 3M has institutionalized a corporate culture that promotes intrapreneurship. Early in 3M's history, chair and CEO William L. McKnight, long considered to be the company's "spiritual founder," introduced policies and philosophies that were considered to be responsible for 3M's ability to innovate consistently seed capital, 15 percent option, dual-ladder career path, etc. Current management has continued to embrace and expand these policies and philosophies, believing innovation to be the cornerstone of 3M's future success. SWOT ANALYSIS
Strengths Progressive/forward thinking is one of 3M's largest strengths. Mr. McKnight's forethought into hiring a scientist to develop their original Wetordry sandpaper was years ahead of its time. Allowing employees to use fifteen percent of their "on clock" time to develop/experiment with their own innovations not only shows trust in employees but values their ideas and fosters a healthy working environment. From Richard Drew, so determined to develop masking tape that he used his own time and subsequently found his own market, to the twelve years it took to bring Post-It notes to market, perseverance has always been important to 3M. Diversity can be seen at every turn in 3M's history. They currently produce more than 5 hundred products in over 7 different market categories (i.e. Health Care, Electronics, Home and Leisure, etc.).
Weaknesses 3M appears to be overly diversified. When you look at the safety products they participate in, 3M sells products in every subcategory from file protection to window safety. When you have too many irons in the fire at once it is difficult to be the best at any one thing. Take a look at the vast wasted opportunity with Xerox. Management seems focused on the development of new, blockbuster products that improving and protecting the old innovations is sacrificed. New weaknesses would include succession planning. It was surprising that 3M choose to go outside the company in 2001 when McNerney was hired. It is concerning that 3M didn't have a qualified, outstanding candidate within the company ready to move into the role of CEO. Cash flow (seed money) is another weakness of 3M's. Innovation, research and development all take time and money. However, when scientists on every continent are vying for start-up capital, projects that are potential best-sellers are bound to be overlooked.
Opportunities 3M has over 15,000 products in the pipeline at any given time and advancement of those products will require a research staff that is dedicated, responsive and not over taxed. Centralizing 3M's Research and Development capabilities was a start, but the dramatic reduction in scientistand with 24 percent of them located outside the United Statesthe stage is set for possible failure as they push to continue diversity and product originality. Increasing inventory turns would be a great opportunity for 3M...
References: 3M India, (2004, 3M), http://www.3m.com/in/html/3mhistory.htm. Retrieved on March 19, 2007
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