|Huang Mei’En Grace | K0704353 | |T02 | |Cedric Chew Koo Mun | | |
Determine 3M’s core competencies and assess if 3M has a sustainable competitive
advantage. Support your claim.
Critically evaluate the success of 3M’s strategies (acquisition included) in 2006,
from both a strategic and financial perspective.
Recommend an integrated and coordinated set of commitments and actions which
will exploit the company's core competencies (CCs), strengthen its competitive
advantage (CA), and maximise value.
Determine 3M’s core competencies and assess if 3M has a sustainable competitive advantage. Support your claim. [20m]
3M (Minnesota Mining and Manufacturing Company from its founding in 1902 until 2002), established in 1902, is one of the most innovative companies of our time that other visionary companies admire. 3M had initially failed in its mining business, but eventually stumbled into one of the most successful innovations that we know 3M for - Post-its, Scotch tape. They have more than 50,000 products and are best known for their household/office brands. Recent issues faced by 3M is the rise of private labels as well as uncertainties in economic conditions that affect their operations.
The approach used in this is to first identify the resources of 3M, determining the capabilities of 3M on the resources that they possesses. Several resources are bundled to create organisational capabilities. Capabilities are the source of a firm’s core competencies, which are the basis of competitive advantages. Firms with competitive advantage offer values to customers that are superior to the value competitors provide. (Hitt et al, Pg 72)
Lastly, will be to determine the core competencies by running their capabilities through the four criteria of sustainable competitive advantage test – Valuable, Rare, Costly to Imitate and Non-substitutable. Sustainable competitive advantage refers to the prolonged benefit of implementing some unique value-creating strategy based on unique combination of internal organisational resources and capabilities that cannot be replicated by competitors.These distinguish a company competitively and reflect its traits and qualities that are not easy to be imitated by competitors.
Step 1: Determine Resources
There are two types of resources - tangible and intangible, of 3M are listed in the table below.
Step 2: Determining Capabilities
The resources that resulted in the capabilities are listed in the table below.
Step 3: Determine Capabilities that are core competencies using the Four criteria of Sustainable Competitive Advantage. Capabilities that are a source of competitive advantages are known as Core Competencies and if a core competency yields a long-term advantage to the company, it is said to be a sustainable competitive advantage.
|Capabilities |Valuable |Rare |Costly to imitate |Non-substitutable |Competitive |Performance | | |Neutralize threats or exploit |Not possessed by many others. |Not easily developed by...
References: 2. Hitt et al. (2009). The Management of Strategy Concepts and Cases. South Western Eighth Edition.
Please join StudyMode to read the full document