Building a Global Business Enterprise — 3M, A Case Study

  • Industrial Business contributes around 37% of the total sales and is the biggest contributor among all its segments. Membrane switch spacers & Foam fabricators are few products to name from this business.
  • Safety and Graphics Business constitutes around 20% of the total sales and they do not sell products. They sell enhancements like reflective sheeting on highway signs or the roofing granules.
  • Electronics and Energy Business: Products from this business include power cables to pressure sensitive resins and this business contributes around 16% of the total global sales.
  • Health Care Business: With 18% contribution to sales, this business has product line ranging from surgical drapes to teeth whiteners. Products also include software products.
  • Consumer Business: The rest of the revenue for 3M comes from consumer items like air conditioner filters, bandages, sponges, shower pads, etc.
  • 1980: 3M’s Scotch Cast Orthopedic Casting Tape — This tape was superior to the then market leader J&J’s plaster-of-paris bandage roll. 3M’s roll tape was light, breathable and comfortable.
  • 1987: International Trade Commission decided in favor of 3M and U.S. Custom officials when a Japanese company began selling Seibulite Ultralite, a copy of 3M’s Scotchlite high-intensity reflective sheeting. The product was a patent issued to a young 3M scientist, Joe McGrath.
  • 1991: When 3M came with the revolutionary Post It notes, AMPAD (American Pad and Paper) also issued its products just like that of 3M. 3M sued AMPAD and won the case.
  • One primary reason as to why 3M is able to go global and survive is the democratic nature of the top leadership. The top leadership always had faith in the people of 3M. They always administered that the operations outside US are not intended to be ‘cookie cutter’ duplicates of 3M’s US Operations. As time progressed and the company started to make impressions over the world, 3M dismantled all Silos. There was flow of people, information, and assistance. It is because of this thought process that 3M was able to establish 31 companies between 1970 and 1997!
  • Pathfinder program of 1978 encouraged new products and businesses outside of the US. This is when 3M started to grow aggressively outside of the US.
  • Another significant reason why 3M is a Global Business is 3M believes that 95% of the population lives outside US. Hence, they are able to see clearer on the bigger landscape and are not short sighted.
  • More Flexibility: Growth in a particular location is not constant and can change over time. Local Sourcing will help to cater the demand.
  • Reduced Supply Chain Costs: Imagine supplying Laminating Adhesives to APAC form US and supplying the same Laminating Adhesives to APAC from Korea. Significant reduction in distance of about 30% or close to 1000 miles. This reduction in distance has cost implications and by having a localized supply chain 3M is able to keep its costs low.
  • But 3M is able to maintain its business all over the world as it has better control of its local supply chain.
  • Apart from control, 3M is in a better position to address any concerns regarding supply chain.

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Barun Bikash Sahoo

Barun Bikash Sahoo

Foodie & Cynophilist

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