Question

Course is Strategic Management

The firm is 3M.

1. Does your selected business have differentiated products or services? If so, what is the basis for this differentiation from the competition?

2. Does your firm have a cost-leadership position in this business? If so, can you identify which cost drivers it uses effectively to hold this position?

3. What is your firm’s approach to the market? If it segments the market, identify the scope of competition it is using.

4. Using the answers to the preceding questions, identify which generic business strategies your firm is employing. Is the firm leveraging the appropriate value and cost drivers for the business strategy you identified? Explain why or why not.

5. What suggestions do you have to improve the firm’s business strategy and strategic position?

Answer 1

1.)The most important method used by 3M to differentiate its product and service is their innovation strategy. 3M focusses on providing the customers with advanced and innovative products which no competitor can match. 3M invests around 7% of its revenue in research and development to foster innovation and to increase the efficiency of the product. AN innovation strategy is a form of specialized differentiation strategy. This strategy has enabled 3M to provide customers with better value and this has resulted in customers preferring 3M over other manufacturers.

2).3M enjoys cost leadership in its business.3M uses a relative cost leadership technique.3M through its continuous research and development tries to increase the efficiency of their processes thereby decreasing the overall cost to the company. By using innovative methods 3M has proved to decrease the cost and thereby providing customers quality products at a much cheaper price than which it may actually cost. This, in turn, makes competition with 3M a very difficult process for its competitors as they cannot match with the value of 3M products. This enables 3M to enjoy a Monopolistic position.

3)3m aims at providing the customers with the most innovative and valued products and services.3M is a very customer and market-oriented organization which aims to continuously cater to the changing customers and markets with innovation and value.3M with its diversified business focuses to cater to a wide area of customers. It tries to provide solutions to a larger market than focussing only on certain groups of customers. That is why 3M has products and solutions for every customer needs and problems. 3M tries to appeal to a wider area of customers through its cost leadership and diverse products and solutions.

4)Some of the strategies used by 3M are:

• localization.i.e obtaining, manufacturing, distributing products locally by catering to the needs of the locality
• Innovation
• Diversification and expansion of product portfolio and businesses into new markets
• innovation of processes and improving the efficiency of the workforce.