Case Study Description of 3M: Negotiating Air Pollution Credits (A)
A proposed trade of air pollution emission credits between 3M (now Imation) and Procter and Gamble is described. Though such trading is encouraged under federal environmental laws, 3M had adopted a company-wide policy against such deals. Procter and Gamble needs the credits and is an important 3M customer. Local citizens and public officials are sharply divided on the proposed deal.
Swot Analysis of "3M: Negotiating Air Pollution Credits (A)" written by Michael A. Wheeler, Thomas D. Dretler includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that 3m Credits facing as an external strategic factors. Some of the topics covered in 3M: Negotiating Air Pollution Credits (A) case study are - Strategic Management Strategies, Ethics, Negotiations, Operations management, Policy, Risk management, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the 3M: Negotiating Air Pollution Credits (A) casestudy better are - – increasing government debt because of Covid-19 spendings, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of 3M: Negotiating Air Pollution Credits (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 3M: Negotiating Air Pollution Credits (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 3m Credits, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 3m Credits operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of 3M: Negotiating Air Pollution Credits (A) can be done for the following purposes –
1. Strategic planning using facts provided in 3M: Negotiating Air Pollution Credits (A) case study
2. Improving business portfolio management of 3m Credits
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of 3m Credits
Strengths 3M: Negotiating Air Pollution Credits (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 3m Credits in 3M: Negotiating Air Pollution Credits (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the 3M: Negotiating Air Pollution Credits (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- 3m Credits is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at 3m Credits is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in 3M: Negotiating Air Pollution Credits (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– 3m Credits has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in 3M: Negotiating Air Pollution Credits (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Strategy & Execution field
– 3m Credits is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled 3m Credits in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the 3m Credits are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– 3m Credits is one of the leading recruiters in the industry. Managers in the 3M: Negotiating Air Pollution Credits (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– 3m Credits is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Michael A. Wheeler, Thomas D. Dretler can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of 3m Credits in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– 3m Credits has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in 3M: Negotiating Air Pollution Credits (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– 3m Credits is present in almost all the verticals within the industry. This has provided firm in 3M: Negotiating Air Pollution Credits (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Strategy & Execution industry
– 3M: Negotiating Air Pollution Credits (A) firm has clearly differentiated products in the market place. This has enabled 3m Credits to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped 3m Credits to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– 3m Credits has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study 3M: Negotiating Air Pollution Credits (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses 3M: Negotiating Air Pollution Credits (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 3M: Negotiating Air Pollution Credits (A) are -
Lack of clear differentiation of 3m Credits products
– To increase the profitability and margins on the products, 3m Credits needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, 3m Credits has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. 3m Credits even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study 3M: Negotiating Air Pollution Credits (A), is just above the industry average. 3m Credits needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study 3M: Negotiating Air Pollution Credits (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case 3M: Negotiating Air Pollution Credits (A) can leverage the sales team experience to cultivate customer relationships as 3m Credits is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 3M: Negotiating Air Pollution Credits (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though 3m Credits has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study 3M: Negotiating Air Pollution Credits (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract 3m Credits 's lucrative customers.
Low market penetration in new markets
– Outside its home market of 3m Credits, firm in the HBR case study 3M: Negotiating Air Pollution Credits (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael A. Wheeler, Thomas D. Dretler suggests that, 3m Credits is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of 3m Credits is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. 3m Credits needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help 3m Credits to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of 3m Credits supply chain. Even after few cautionary changes mentioned in the HBR case study - 3M: Negotiating Air Pollution Credits (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left 3m Credits vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, 3m Credits needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities 3M: Negotiating Air Pollution Credits (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study 3M: Negotiating Air Pollution Credits (A) are -
Loyalty marketing
– 3m Credits has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 3m Credits can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, 3M: Negotiating Air Pollution Credits (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 3m Credits in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects 3m Credits can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. 3m Credits can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, 3m Credits can use these opportunities to build new business models that can help the communities that 3m Credits operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– 3m Credits can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of 3m Credits has opened avenues for new revenue streams for the organization in the industry. This can help 3m Credits to build a more holistic ecosystem as suggested in the 3M: Negotiating Air Pollution Credits (A) case study. 3m Credits can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– 3m Credits can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. 3m Credits can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– 3m Credits can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. 3M: Negotiating Air Pollution Credits (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at 3m Credits can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help 3m Credits to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats 3M: Negotiating Air Pollution Credits (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 3M: Negotiating Air Pollution Credits (A) are -
Technology acceleration in Forth Industrial Revolution
– 3m Credits has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, 3m Credits needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 3m Credits in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– 3m Credits high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study 3M: Negotiating Air Pollution Credits (A), 3m Credits may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of 3m Credits
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of 3m Credits.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. 3m Credits can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that 3m Credits is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of 3m Credits.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for 3m Credits in the Strategy & Execution sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– 3m Credits needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. 3m Credits needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of 3m Credits business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of 3M: Negotiating Air Pollution Credits (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study 3M: Negotiating Air Pollution Credits (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study 3M: Negotiating Air Pollution Credits (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study 3M: Negotiating Air Pollution Credits (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of 3M: Negotiating Air Pollution Credits (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that 3m Credits needs to make to build a sustainable competitive advantage.