Case Study Description of 3M: Negotiating Air Pollution Credits (C)
An epilogue to the (A) and (B) cases, this describes the final steps in implementing the agreement 3M made with Procter and Gamble and with local public officials and interest groups.
Swot Analysis of "3M: Negotiating Air Pollution Credits (C)" 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 (C) case study are - Strategic Management Strategies, 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 (C) casestudy better are - – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of 3M: Negotiating Air Pollution Credits (C)
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 (C) 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 (C) can be done for the following purposes –
1. Strategic planning using facts provided in 3M: Negotiating Air Pollution Credits (C) 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 (C) | 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 (C) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of 3m Credits in the sector have low bargaining power. 3M: Negotiating Air Pollution Credits (C) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 3m Credits to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– 3M: Negotiating Air Pollution Credits (C) 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.
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.
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.
Organizational Resilience of 3m Credits
– The covid-19 pandemic has put organizational resilience at the centre of everthing that 3m Credits does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– 3m Credits is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For 3m Credits digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. 3m Credits has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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 (C) 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 (C) 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.
High brand equity
– 3m Credits has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 3m Credits to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Successful track record of launching new products
– 3m Credits has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. 3m Credits has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses 3M: Negotiating Air Pollution Credits (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 3M: Negotiating Air Pollution Credits (C) are -
Skills based hiring
– The stress on hiring functional specialists at 3m Credits has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study 3M: Negotiating Air Pollution Credits (C), it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Low market penetration in new markets
– Outside its home market of 3m Credits, firm in the HBR case study 3M: Negotiating Air Pollution Credits (C) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 (C), 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study 3M: Negotiating Air Pollution Credits (C), in the dynamic environment 3m Credits has struggled to respond to the nimble upstart competition. 3m Credits has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, 3m Credits has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 3M: Negotiating Air Pollution Credits (C) 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 (C) 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.
Interest costs
– Compare to the competition, 3m Credits has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities 3M: Negotiating Air Pollution Credits (C) | 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 (C) are -
Learning at scale
– Online learning technologies has now opened space for 3m Credits to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, 3m Credits can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. 3m Credits can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. 3m Credits can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 (C) 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.
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 (C) 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for 3m Credits in the consumer business. Now 3m Credits can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 3m Credits is facing challenges because of the dominance of functional experts in the organization. 3M: Negotiating Air Pollution Credits (C) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
Threats 3M: Negotiating Air Pollution Credits (C) 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 (C) are -
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– 3m Credits can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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 (C), 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 .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, 3m Credits can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study 3M: Negotiating Air Pollution Credits (C) .
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.
Consumer confidence and its impact on 3m Credits demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– 3m Credits needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. 3m Credits can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of 3M: Negotiating Air Pollution Credits (C) 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 (C) 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 (C) 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 (C) 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 (C) 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.