Case Study Description of Innovation at 3M Corp. (A)
Describes how 3M Corp. introduces and learns a new and innovative methodology called Lead User research to understand future customer and market needs. A team from 3M's Medical-Surgical Markets Division applies the Lead User methodology to the field of surgical infection control and discovers not only new product concepts but also a very promising new business strategy. Focuses on: (1) 3M's approach to the management of innovation and understanding market needs, (2) an in-depth description of the Lead User method and its potential as applied to the medical business, and (3) the managerial challenges of introducing novel methods into a successful organization.
Swot Analysis of "Innovation at 3M Corp. (A)" written by Stefan Thomke, Ashok Nimgade includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that 3m's User facing as an external strategic factors. Some of the topics covered in Innovation at 3M Corp. (A) case study are - Strategic Management Strategies, Change management, Collaboration, Competition, Market research, Product development, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the Innovation at 3M Corp. (A) casestudy better are - – increasing commodity prices, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Innovation at 3M Corp. (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Innovation at 3M Corp. (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 3m's User, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 3m's User 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 Innovation at 3M Corp. (A) can be done for the following purposes –
1. Strategic planning using facts provided in Innovation at 3M Corp. (A) case study
2. Improving business portfolio management of 3m's User
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of 3m's User
Strengths Innovation at 3M Corp. (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 3m's User in Innovation at 3M Corp. (A) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of 3m's User in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the 3m's User 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.
Strong track record of project management
– 3m's User 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 Technology & Operations segment
- digital transformation varies from industry to industry. For 3m's User digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. 3m's User 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.
Effective Research and Development (R&D)
– 3m's User 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 Innovation at 3M Corp. (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.
Operational resilience
– The operational resilience strategy in the Innovation at 3M Corp. (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.
Diverse revenue streams
– 3m's User is present in almost all the verticals within the industry. This has provided firm in Innovation at 3M Corp. (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.
Ability to recruit top talent
– 3m's User is one of the leading recruiters in the industry. Managers in the Innovation at 3M Corp. (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.
Sustainable margins compare to other players in Technology & Operations industry
– Innovation at 3M Corp. (A) firm has clearly differentiated products in the market place. This has enabled 3m's User to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped 3m's User to invest into research and development (R&D) and innovation.
High brand equity
– 3m's User has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 3m's User to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– 3m's User has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. 3m's User 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.
High switching costs
– The high switching costs that 3m's User has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Innovation at 3M Corp. (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovation at 3M Corp. (A) are -
Slow to strategic competitive environment developments
– As Innovation at 3M Corp. (A) HBR case study mentions - 3m's User takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Innovation at 3M Corp. (A), it seems that the employees of 3m's User don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of 3m's User, firm in the HBR case study Innovation at 3M Corp. (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Innovation at 3M Corp. (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 Innovation at 3M Corp. (A) can leverage the sales team experience to cultivate customer relationships as 3m's User 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 Innovation at 3M Corp. (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's User has relatively successful track record of launching new products.
High cash cycle compare to competitors
3m's User has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Innovation at 3M Corp. (A), it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Lack of clear differentiation of 3m's User products
– To increase the profitability and margins on the products, 3m's User needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at 3m's User 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.
Increasing silos among functional specialists
– The organizational structure of 3m's User is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. 3m's User needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help 3m's User to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– 3m's User has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Innovation at 3M Corp. (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 Innovation at 3M Corp. (A) are -
Using analytics as competitive advantage
– 3m's User has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Innovation at 3M Corp. (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help 3m's User to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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's User can use these opportunities to build new business models that can help the communities that 3m's User operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– 3m's User can develop new processes and procedures in Technology & Operations 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.
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's User in the consumer business. Now 3m's User can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– 3m's User can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 3m's User to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for 3m's User to hire the very best people irrespective of their geographical location.
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's User can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects 3m's User can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– 3m's User 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.
Buying journey improvements
– 3m's User can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Innovation at 3M Corp. (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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. 3m's User 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's User 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 3m's User in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Manufacturing automation
– 3m's User can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Threats Innovation at 3M Corp. (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Innovation at 3M Corp. (A) are -
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's User in the Technology & Operations sector and impact the bottomline of the organization.
Consumer confidence and its impact on 3m's User 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.
Technology acceleration in Forth Industrial Revolution
– 3m's User has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, 3m's User needs to keep up with the evolution of technology in the Technology & Operations 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.
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.
Shortening product life cycle
– it is one of the major threat that 3m's User is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. 3m's User will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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's User business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 3m's User in the Technology & Operations industry. The Technology & Operations 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, 3m's User 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 Innovation at 3M Corp. (A) .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Innovation at 3M Corp. (A), 3m's User may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
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's User needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Environmental challenges
– 3m's User 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's User can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of Innovation at 3M Corp. (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 Innovation at 3M Corp. (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 Innovation at 3M Corp. (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 Innovation at 3M Corp. (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 Innovation at 3M Corp. (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's User needs to make to build a sustainable competitive advantage.
