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 - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
challanges to central banks by blockchain based private currencies, there is backlash against globalization, 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 -
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.
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.
Ability to lead change in Technology & Operations field
– 3m's User 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's User in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Highly skilled collaborators
– 3m's User 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 Innovation at 3M Corp. (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– 3m's User has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Innovation at 3M Corp. (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.
Learning organization
- 3m's User 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's User is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Innovation at 3M Corp. (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of 3m's User
– The covid-19 pandemic has put organizational resilience at the centre of everthing that 3m's User 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'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.
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 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.
Low bargaining power of suppliers
– Suppliers of 3m's User in the sector have low bargaining power. Innovation at 3M Corp. (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 3m's User to manage not only supply disruptions but also source products at highly competitive prices.
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 -
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's User supply chain. Even after few cautionary changes mentioned in the HBR case study - Innovation at 3M Corp. (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's User vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, 3m's User is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Innovation at 3M Corp. (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, 3m's User 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.
Workers concerns about automation
– As automation is fast increasing in the segment, 3m's User 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Stefan Thomke, Ashok Nimgade suggests that, 3m's User 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.
Interest costs
– Compare to the competition, 3m's User 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 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 -
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.
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.
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.
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's User 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, 3m's User 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 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.
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.
Better consumer reach
– The expansion of the 5G network will help 3m's User to increase its market reach. 3m's User will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 3m's User is facing challenges because of the dominance of functional experts in the organization. Innovation at 3M Corp. (A) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 3m's User 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, Innovation at 3M Corp. (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.
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 -
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.
High dependence on third party suppliers
– 3m's User 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.
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.
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.
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.
Stagnating economy with rate increase
– 3m's User 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.
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's User.
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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. 3m's User can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents 3m's User with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.