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Core Competency & Competitive Advantage Case Study

Case Title:

3M: Cultivating Core Competency

Publication Year : 2007

Authors: Mridu Verma

Industry: Retailing


Case Code: CCA0047P

Teaching Note: Not Available

Structured Assignment: Not Available

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In 2006, the $ 21.2 billion 3M is the epitome of high-technology/low-technology business with over 50,000 products ranging from Post-it Notes and Scotch tape to transdermal patches of nitroglycerin and optical films. 3M owes its formidable strength to its unusual corporate culture, which has comfortably fostered innovation and interdepartmental cooperation, backed by a massive research and development budget

When George Buckley (Buckley) joins as the CEO of 3M in December 2005, the company is facing criticism from analysts and investors over anemic revenue growth that has slowed to between 1 and 5 % through parts of 2004 and 2005, even while the broader markets have been expanding. Buckley realises that he needs to generate growth, maintain premium margins and strategically manage the company’s portfolio – all without driving out 3M’s culture of innovation on which both the company’s fame and its long history of success rests. He plans to develop a growth strategy which is based on and enhances 3M’s core competency.

Buckley realises that there is a need to demystify 3M and understand the workings of the ‘3M Lattice’. 3M’s technology portfolio and process capability are at the core of its unique business model. These technology platforms are the threads that weave together the company’s diverse businesses. According to Buckley, 3M’s fundamental core competency lies in applying coatings to backings. To grow its core business, the company intends to build on 3M’s strengths through constant reinvention, even stronger key customer partnerships, customisation, solving customers needs, entering niche segments and capturing new segments.Buckley intends to build scale increase market share, emphasize localisation and build long term competency. The idea is to defend created markets against new entrants, using dual branding in the upper middle market; emphasize product localisation using a mixture of brands and local acquisitions; thoughtfully extend private labeling and accurate capacity planning. He has identified core product categories for building scale

Pedagogical Objectives:

  • To examine the working of 3M, a company with diversified business presence
  • To study how the company used its technological prowess to enhance business opportunities
  • To learn from the company’s growth strategy how it generated growth, maintained margins and managed the product portfolio

Keywords : 3M; innovation; core competancy; inter-segmnet technology sharing; intellectual property; 3M Lttice; technology sharing; Core Competency & Competitive Advantage Case Study; Scotch brand tape; extending technology; post it notes; market architecture; competitive platform; Scotch Brite; 3M Scotchshield; six Sigma

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