Imagine, if one company would provide us with all sorts of products, wouldn’t our life be much easier? Well, I have good news for you.
There is a company that provides more than 60,000 products related to different industries. This one company provides all the products for daily use—for example, hardware products, electrical products, medical products, cleaning products, etc.
Do you know which company provides all of these products? I’ll tell you. 3M is one of the most renowned brands that provide diverse products all across the globe.
Since 3M is one of the very few brands that offer such a diverse nature of products, let’s conduct a 3M SWOT Analysis to find out more about this brand. However, before we proceed further and carry out the SWOT analysis, let’s look at 3M’s history and current operations.
Looking at the operations and stores based on the latest technology, it isn’t easy to estimate when the company would have been established. However, looking at the company’s history, we get to know that its roots are traced back to 1902.
Initially, a mining and manufacturing company named Minnesota Mining and Manufacturing Company was established by a few people. The company was initially considered a failure since it failed to mine Corundum which is necessary to make good quality sandpapers.
Instead, anorthosite was used to make sandpaper, due to which sales were down initially. The company moved to Duluth a few years later to establish its sandpaper factory. The company introduced its first product, which was an abrasive cloth.
In the 1920s, 3M worked on innovation and developed the first water-resistant sandpaper. Along with it, it also developed a masking tape. From there onwards, the company kept working on R&D. It developed several products over the years, such as Scotch Cellophane Tape, reflective materials, traffic signs, etc.
In the 1940s, the company diversified its operations and produced defense material for world war II. After that, in 1946, the company was listed on the New York stock exchange. The company then changed its direction and started producing products for the entertainment industry, such as sound recording tapes.
Over the years, 3M produced several products related to different industries such as sports, healthcare, hardware, entertainment, textile, and power. Besides ιncreasing the number of products, 3M also paid attention to increasing its geographical presence globally.
Currently, 3M has established several plants in 37 countries, whereas it has sales in more than 200 countries. Such globally spread operations help the company to generate a high turnover from all over the world.
In 2021, 3M generated $35.35 billion in revenue, due to which the company was listed in the fortune 500 list as it was considered one of the biggest corporations in the U.S. in terms of revenue.
Since we have discussed the history and the current situation of 3M, let’s move ahead and carry out 3M’s SWOT analysis. However, before we proceed further, you need to understand what SWOT analysis is.
SWOT Analysis is a tool businesses use to analyze the internal and external factors that affect a company’s operations. A SWOT template highlights the strengths, weaknesses, opportunities, and threats an organization faces.
Now that we have also shed light on the SWOT analysis let’s proceed further and conduct 3 M’s SWOT analysis.
Any company that competes in the market possesses some strengths which provide it a competitive edge. Therefore, companies with more strengths than weaknesses tend to be more successful.
This is the first section of the SWOT analysis. In this section, we will highlight the strengths that 3M possesses.
Any company needs to have diversified products since they help cater to more customers’ needs than usual. As a result, they help the company in generating more revenue.
3M constantly grows and diversifies to deliver innovative solutions across various industries. This has helped the company to develop and maintain a highly stable financial structure, which enables 3M to plan more accurately, making business decisions without being overly affected by external factors.
Believes In Innovation
Every company that wants to maximize its profits and succeed in the long run should innovate because it is nearly impossible to last in the modern market without innovation.
3M has a strong reputation in product innovation and heavily invests in research and development. 3M has been innovating for almost a century. That’s how it has managed to produce more than 60,000 products. In 2021, 3M spent $1.9 billion on R&D.
3M’s focus on technology allows it to continue to make new developments in many areas, including technologies like electronics and medical products.
Strong Global Presence
Companies often look for opportunities to expand their operations internationally because international presence increases the company’s customer base, which further helps the company increase its revenue.
Similarly, as 3M grew domestically, it decided to explore international markets. Currently, 3M sells products in more than 200 countries across the globe. Whereas it has installed its manufacturing plants in more than 37 countries.
Such global and geographical presence helps the company generate huge sums of revenue which makes the company financially strong.
No matter how many strengths a company possesses, it will always have some weaknesses. Weaknesses are something that holds back a company from achieving its goals. Weaknesses are the internal factors that affect the performance of a company. So let’s have a look at what weaknesses 3M possesses.
A large Number of Employees
Companies often look forward to expanding their operations. However, to do that, a company must increase its workforce.
3M is a renowned brand that has operations worldwide. To ensure that these operations are carried out smoothly globally, 3M has employed more than 95,000 employees. However, employing so many people will create a burden on the company as it will increase the operating costs of the company.
Moreover, managing such a large workforce will require great expertise and resources.
Diversity of Operations
You must think if diversity is a strength, why have we listed it as a weakness? Well, let me tell you. First, having diversified products is good for the company as it helps it increase its customer base.
On the contrary, having a diverse product line increases the competition for the company since now the company has to compete in different industries. Similarly, 3M offers very diverse products. For example, it offers hardware products along with healthcare products.
Due to this, 3M has to compete in both industries. As a result, the company has to use more resources to compete in both industries. This will increase the expenditure of the company and lower its profits.
Lack of Focus
Companies need to focus on one industry first to succeed in the long run. However, unlike other companies, 3M offers a wide range of products that are not specific to any industry.
Due to the nature of operations, 3M’s focus and resources are divided into products belonging to different industries. Hence, it is said that 3M lacks focus as 3M doesn’t target a specific industry while making products.
Every company is given opportunities to become one of the most significant players in the market. However, only a few companies actually seize such opportunities. In this section of the SWOT analysis, we will highlight some of the opportunities for 3M.
Mergers and Acquisitions
The prime objective of any company is to expand and maximize its profit. Therefore, many companies look forward to mergers and acquisitions to penetrate the market to achieve this objective.
Similarly, 3M has expanded its global operations in many ways, such as through good marketing techniques, diversified products, and mergers and acquisitions.
3M has acquired many brands, like Softmed System, Meguiar’s, Archon Technologies, and Scott Safety. The acquisition of new companies helped the brand to expand its market share. In the future, 3M can acquire more pre-established brands to increase its market share and customer base.
Establish Manufacturing Plants In Other Countries As Well
Businesses move out and establish manufacturing plants in different countries to minimize operating costs. Companies move to less developed countries, where labor is cheap, to maximize profit by lowering operational costs.
3M has established manufacturing plants in 37 countries. However, many opportunities are still present where 3M can invest to maximize profits. For example, 3M can establish manufacturing plants in developing countries like Pakistan and Bangladesh, where cheap labor and raw materials can be found.
Expansion In Automotive Industry
If you look at the history of 3M, it has moved from one industry to the other. Over the years, 3M has produced products related to different industries such as medical, hardware, electronics, and whatnot. However, 3M never came near the automotive industry.
Looking at the increased demand in the automotive industry after the pandemic, it is a great opportunity for 3M to enter the automotive industry. This can help 3M increase its customer base, resulting in higher revenues.
Threats are the external factors that affect the operations of an organization adversely. Every organization faces threats from its environment. However, these threats must be identified timely.
In this last section of the SWOT analysis, we will look at some of the threats faced by 3M.
Every company faces threats from its competitors. Looking at the nature of operations of 3M, the level of competition faced by 3M can be assumed.
3M faces a high level of competition due to its diverse operations. Since 3M produces products that belong to different industries, 3M has to compete with companies from many industries.
One of the major competitors of 3M is General Electric since it offers some products that are similar to 3M. Therefore, 3M has to innovate to compete in such a competitive market constantly.
Recessions are always painful for businesses because one of the significant side effects of a recession is that it lowers people’s standard of living. After the pandemic and the Russia-Ukraine war, economists have predicted that soon the world will experience a recession.
The threat of recession is causing worry for 3M since if a recession occurs, the sales of the products of 3M will decrease, and the company will experience a loss in revenue.
After the conflict between Russia and Ukraine, many multinational companies have suspended their operations in Russia. 3M is one of those companies that used to generate a significant share of its revenue from Russia. However, 3M suspended its operations in Russia after the war between Russia and Ukraine.
This ban has made 3M suffer financially. If the war between the two countries doesn’t stop, 3M will continue to suffer financially. This can be threatening for the company since it will cause a reduction in its revenue.
In this article, we started by shedding light on the history of 3M, one of the world’s most renowned companies offering a diverse product range. After we learned how the brand was established, we looked at how it evolved over the years.
After that, we discussed the current revenue of the company and its international presence. After that, we proceeded further and carried out the SWOT analysis of 3M. The SWOT Matrix of 3M highlighted the strengths, weaknesses, opportunities, and threats faced by 3M.
After reading this article, you’ll get to know what internal and external factors affect the operations of 3M. Besides that, this article will also make you aware of how to conduct a SWOT analysis.
Although this article must have taught you a lot about SWOT analysis, look at some examples of SWOT analysis if you still want to learn more.