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What is innovation ??? Innovation is the process through which economic and social value is extracted from knowledge through the generation, development, and implementation of ideas to produce new

Слайд 1Understanding Strategy in Innovation and technology oriented business
Team members -
MUPPANI

PRUDHVI 2011C6PS665H
SAKSHI KHANDELWAL 2012A1PS428H
VALLEM VEENASRI 2012A1PS840H
SURE SAI ABHISHEK 2012A3PS242h
DURGA RAO GUNDU 2012A3PS255H

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 2What is innovation ???


Innovation is the process through which economic and

social value is extracted from knowledge through the generation, development, and implementation of ideas to produce new or improved strategies, capabilities, products, services, or processes.

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 3Key topics of focus
Developing and implementing innovation and technology strategies
Increasing

organizations' capacity for innovation
Organizing innovation , research and development (R&D) effectively and efficiently using lean processes
Identifying, evaluating and exploiting new technologies
Setting up supporting technology and innovation networks
Intellectual property: IP for innovation
IT support for R&D, technology and innovation management

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 43M is a diversified technology company serving customers and communities with

innovative products and services. Each of their businesses are committed to make customers lives easier and better.

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 5Mission Statement

“To solve unsolved innovatively”


The mission statement clearly states that the

company is not just making and selling innovative products, but it is solving the customer needs in the most innovative way. It is this mission statement of 3M which helps in bringing the strategic objectives and specific target performance

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 6Vision Statement


3M Technology Advancing Every Company
3M Products Enhancing Every Home
3M Innovation

Improving Every Life

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 7Values
Act with uncompromising honesty and integrity in everything we do.
Satisfy our

customers with innovative technology and superior quality, value and service.
Provide our investors an attractive return through sustainable, global growth.
Respect our social and physical environment around the world.
Value and develop our employee’s diverse talents, initiative and leadership.
Earn the admiration of all those associated with 3M worldwide.

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 8Segmentation
ESSENTIALS OF STRATEGIC MANAGEMENT
Health Care
Industrial and Transportation
Display and Graphics
Consumer and

Office
Electro and Communications
Safety, Security, and Protection services

Слайд 9Target Group
Customers using industrial packaging
Industrial users of polymer and

adhesives
Users of interior designing components
Pharmaceuticals
orthodontic practitioners
users of stationeries and homecare products
computers and TV manufacturers; enterprise, military, aerospace markets

Positioning
Creativity and process Innovation in various fields

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 10SWOT ANALYSIS Strengths
Strong research and development capability with over 80,000

employees worldwide
Diversified business with over 55000 products in its portfolio
It has operations in over 65 countries and commands a strong brand name
Robust cash position and financially improving performance over the years
Its product reach through retailers and distributors is in nearly 200 countries
CSR activities for environmental benefits

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 11 Weakness
Environmental issues and litigations have sometime affected the image
Being a market

leader, any mistake hurts the brand image world over
Lot of data or virtual warehousing of data is not being well integrated.

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 12Opportunity
Acquisitions to strengthen existing businesses
More global presence through tie-ups and diversification

in businesses can lead to more growth

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 13Threats
Unfriendly environmental regulations and strict government policies can affect position
Intense competition

can lead to loss of market share
Risks associated with conducting business outside the US

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 14Sales of 3M
ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 15Porter’s Five forces Model
ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 16Business Description
MAIN INDUSTRY
New Technology Development
6 SUB INDUSTRIES:
Health Care
Industrial and Transportation
Display and

Graphics
Consumer and Office
Electro and Communications
Safety, Security, and Protection services

ESSENTIALS OF STRATEGIC MANAGEMENT

Слайд 17Threat of New Entrants
Main Industry

LOW
As the Capital investment is very high most of the new entrants can’t afford such large amounts.

Sub Industries HIGH
As these industries are segmented industries other industries which are focused as well as well equipped firms will have a significant probability of entering the market which makes the intensity at high level for example a retailer may sell the product at relatively low price than 3M




ESSENTIALS OF STRATEGIC MANAGEMENT



Слайд 18Power of Buyers
Main Industry

LOW


Sub Industries LOW

As 3M produces innovative products the customers are ready to pay premium prices which makes the power of buyers low in both industrial cases.

ESSENTIALS OF STRATEGIC MANAGEMENT



Слайд 19Power of Suppliers

Main Industry

LOW
As 3M provides a huge investment on R&D and also has a large possibility of buying raw materials from various suppliers the power of the suppliers here is low

Sub Industries LOW
As these industries are segmented industries it has various inlets from the suppliers which makes the power of suppliers here low

ESSENTIALS OF STRATEGIC MANAGEMENT



Слайд 20Threat of Substitutes
Main Industry

LOW
Competition based on new product development
As 3M has the best innovation and provides expenses in R&D and there are few who do that at large scale the threat is low
Sub Industries HIGH
Competition based on Commercialization
As sub industries are segmented industries the local level retailers have a edge over the 3M as they can provide more focused products that satisfy customer needs so the threat of substitutes is high at the low level.

ESSENTIALS OF STRATEGIC MANAGEMENT



Слайд 21Intensity of Rivalry
Main Industry

LOW

Sub Industries MODERATE
Competitors
Honeywell
General Electric
DuPont
Johnson & Johnson

ESSENTIALS OF STRATEGIC MANAGEMENT



Слайд 22Open Innovation at 3M
ESSENTIALS OF STRATEGIC MANAGEMENT
Idea Generation
Selection
Execution
Commercialization

Current Market

Organisation
Ideas and
innovations
from

inside the
organisation


patents and
innovations
from outside the
organisation


Select
Successful
Ideas

Prototypes
and
Production

IP
Licensing
IN

IP
Licensing
OUT

Product
brought
to market

Technology
Spin-offs

Develop
New ideas

Technology
Licensing
IN


New Markets

Слайд 23Internal Analysis – Resource Based View
3M’s core competency and capabilities are

due to its valuable tangible and intangible resources
3M has an excellent intangible resources which lead the company to scale greater height today
3M has a wonderful organizational culture which develops the innovative skills of an employee as well as entrepreneurship capabilities
The effective functional strategies help the firm to create best and innovative products
As there is a saying” innovation is distinguished from invention by the fact that innovation is usually applied successfully in practice.”

Слайд 24Intangible Resources of 3M
HUMAN CAPITAL
Professional Development
New skills and Knowledge
Commitment
Collaborativeness
ORGANIZATIONAL CAPITAL
Business Philosophy

- ” Never kill a new idea, even if it looks like a foolish one”
Decision making and working style
Institutionalized knowledge

Слайд 25Intangible Resources of 3M
RELATIONAL CAPITAL
Company – Stakeholders Relationship & Trust
SYMBOLIC CAPITAL
Reliability
Trustworthiness
Image

and reputation

Слайд 26Capabilities and Products

Слайд 27Core-Competency



We can consider that 3M’s entrepreneurial culture is its core competency,

since 3M has been consistently heralded within both the scholarly and practitioner communities as a model for entrepreneurial development.

Слайд 28Firms with entrepreneurial cultures out-perform their competitors which has five dimensions:


Autonomy – Employees are encouraged to make a business case to their proposal and compete for their share of organizational resources. 3M’s is often viewed in the academic literature as a good example of how autonomous employees can add value to a company.
Innovativeness – Management embraces the development of new products.
Proactiveness – Research and Development is a driving value within the organization
Competitive aggressiveness – The company is willing and sometimes eager to engage the competition.
Risk taking – There is a systematic internal process in place to delineate ideas from opportunities

Слайд 293M’s Approach
ENTREPRENEURIAL APPROACH
15 Percent Option

30 Percent Rule
Seed Capital



Tolerance for Failure
Rewards for Success
R&D Spending

DESCRIPTION

Certain employee encouraged to spend up to 15% of their work week initiating and developing projects of their choice.
30% of business unit revenue should come from products introduced within the last four years
Revenue provided for promising ideas

Failed projects will not negatively affect an employee’s job
Employees and departments receive financial rewards if their products reach sales goals.
3M spends 6-7% of sales on R&D investments


Слайд 30Value chain analysis
Of 3M

Слайд 31Value chain analysis

Слайд 32Strategic decisions in the value chain

Слайд 34Open Innovation at 3M
Idea Generation
Selection
Execution
Commercialization

Current Market

Organisation
Ideas and
innovations
from inside the
organisation

patents

and
innovations
from outside the
organisation


Select
Successful
Ideas

Prototypes
and
Production

IP
Licensing
IN

IP
Licensing
OUT

Product
brought
to market

Technology
Spin-offs

Develop
New ideas

Technology
Licensing
IN


New Markets

Слайд 35PRODUCTS & SERVICES Our inspiration comes from listening to customers and creating

new products and solutions for the challenges and opportunities you face.

Displays & Graphics We’re a world leader in films that brighten the displays on electronic products, such as flat-panel computer monitors, cellular phones, PDAs, and LCD televisions.

Manufacturing & Industry Our innovative products and services help manufacturers improve their businesses. With a global network, we meet needs of both multinational and local customers.


Слайд 36Electronics, Electrical & Communications 3M is a leading supplier of innovative solutions

to the electrical, electronics, and telecommunications industries.

Office We continue to rejuvenate products for the office. An example of this is the Post-it® brand -- notes, flags, easel pads … today more than 1,000 Post-it® products are sold in more than 100 countries.

Safety, Security, and Protection We produce products that increase the safety, security, and productivity of workers, facilities, and systems around the world.


Слайд 37Health Care 3M Health Care is committed to providing the health care

community with innovative solutions, based on 3M's diversified technologies, that help improve the quality of life.

Transportation Industry We provide high-quality abrasives, tapes, films, adhesives, and specialty materials for the manufacture, repair, and maintenance of autos, aircraft, boats, and other vehicles.

Home & Leisure Some of the world’s best-known consumer brands, Scotch®, Post-it®, Scotch-Brite®, and Scotchgard™, are household names. 3M people find ways to make life better and easier.

Слайд 38Operation
From that factory, the work-in-process was shipped 600 more miles

to Minneapolis, where a contractor applied the 3M logo and the WIP was sliced into the right sizes. From there, another 200 mile trip to a contractor that added the hooks and did the final packaging. 1300 miles of supply chain travel in total for a product that just sells for a few bucks

Слайд 39Linkages
Also in developing products, researchers collaborate with Sales and Marketing

to identify customer needs and then often to work with customers in the development process

Слайд 40Shop3M.com

Слайд 41usefulness of the features provided
 convenience of the features on this site
number of

clicks to get where you want on this site
how quickly pages load on this site
If you heard about this website from a social network, please specify the site (i.e. Facebook, Twitter)
Which best describes your role in visiting this site today?

Слайд 42Business level strategies

Слайд 43Market Segmentation
Market Segments
Transportation
Display and Graphics
Health Care
Office
Govt.
Safety and security
Electrical
Manufacturing and industry
Work and

leisure

Слайд 44Cost leadership strategy
Another common business level strategy that the 3M Company

is using is relative cost leadership not an absolute one.
It could be asked as a controversial question why 3M has no absolute cost leadership with this big size and global presence.
The answer is because the Company has a diversified business in at least six different areas and to be a cost leader in all of those markets is a big deal therefore, 3M has relatively low cost in any of the businesses .

Слайд 45Differentiation Strategy
Being the top most innovators in the world.. They follow

some of the innovative strategies :

Rule of 15% : “At 3M we live by our wits”. Rule in R&D , to
spend 15% of lab time in research of your
choice. Increases innovation speed.
25/5 rule : financial strategic decision. 25% of the company
profits should come from products that are 5 years
old.


Слайд 4630/4 rule : 25/5 rule revised. Now 30% of the profits

should
come from products 4 years old. Done to increase
innovation at faster speed.

7 percent rule : from every 1 dollar sales, 7% will be spent on
R&D . Which gives 28% more sales due to
large spending on R&D.

Слайд 47Awards and Recognitions
The work of outstanding technical employees is recognised by

the 3M Carlton Society, this is voted on by peers.
Employees that create products which sell $4 million or more are awarded the prestigious Golden Step Award
Employees have a choice to work on a management or laboratory career ladder, no employee is forced to take a management role if they don’t wish it

Слайд 48Focused Differentiation
America
Europe
Middle East & Africa
Asia & pacific

Слайд 49Strategic Groups
3M being the leader in almost every industry, has some

of the major competitors :


Слайд 50Mature Industry

3M is definitely in the Mature phase of industry

life cycle. It launches products in various areas every year and also simultaneously remove the unwanted products in the market.

Innovative Products : able to persuade consumers to pay for benefits. The ability to do so usually depends on the products they sell.
Brand loyalty : they have been working and giving innovative products back to back . Which has imbibed them as brand in minds of costumers.
Using IT and Internet : shop3M. com


Fragmented Industry turned to consolidated

Слайд 51Deter entry to rivals
Product proliferation : being in almost every sector

of the world like automation, electronics, healthcare, finance etc. It has filled all the niches available to it by launching diverse products in every area.

Maintain Excess capacity : To survive in industry, they need to produce in bulk. So they produce their products in bulk so as to prevent rivals to get a place in the industry.

Слайд 52Non- Price Strategies
Product Development: involves creation of new products to existing

markets. For eg: taking adhesives in manufacturing industry it started with masking tapes, spray adhesives, sealants and many other products.



Market Development : as an example focusing on adhesives in manufacturing industry, they diversified their products to sticky notes, glues which could be used by students and general public

Слайд 53Corporate Level Strategies


Corporate level strategy concerns how a diversified company intends

to establish business position in different industries and the actions and approaches employed to improve the performance of the group of businesses of the company

Слайд 54Decisions at Corporate level

Слайд 55Cross Business Fit of 3M
 
3M was Initially only into abrasive and tape business.
Slowly they

started to make products from altogether different sector but the only common thing was all products needed innovation.
The common thing innovation acted as the fit for their business. Thus, 3M kept on increasing products into their product portfolio which required innovation.
To do this effectively they converted 3M into a diversified organization with 6 different divisions.

Слайд 56Size of diversification


3M didn’t diversify their business beyond certain limits. When

they found that there were products which were not profitable, were not taken for research in their lab center. Thus they limited their diversification into 6 major business classes.

Слайд 57Unrelated Diversification of 3M
The businesses in which 3M diversified were not

related to each other in many ways but were common in certain aspects , i.e. all products made were made based on the needs of customers which were unmet and meeting those needs required innovation.
3M has 6 major  businesses which are not related to each other.
They have different departments to take care of each unit.
The 6 businesses are further divided into more than 35 units which take care of different brands and product lines.

Слайд 58Geographic expansion


3M has vast a geographical expansion.
It operates in more

than 65 countries having 80,000 employees worldwide and 6,700researchers contributing to the R&D of the company with their innovations.

Слайд 59Strengthen Position in Existing Business By 3M
3M strengthens its existing businesses by

continuous innovation under the same product line which either adds some new feature to the product or changing the product to an extent that it meets some other specific need.
This decision is taken care of at the business level but the corporate policy is clear that there has been strengthening of the existing business.

Слайд 60Positioning in New Industry
In 3M the decision of acquisition to enter

a new industry is taken care at the business level and not at the corporate level.
This is because of the reason that 3M believes that no one can understand their business better than the division itself. And thus they know what acquisition they should go for.
The decision is strictly taken on the basis of whether 3M already owns the technology that the company they are going to acquire has. If the answer is no, they will go for the acquisition or else no

Слайд 61Diversification in weak and unattractive business
This decision, at 3M, is again

taken at the division level. If the technology in certain business is out dated and is of no use to 3M they will divest in that business and go for a new one. This strategy helps them to think only about the new things to bring in and not to ponder over a business not looking good in future

Слайд 62Global Level Strategies
Of 3M

Слайд 63Localization
Localization is The Key Strategy To Penetrate And Grow In International

Markets
3M enters new international markets by exporting its products to that market.
it focuses on localization of the supply chain by using locally sourced raw materials, to manufacture products in local plants and selling through local distribution channels.
Identifying and developing products to cater to local requirements has also helped 3M increase its presence in global markets.

Слайд 64Efficiency By 3M
Consolidated Supply Chains Help Increase Efficiency And Bring Down

Costs
3M has deployed 'Supply Chain Centers of Excellence' globally to help consolidate and manage its supply chain with a regional focus rather than country by country.
promote better management of manufacturing & engineering activities and the distribution channels in a more effective way.
As a result, there are improvements in working capital requirements, overhead costs and tax rates.
Switzerland, Singapore and Panama that cater to EMEA, Asia-Pacific and the Americas respectively.
These centers have integrated  and dedicated Enterprise Resource Planning solutions like SAP to maximize productivity and efficiency within the region.

Слайд 653M in developing and developed Markets
3M's Wide Range Enables It To

Establish Presence In Developing And Developed Markets
3M has a wide range of products that can cater to every phase of a markets' economic growth.
Developing countries are more focused on infrastructural growth and manufacturing operations, whereas developed countries purchase more consumer and healthcare goods.
In 2012, developing markets contributed 39% to revenues in 3M's Industrial, Safety & Graphics, and Electronics & Energy Businesses, and 20% in the Consumer and Healthcare Businesses.

Слайд 66The bottom line Statement of 3M
“ Research is the transformation
of

money into knowledge. “
“Innovation is the transformation
of knowledge into money.“

Слайд 67THANK YOU ☺

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