3M is a company that specializes in manufacturing various products and brands. Creativity and innovation in 3M have made it possible for the company to succeed in the world of business. 3M sells over 50,000 types of products in the market. By the year 1990, the company sales records had hit over 15 billion per year. 30% of the sales were obtained from products that had been created within the previous four to five years (Armstrong and Kotler 533). Therefore, 3M's remarkable success is achieved through its ability to maintain continuous innovation for its products. The essay focuses on examining 3M and its strategies in achieving competitiveness in the market through continuous innovative solutions. The factors that have contributed to 3Ms product success will be discussed, and an analysis of 3M's product development process is customer-centered will be provided. The challenges the 3M faced in managing the product portfolio considering the product life cycle and the limits on how broad 3M's product portfolio can grow will be explained. Furthermore, a discussion on whether it is possible for 3M to maintain steady growth and profitability as well as raise that growth to much higher levels will be essential.
The Factors That Have Contributed To 3M's Product Success
The factors that have contributed to 3M's product success include research and development, continued innovation, and diversification of product line. The company has set a pivotal commitment to researching and developing its products over the years (Armstrong and Kotler 534). Some recognizable products and brands that have been created based on the research include ACE bandages, Post-It notes, Scotch Tape, Nexcare as well as Thinsulate insulation products. As stated earlier, 3M has been making huge sales from the new products that have been created in recent years. That explains the impact of research and development efforts on the product's success for the company. For instance, in the year 2015, 33% of the sales were made from new products launched within the past five years. The company had invested $3 billion on research and development.
3M has continued innovation for its products, and that explains the success. Innovation is an approach to achieving process change and market offerings for successful organizations (Kanagal 2). Marketing strategists use innovation is a primary weapon in winning customers and markets by developing a sustainable competitive advantage. In 3M, Employees are allowed to provide new ideas to improve the company products now and then (Armstrong and Kotler 533). The company is ready to take a risk and try new ideas that are focused on creating new products that improve on the previous products' attributes. The entrepreneurial culture of giving employees the freedom to take risks in innovation supports the company's strategy to create successful products. The 15% rule for employees to think and work on new ideas has worked marvelously for 3M in the generation of new product ideas (Armstrong and Kotler 533). Cross-fertilization of ideas has helped in developing and launching successful products for the company.
Diversification has been a factor that influences the success of 3M products in the market. Once 3M notices a niche product that it can offer to the market, it develops that product as soon as possible to maintain a position in the market. The new product fills a gap in the market, and that makes it able to dominate the competition successfully. The marketing strategy of the company involves diversification by introducing new products and technologies to venture into new markets. Le (91) stated that diversification is a marketing strategy where the business can assess different industry environments and develop business strategies that address the needs of customers in those segments. For instance, in the 1920s, 3M started to diversify after entering the tape market to remain meaningful and close to its customers. In that case, selling the ScotchTM as a range of branded masking tapes to car body finishers was a solution to the two-tone paintwork problem of WetordryTM (Armstrong and Kotler 533). Diversification gives the products a market opportunity for the customers.
3M's Product Development Process is Customer Centered
3M's product development process is customer-centered. 3M is innovative and targets the right set of customers in its creative efforts. The products are monitored and controlled to suit the intended clients. That guarantees the organization the ability to balance between innovation and performance. When 3M realized that the Wetordry sandpaper could not serve the customers properly, the company developed the ScotchTM, a range of branded masking tapes that can be used by various customers with different car body finishing needs (Armstrong and Kotler 534). The company uses megatrends to create insights and fore sights from customers regarding the evolving markets to encourage the innovation of products that meet the client's needs and expectations. The i3 program in the company provides different customer groups to provide their suggestions regarding innovations for products in the company.
The Challenges Faced by 3M in Managing the Product Portfolio Considering the Product Life Cycle
The life cycle of a product determines its technology intensity (Aytun and Kilicaslan, 48). Companies tend to enjoy high profits at the introduction stage of a product and later stages of the cycle. The 3M product life cycle is determined by the ability of the company to maintain its innovative capabilities throughout the years. The company has a comprehensive product portfolio that is updated frequently. It manufactures over 50,000 types of products using various raw materials (Armstrong and Kotler 533). The challenges that 3M faces in managing the product portfolio are the allocation of resources to each product. The routine assessment of the individual products is a big challenge to the employees and resources within each business unit at 3M. Therefore, it requires the company to do away with some of the products as they progress in the product life cycle. In that case, some products reach the decline stage of the product life cycle fast when other new items are created to replace the old ones that do not meet the customer needs and expectations.
Limits on How Broad 3M's Product Portfolio Can Grow
Currently, there are no limitations on how broad the 3M's product portfolio can grow. The company continues to innovate and ensuring continuous focus on expanding the product portfolio (Armstrong and Kotler 533). This has enabled 3M to convert non-consumers to consumers through continuous innovation. The company is still growing ideas now and then from the management, employees, and consumers. The profits are also increasing over time, and that guarantees 3M to take more opportunities for growth in its product portfolio in the future. However, 3M needs to review the performance of its products from time to time before introducing more in the portfolio. The product life cycle plays a huge role in monitoring the performance of the existing products in the market and the need to add others.
3M can Maintain Steady Growth and Profitability and Raise that Growth to Much Higher Levels
3M can maintain steady growth and profitability and raise that growth to much higher levels. The company has all the capabilities of research development, continued innovation, customer, and employee integration to maintain steady growth and profitability. Through manufacturing more and creating new products that meet customer needs, 3M will continue making profits. Armstrong and Kotler (1) stated that creating and capturing customer value is the most effective approach to the marketing strategy for any organization. By using strategies that focus on customer value, 3M will continue to meet customer expectations, grow, and prosper (Krunal, Pooja, and Vandana 186). For instance, a continuation of obtaining employees' and customers' ideas will enhance innovation in the future. 3M focuses on providing more productive solutions to current clients. The research and development efforts in 3M have resulted in the creation of new products and new industries for the company. Thus, promising the capability of the business to maintain stable growth and profitability in the long run as well as raining that growth to higher levels.
Practicing the innovation mindset for 3M has enabled the company to expand its product portfolio, profitability, and the expectation for future growth. 3M's business operations help in understanding the factors that contribute to the new product success, the organization's product development process as customer-centered, and the challenges that the business faces in managing the product portfolio as a result of the product life cycle. Based on the discussion, there are no limits to how broad 3M's product portfolio can grow, and the business can maintain steady growth and profitability as well as increase that growth to much higher levels.
Aytun, Ugur., and Kilicaslan, Yilmaz. "Product Life Cycle and Innovativeness: The Case of MENA." World Journal of Applied Economics, Vol.3, (2017), no.2, pp.48-91. https://doi.org/10.22440/wjae.3.2.3
Armstrong, Gary, and Kotler, Philip. Marketing: An Introduction. 13th edition. Pearson. 2017. ISBN: 9780134132198
Kanagal, Nagasimha. "Innovation and Product Innovation In Marketing Strategy." Journal of Management and Marketing Research, Vol.18, (2015), pp.1-25.
Krunal, Trivedi., Pooja, Trivedi., and Vandana, Goswami. "Sustainable Marketing Strategies: Creating Business Value by Meeting Consumer Expectation."International Journal of Management, Economics and Social Sciences, Vol. 7, (2018), no.2, pp. 186-205. http://hdl.handle.net/10419/180785
Le, Han. "Literature Review on Diversification Strategy, Enterprise Core Competence, and Enterprise Performance." American Journal of Industrial and Business Management, Vol.9, (2019), no.1, pp. 91-108. doi: 10.4236/ajibm.2019.91008
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