Introduction:

Strategy refers to the set of different plans that are used to achieve goals in a business. The business performance of any company is often influenced to a great extent by the strategies adopted by the company in meeting its objectives. In other words, appropriateness of the strategies and effective implementation of the same is essential for the success of any company. The current study is concerned with examining the key resources held by 3M. The study further analyses the strategy making process of 3M. Understanding the pitfalls of the strategic decision making process is also a key objective of the current piece of work.

The Minnesota Mining Manufacturing (3M) is an American manufacturing company that was formed in 1902. Laminates, adhesives, passive fire protection, abrasives and similar others are the key products offered by the company. The company produces over 55,000 products and that the company operates in more than 65 countries. The products offered by 3M can be purchased through respective retailers or distributors in over 200 countries.

Evaluation of resources of 3M:

The Major Resources Held by 3M are Discussed Below

Human resources:

Human Resource (HR) is one of the valuable assets held by 3M. The company has a large number of polymer chemists from diversified background. The forum created by the organization seeks to pulls such chemists across 3M and to share individual knowledge, views and ideas. As mentioned by Bentley, Omer & Sharp (2013), 3M has adopted a number of measures to bring working minds together. 3M is one of the greatest example of empowering employees to encourage innovation and creativity. In fact, the 15 percent rule developed by 3M to foster innovation and creativity among the employees is a key resource for the company.

Research & Development:

3M is known for its world-class Research & Development (R&D) activities. The company has a wide range of advanced technologies and scientists with rich experience in relevant areas. These help the company in increasing its competitive advantage over the rivals by coming out with unique products & services.

Financial resources:

3M has strong track record in terms of profitability. The liquidity position of the company is also quite strong. Huge capital base along with large amount of reserves can be viewed as other key asset held by the company. Strong assets, both short-term and long-term are major assets of the organization.

Patient money principle:

The patient money principle revolutionized by 3M has been a key driving force of the company’s innovation. The key idea behind the principle is that developing revolutionary products require considerable long-term investment along with repeated failures in many cases prior to a major pay-off. This principle was coined during the early days of the company. In fact, history indicates that it has taken 12 years for the company to actually achieve profit in business (Pradhan & Kundu, 2016). Thus, the focus of the company is on long-term.

3M enjoys a strong brand name in the industry. This is mainly because of years of experience of the company in the industry along with consistent quality of products & services delivered by the company for years. In addition, launch of innovative products also strengthens the brand image of the company. On the other hand, the company operates across 65 countries and products of 3M are available in 200 nations through distributors.

Analysis of Strategy Making Process of 3M

3M follows a resource based strategy to gain competitive advantage over the rivals. Put it differently, 3M is concerned on selecting the strategy that is capable of utilizing its assets or resources at the best possible level. As mentioned by Canato, Ravasi, & Phillips (2013), 3M seeks to pursue strategies that are capable of capitalizing external market opportunities through optimum utilization of its resources. The company appraise rent generating potential of all its resources along with the capabilities in respect of sustainable competitive advantage and appropriateness of the returns. 3M is always concerned with identifying the key areas at which the company can outperform its rivals in the market. Here, complexity associated with each capacity and input of the resources are also considered. As a part of the strategic decision making process, 3M uses models like VRIN analysis and Value chain analysis to determine the strength and weaknesses of each of its resources. Priorities are given on identifying opportunities that best exploits its resources to generate maximum possible return.

However, as mentioned by Keidel (2013), the basic problem of the 3M Company was its inability to exploit reliable and efficient research to the advantage of the company. In other words, the company has been inefficient in utilizing its profitable improvements. On the other hand, 3M was unable to diversify its products in accordance with fast changing market conditions at the global level. Furthermore, 3M was a conglomerate company and managing conglomerate companies are tougher than that of companies focused on a single particular area of business.  Another key limitation of the strategic decision making of the company was its inability to manage exchange rate risk. The business performance had been suffering from the economic contractions of Japan & Asia (Lederer, Schott & Keppler, 2015). The strategic decision making process of the company had also failed in reducing its costs. The company was unable to control its high administrative, selling and general expenses. Weak performance of the company in stock market is also indicated. The strategy making process of 3M was also unable to create an appropriate authority and responsibility allocation in the organization leading to internal conflicts.

Conclusion:

The current study critically examines the resources and strategic decision making process of 3M. The study indicates that human capital, financial resources, brand image and R&D facilities are the major strategic resources of the company. As regard to the strategic decision making, 3M pursues a resource based strategic decision making process to make the most out of its resources. However, inability to create authority & responsibility among managers, weak performance in the stock market, inability to utilize valuable research to the advantage of the company have been the major pitfalls for the company. The company might have avoided its downfall through implementation of Balanced Score Card (BSC) approach.